On May 24, 2025, the Department of Financial Services (DFS), Ministry of Finance, organized a significant colloquium for Chairpersons of Debt Recovery Appellate Tribunals (DRATs) and Presiding Officers of Debt Recovery Tribunals (DRTs) at Vigyan Bhavan, New Delhi. Graced by Justice S.V.N. Bhatti, a Supreme Court Judge, the event focused on enhancing the efficiency of DRTs through key reforms.
Role of Debt Recovery Tribunals
Facilitating Financial Recovery
Debt Recovery Tribunals (DRTs) were established under the Recovery of Debts and Bankruptcy Act, 1993, to expedite the resolution of non-performing assets (NPAs) and facilitate the recovery of dues for banks and financial institutions. With 39 DRTs and 5 DRATs across India, these tribunals play a crucial role in unlocking capital trapped in pending cases, enabling its redeployment for economic growth.
Key Reforms Highlighted
Modernizing DRT Operations
The Secretary of DFS outlined several initiatives to streamline DRT processes, including:
- DRT Regulations, 2024: Revised regulations to enhance procedural efficiency.
- Mandatory E-filing: Digitization to reduce paperwork and expedite case filing.
- Video-Conferencing and Hybrid Hearings: Enabling faster adjudication through technology-driven solutions.
These reforms aim to reduce the turnaround time for case disposal, ensuring quicker recovery of funds.
| Reform | Objective |
|---|---|
| DRT Regulations, 2024 | Enhance procedural efficiency |
| Mandatory E-filing | Streamline case filing through digitization |
| Hybrid Hearings | Reduce adjudication time using technology |
Key Discussions at the Colloquium
Strategies for Efficiency
The colloquium featured discussions on critical areas to boost DRT performance, including:
- Effective Implementation: Ensuring adherence to the DRT Regulations, 2024 for streamlined operations.
- Monitoring Mechanisms: Strengthening oversight by banks to maximize recovery through DRTs.
- Prioritizing High-Value Cases: Focusing on cases with significant financial stakes for optimal recovery.
- Alternate Dispute Resolution: Promoting Lok Adalats for faster case disposal.
- Training Programs: Enhancing skills of Presiding Officers and DRT officials.
Stakeholder Collaboration
Building a Recovery Ecosystem
Attended by senior DFS officers, representatives from public and private sector banks, and the Indian Banks’ Association, the colloquium emphasized collaborative efforts. Stakeholders were urged to create a robust recovery ecosystem to reduce the pendency of over 1.5 lakh cases in DRTs, freeing up capital for productive economic use.
Economic Implications
Unlocking Capital for Growth
The reforms discussed aim to address the ₹10.2 lakh crore in NPAs reported by scheduled commercial banks as of March 2024. By reducing case pendency, DRTs can facilitate the redeployment of locked capital into sectors like infrastructure, manufacturing, and MSMEs, driving India’s economic progress toward Viksit Bharat@2047.
Key Highlights
- Event Date: Held on May 24, 2025, at Vigyan Bhavan, New Delhi.
- Purpose: Enhance efficiency of Debt Recovery Tribunals through reforms like DRT Regulations, 2024 and e-filing.
- Focus Areas: Prioritizing high-value cases, using Lok Adalats, and training DRT officials.
- Economic Impact: Aims to reduce 1.5 lakh pending cases to unlock capital for economic growth.
- Exam Relevance: Crucial for understanding financial governance, debt recovery, and economic reforms.