Finance Ministry urges banks, DRTs to speed up debt recovery
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The finance ministry has called on banks, debt recovery tribunals and other stakeholders to work together to reduce the backlog of pending cases and create a more effective recovery ecosystem, to help free up capital stuck in litigation.This capital could be redeployed "for productive use in the economy," the ministry said in a statement on Saturday.The appeal was made during a colloquium held earlier in the day with chairpersons of Debt Recovery Appellate Tribunals (DRATs), presiding officers of debt recovery tribunals (DRTs), and representatives of various public and private sector banks as well as the Indian Banks' Association.Among the key issues deliberated were prioritisation of high-value cases, use of alternate dispute resolution mechanisms such as Lok Adalats, and further reforms to reduce turnaround time for various processes in DRT proceedings, the statement said.It was also pointed out that robust monitoring and oversight mechanisms by banks are key for increasing recovery through DRTs.The ministry also highlighted key initiatives taken by the Department of Financial Services such as the adoption of revised DRT regulations, mandatory e-filing, hearing through video conferencing, and hybrid hearings for reducing turnaround time of the matters adjudicated by the tribunals.
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