Monetary limit for filing cases in DRT doubled to Rs 20 lakh
The move is aimed at helping reduce pendency of cases in DRTs. There are 39 DRTs in the country.
New Delhi: The government on Thursday doubled the pecuniary limit to Rs 20 lakh for filing loan recovery application in the Debt Recovery Tribunals (DRT) by banks and financial institutions.
The move is aimed at helping reduce pendency of cases in DRTs. There are 39 DRTs in the country.
The Central government has raised "the pecuniary limit from Rs 10 lakh to Rs 20 lakh for filing application for recovery of debts in the Debts Recovery Tribunals by such banks and financial institutions," said a Finance Ministry notification.
As a result, any bank or financial institution or a consortium of banks or financial institutions cannot approach DRTs if the amount due is less than Rs 20 lakh.
As per RBI data on global operations (with provisional data as on March 2018), aggregate amount of Rs 3,98,671 crore was written-off by banks over the last four financial years. Over the same period, their NPAs reduced by Rs 2,57,980 crore due to recoveries.
Banks and financial institutions' recovery of dues takes place on ongoing basis through legal mechanisms, which inter-alia includes Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, Recovery of Debts to Banks and Financial Institution (DRT) Act and Lok Adalats.
The borrowers of such loans continue to be liable for repayment even when the loans have been removed from the balance sheet of the bank(s) concerned.
To make the tribunals more effective and to facilitate fast disposal of debt recovery cases, the government has made several amendments in different laws, including the SARFAESI Act.