A meeting led by M. Nagaraju, Secretary of the Department of Financial Services (DFS), assembled Chairpersons of Debt Recovery Appellate Tribunals (DRATs) and Presiding Officers of Debt Recovery Tribunals (DRTs) in New Delhi last Saturday.

To improve the effectiveness of debt recovery procedures, M. Nagaraju, Secretary of the Department of Financial Services, organised a meeting that focused on the operational obstacles encountered by debt recovery tribunals.

The gathering, attended by senior officials from public and private sector banks and representatives from the Indian Bank Association (IBA) and the Ministry of Finance, concentrated on tackling key challenges and enhancing the efficiency of debt recovery procedures.

During the discussions, several important resolutions were reached. One primary recommendation was for banks to establish strong monitoring and oversight mechanisms to handle the backlog of pending cases in DRTs efficiently.

It was stressed that adopting best practices already in place within various DRTs could result in significantly improved outcomes.

Furthermore, banks were encouraged to establish clearly defined policies regarding small and high-value cases awaiting resolution in DRTs. This would aid in optimising recovery efforts and streamlining processes, ensuring that financial resources are effectively utilised.

The significance of considering transaction costs when formulating settlement policies was also highlighted to strike a balance between cost-effectiveness and recovery success.

The stakeholders committed to reducing case pendency and implementing effective measures to enable the capital tied up in unresolved cases to be reintegrated into the economy for productive use.

Finally, the strong advocacy for adopting the DRT Regulations 2024, which offers enhanced features compared to the previous DRT Regulation 2015, was made to make the entire process more efficient and less time-consuming.

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