Developers who fail to pay back loans controlled by NAMA will be pursued, the Irish Finance Minister has said.

Brian Lenihan recently published the draft legislation for the establishment of the National Asset Management Agency (NAMA).

It new law gives NAMA powers to valuate land holdings and development loans owned by banks, and purchase them at a reduced rate.

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The value to be set will take a longer-term view of the property market and the agency is expected to take control of up to €90bn of property loans, both good and bad.

The draft legislation was welcomed by Chambers Ireland, which called for a speedy debate on the issue.

According to the Irish Banking Federation, NAMA will play a crucial in bolstering stability within the domestic banking system.

Last week the Construction Industry Federation said it would enter into full consultation with its members over the draft text.

Debtors will still owe the full amount of their loans, but Mr Lenihan said NAMA will take a firmer stance against those who are failing to repay.

(PR/BMcC)