The Kerala Assembly recently passed the Kerala Single Dwelling Place Protection Bill, 2025, a landmark legislation designed to shield families from losing their sole mortgaged homes due to loan defaults. Industries Minister P. Rajeeve, addressing the discussions in the Chief Minister’s absence, highlighted that this new state law offers crucial protection, contrasting it with a recent central government decision to amend the Disaster Management (DM) Act, which had limited loan waivers for those affected by major calamities such as the Wayanad landslides.
Minister Rajeeve emphasized the significance of this new legislation, calling it one of the most vital in the Assembly’s history. He spoke of the severe distress faced by impoverished families who were forcibly evicted from their only homes due to an inability to repay loans, a situation exacerbated by the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act. This earlier central law, enacted in 2002, often applied the same stringent measures to all borrowers with loans exceeding ₹1 lakh, regardless of their circumstances. Successive central administrations, he noted, had also not taken steps to amend these aspects of the Act.
Despite repeated, unanimous requests from the Kerala Assembly for the central government to amend certain clauses of existing financial laws, these pleas went unanswered. In response, the new Kerala Single Dwelling Place Protection Bill offers a solution: individuals with a loan amount not exceeding ₹5 lakh are eligible for protection, with the state government assuming responsibility for their liability. The total sum for repayment, encompassing the original loan, interest, penalties, and other associated costs, is capped at a maximum of ₹10 lakh.
To qualify for this protection, the debtor and their family must not possess any other properties or alternative means of repayment, aside from the mortgaged dwelling. The Act mandates the establishment of dedicated Dwelling Place Protection Committees at both state and district levels. Those seeking assistance under this law will need to submit an application, along with supporting documentation, to their respective district committee. This committee will then conduct an initial investigation and facilitate conciliation efforts to help resolve repayment obligations in a fair and agreeable manner.