Why in news?
The Department of Financial Services (DFS) convened a colloquium to discuss reforms for India’s Debt Recovery Tribunals. Officials emphasised digital transformation, capacity building and prioritisation of high‑value cases to speed up recovery of stressed assets.
Background
Debt Recovery Tribunals were set up under the Recovery of Debts and Bankruptcy Act to expedite recovery of dues owed to banks and financial institutions. Many DRTs face a backlog of cases, delaying resolution.
- Digital initiatives: mandatory e‑filing, hybrid hearings (virtual and physical), and the new e‑DRT 2.0 case‑management system will allow electronic submission of pleadings, virtual hearings and real‑time tracking.
- Prioritisation: the colloquium directed tribunals to focus on high‑value cases and non‑performing assets (NPAs), replicating best practices across jurisdictions.
- Alternative dispute resolution: promotion of Lok Adalats and settlement camps to resolve small and uncontested cases quickly. Tribunals were asked to collaborate with National Legal Services Authority and use online dispute resolution platforms.
- Training and capacity building: training programmes will be held for presiding officers and staff. Improved infrastructure, recruitment of more tribunal members and adoption of technology are expected to reduce pendency.
These reforms aim to make DRTs more efficient and transparent, which will, in turn, improve recovery rates for banks and reduce the burden of bad loans on the financial system.
Prelims MCQ Practice
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Debt Recovery Tribunals were established primarily to:
With reference to the reforms proposed for Debt Recovery Tribunals, consider the following statements:
Which of the statements given above is/are correct?
A non-performing asset, whose recovery DRTs are meant to accelerate, refers to: