Banks want special recovery tribunals for high-value debts – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/money-and-banking/banks-want-special-recovery-tribunals-for-high-value-debts/article65657565.ece

Over 1.6 lakh cases pending at debt recovery tribunals as at February 2022

Banks have petitioned the Finance Ministry to set up special debt recovery tribunals (DRTs) and debt recovery appellate tribunals (DRATs) for speedy adjudication and recovery in high-value cases (₹100 crore and above).

The request comes in the backdrop of a high pendency of cases in existing tribunals — 39 DRTs and five DRATs — countrywide.

As at February-end 2022, there were 1,61,034 pending cases at the DRTs, with DRT 2 Chandigarh having the most (10,578 cases), followed by DRT 3 Chandigarh (8,885) and DRT 3 Kolkata (7,171), as per Minister of State for Finance Bhagwat Karad’s reply to a question in the Lok Sabha.

There is high pendency even after the Central Government had in 2018 doubled the pecuniary limit to ₹20 lakh for debt recovery applications at DRTs.

Prioritising high-value cases

“The existing tribunal benches cannot be entirely faulted for the pendency as they are almost full with cases. A ₹20-lakh case and a ₹100-crore case for adjudication and recovery of debts are treated the same way.

“High-value cases need to be taken up on priority basis. Hence, the Government needs to increase the number of special benches,” said a senior public sector bank official.

He also underscored that case adjournments should not be prolonged for more than 10 days.

The Recovery of Debts Due To Banks And Financial Institutions Act, 1993, under which the tribunals are established, specifies dealing with an application as expeditiously as possible and making every effort to complete the proceedings in two hearings, and dispose of the application within 180 days from receipt.

Recovery from high-value cases will reduce instances of non-performing assets (NPAs), improve bottomlines and reduce the quantum of funds lenders need to raise from the market to support growth.

In the first nine months of FY22, DRTs collectively disposed of 4,830 cases and recovered ₹11,956.98 crore, as per data shared in the Lok Sabha.

Published on July 19, 2022

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