The Finance Ministry has urged banks to have clearly defined policy on small and high value cases that are pending in Debt Recovery Tribunals (DRTs).
Such an approach would help optimise the recovery for the banks. In formulating a settlement policy, banks will have to factor in the transaction costs while pursuing pending recovery cases, the Finance Ministry has suggested.
These decisions came at a Conference of Chairpersons of Debt Recovery Appellate Tribunals (DRATs) and Presiding Officers of Debt Recovery of Tribunals (DRTs) in the capital on Saturday.
The conference was chaired by Department of Financial Services ( DFS) Secretary M Nagaraju.
It was also decided that DRT Regulations 2024, which have number of improved features over the earlier DRT Regulation 2015, would be adopted by all DRTs. This would make the DRT process more effective and less time consuming.
At the conference, issues related to DRTs including reducing pendency, adoption of best practices, optimising recovery, formulation of settlement policy, and adoption of new DRT Regulations 2024 were discussed.
Banks have agreed to put in place effective monitoring and oversight mechanism for efficient management of pending cases in DRTs.
Some of the best practices followed in DRTs were also discussed, noting that these could be adopted across such Tribunals DRTs for better outcome.
The meeting was attended by senior officers from the public and private sectors banks, Deputy Chief Executive Officer (CEO), Indian Bank Association (IBA) and senior officers from the Ministry of Finance.
All stakeholders have committed to collaborate in reducing case pendency and implementing effective recovery measures, aimed at unlocking capital tied up in pending cases and redirecting it for productive use in the economy.