The Finance Ministry has directed banks to establish robust monitoring and oversight mechanisms for managing pending cases in a bid to improve the efficiency of Debt Recovery Tribunals (DRTs).
Financial Services Secretary M Nagaraju chaired a meeting with chairpersons of Debt Recovery Appellate Tribunals (DRATs) and presiding officers of DRTs, where the discussion centered on adopting best practices across these tribunals to enhance overall outcomes.
The meeting emphasised the necessity for banks to clearly define their policies regarding small and high-value cases pending in DRTs. By optimising recovery efforts, stakeholders are urged to work collaboratively to reduce case backlogs. The ministry highlighted that expediting the recovery of capital stuck in these pending cases is crucial for reinvesting in the economy, thus promoting productive use of resources.
Additionally, banks were encouraged to consider transaction costs when developing their settlement policies for outstanding recovery cases. The introduction of the DRT Regulations 2024, which incorporate several improvements over the previous 2015 regulations, was also discussed. These updated regulations aim to streamline processes and make the DRT experience more efficient and less time-consuming.
