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The Department of Financial Services (DFS) has raised the bar to lodge cases against defaulting borrowers in debt recovery tribunal (DRT) from Rs 10 lakh to Rs 20 lakh to "de-clutter DRTs" even as it prepares to put DRTs on electronic mode.
"As of June 30, 2018 there were 38,376 cases outstanding in DRT’s between Rs 10 lakh and Rs 20 lakh which account for 38 percent of pending outstanding amounts… (Thus), the pecuniary limit for filing of cases against defaulting borrowers in DRTs has been raised from Rs 10 lakh to Rs 20 lakh," a statement released by the Finance Ministry said.
According to government estimates, over 38,000 cases account for only 4 percent of non-performing assets (NPAs) in terms of value. Of these, around 80-85 percent of cases are "fully secured".
"District magistrates are required to pass the orders on secured asset seizure within 60 days by banks for their disposal," said Rajiv Kumar, secretary, DFS.
He added that states have been asked to "monitor passing of order" so that lending banks and financial institutions may get "physical possession of secured property of defaulting borrowers" under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
According to government estimates, about 10,000 cases, worth close to Rs 40,000 crore, are pending from public sector banks.
e-DRTs from October 1
The secretary further said that all (private and public) banks have been advised to adopt e-auctioning of properties to have time-bound sale of properties.
"Details of properties worth auctioning across banks have been standardised and a common landing platform is on the anvil," he added.
"Robust databases and effective use of data analytics will enable PSBs to increase transparency and expand the customer base to attract competitive bids and increase recovery from property sale," the statement read.
E-DRTs will have features similar to e-court software including e-filing, e-payment of fees, uploading of orders, viewing case status and cause list generation.
"Records of 39 DRTs and five debt recovery appellate tribunal (DRATs) have been computerised and e-DRTs will be launched across all DRTs from October 1, 2018," Kumar said. "This will help in easy identification of cases through uniquely generated code."
The final version of the database of all the cases will be available to all the banks, financial institutions, tribunals and asset reconstruction companies (ARCs). e-DRTs will be functional from year end.
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