Finance Ministry seeks to make debt recovery tribunals more accountable

NEW DELHI: The finance ministry is looking to make debt recovery tribunals more accountable in an attempt to fast-track cases pertaining to loan recovery. Officials said the government could set up a panel headed by a Supreme Court judge to evaluate the performance of individual DRTs and hold them accountable for delays.

"We are looking at various mechanisms to strengthen the DRTs, including a more robust e-auction process," said a finance ministry official, who did not wish to be identified.

The official said the ministry has already decided to set up six new DRTs and implement the e-DRT project within the next two-three months. The e-DRT project will allow banks and financial institutions to efficiently manage case records, track cases online and access accurate reports.

At the end of 2014, there were about 59,000 cases pending before various DRTs involving assets worth Rs 3.7 lakh crore, according to finance ministry data.

Although a DRT is required to adjudicate on a case within 180 days, some cases have been pending for more than a decade. At present there are 33 DRTs in the country. The presiding officer of a DRT is selected by a committee headed by a Supreme Court judge. Any person who is qualified to be a district judge or has been in that position is eligible to be a presiding officer in DRT.

The committee also has financial services secretary, law secretary and a deputy governor from the Reserve Bank of India as its members. "The idea is to set up a framework under which the presiding officers of these DRTs will have to explain the inordinate delays to a relevant authority. If the cases are pending because of lack of requisite paperwork from banks, then we will push the banks to take corrective action," the official said.

A senior banker, however, said that the government needs to appoint executives who can be held accountable by the finance ministry rather than advocates. "The courts are already burdened with other cases. These are commercial transactions which can be handled by the executive," said the banker, requesting not to be named. According to finance ministry data, DRTs dispose of 11,000 cases worth Rs 21,000 crore every year on average.

Cases have been piling up with DRTs as banks have been reeling under bad loans. The gross non-performing assets or NPAs of state-run banks increased to 5.2 per cent of their advances at the end of March 2015 from 4.72 per cent a year ago, according to the Reserve Bank of India.