Banks asked to track movable assets to aid loan recoveries

New Delhi: The government is working with banks on a framework to share details of movable assets linked to defaulting borrowers when debt tribunals issue attachment orders, a move aimed at improving recoveries from stressed loans.

Banks have been directed to put in place stronger monitoring and oversight mechanisms for the efficient management of cases pending before Debt Recovery Tribunals (DRTs), a government official said. "These steps will fast-track pending recovery cases," the official said.

At present, banks approach recovery officers of debt tribunals to identify attachable movable assets of defaulting borrowers. The officers then send attachment orders to the respective lenders.


"This is time-consuming and there is no single window to access details of movable assets linked to defaulting borrowers," a senior bank executive said. The proposed framework seeks to address this through a centralised record, the executive added.

Another bank official said lenders are also examining an internal mechanism to share information, depending on the case.

"The idea is to have a collective strategy for expeditious disposal of cases and bring greater transparency to the system," the official said.

Earlier this year, finance minister Nirmala Sitharaman said four Special Lok Adalats had been planned for 2026 to dispose of pending cases before DRTs and Debt Recovery Appellate Tribunals (DRATs). Nearly 71% of pending cases involve claims of Rs 100 crore or more.

Last month, the government held a colloquium of chairpersons of DRATs and presiding officers of DRTs, with discussions focused on reducing pendency and accelerating case disposal.

According to a finance ministry statement, there was renewed emphasis on capacity building and infrastructure strengthening through targeted training programmes. Tribunals were also urged to adopt best practices followed by high-performing DRTs.

The government has also asked lenders to prioritise high-value cases to improve recovery outcomes and make greater use of Lok Adalats as an alternative dispute resolution mechanism.