Debt Recovery Tribunals


Debt Recovery Tribunals were established to facilitate the debt recovery involving banks and other financial institutions with their customers. DRTs were set up after the passing of Recovery of Debts due to Banks and Financial Institutions Act (RDBBFI), 1993. Appeals against orders passed by DRTs lie before Debt Recovery Appellate Tribunal (DRAT). DRTs can take cases from banks for disputed loans above Rs 10 Lakhs. At present, there are 33 DRTs and 5 DRATs functioning at various parts of the country. In 2014, the government has created six new DRTs to speed up loan related dispute settlement.

Compared to the standard court procedures, DRTs were ready to handle sizable amount of cases with low delay throughout the initial phases. tho' the DRTs have created impact on recovery front, many problems associated with their performance within the background of rising volume of NPAs have appeared in later amount. Inadequate infrastructure in addition to short range of DRTs has created them incompetent to handle the rising volume of disputes

Recent issues related with DRTs

  • Delay in subsidence the cases is long.
  • The DRTs weren't ready to handle cases associated with massive borrowers.
  • Timely appointment of officers for DRT has not been created.

Recent efforts to rejuvenate DRTs

To correct the situation, government has made several efforts. Major one is the amendment to the RDBBFI Act 1993 in 2016. Similarly, the new Insolvency and Bankruptcy Code give powers to DRTs to consider cases of Bankruptcy from individuals and unlimited liability partnerships.The main changes made to the RDBBFI Act in 2016 though the amendments are yet to be enforced. The amendment gives timelines for various steps in the adjudication process before the debt recovery tribunals. Time limit for filing of written statements, passing of orders, appeals, etc. have been reduced. The Act Empowers the Central Government to provide for uniform procedural rules for the proceedings in the Debt Recovery Tribunals.

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