The sixth amendment to the Public Finance Act has been ratified.

President Ibrahim Mohamed Solih ratified the amendment to the act (Act No. 3/2006) on Monday upon which it has been publicized in the government gazette.

The bill, which was passed by the People’s Majlis on November 29, at the 44th sitting of the third session of 2021, came into effect on Monday.

Modifications to the guidelines for granting government funding for loans with authorization only have been brought to the act under the amendment, which further highlights the principles and procedures that councils are required to follow when acquiring loans, selling assets and funding grants to associations.

Further, the new amendment gives the authority for councils to lend their money in the event they make a profit on pre-agreed terms and conditions to other councils after they deduct the cost of operation from the income they receive, under Section 82 of the Decentralization Act.

With this, the government has the power to pay money to the lending council from the receiving council’s budget should they fail to repay the debt to the lending council.

Further, the amendment clarifies the principles of lending as well as the mechanism for reporting pertinent loan information to the ministry.

The bill introduces important changes to the Public Finance Act and requires the appropriate regulations and procedures to be established in the government gazette after six months once it comes into effect.