‘Looking to computerise DRTs and reducing number of oral hearings to just two’
The government is planning to overhaul the existing debt recovery tribunal (DRT) structure for smoother flow of cases and faster resolution of disputes, finance minister Arun Jaitley said on Monday.
Jaitley said that although the Sarfaesi Act has worked well, the slow procedure at the DRT level at times can defeat the provisions available to the lenders in the Act itself.
“I have suggested to the department of financial services (DFS), since the administration of the DRT is not under the judicial authority but the department looks after it, on a high priority basis to consider the computerisation of the entire procedures of the DRT,” he said.
Jaitley said that the suggestions include the filing of pleadings, the filing of documents and filing of replies would all be done on the internet with only a provision for two oral hearings in a defined period of time, one for an interim order and one for a final order. “All other oral hearings in a DRT could be eliminated. The department of financial services have been told to seriously look at these areas itself,” he explained.
Even as bankers rely on debt recovery tribunals (DRTs) as a legal alternative to recover their bad loans, RBI data show that loans worth more than R2 lakh crore were pending at 33 tribunals till FY14, up from R1.43 lakh crore in FY13.
Bankers say even when a case is resolved, the DRT issues recovery certificates to the lenders and it takes close to a year to locate the assets of the borrower and then find buyers.
RBI governor Raghuram Rajan had said that the amount recovered from cases decided in 2013-14 under DRTs was R30,590 crore while the value of loans sought to be recovered was R2.36 lakh crore. Thus, only 13% of the outstanding NPAs in the tribunals were recovered in FY14.
According to Rajan, even though the law indicates that cases before the DRT should be disposed off in 6 months, only about a fourth of the cases pending at the beginning of the year are disposed of during the year — suggesting a four year wait even if the tribunals focus only on old
Govt open to diluting stake in PSBs to 52%
The government is open to dilute its stake in public sector banks to 52%, Jaitley said and promised more steps to tackle bad loan problems including those involving state power providers. “We are willing to look at all other changes including bringing down government equity to 52% (in state-run banks), and therefore giving additional financial strength and teeth to the banking institutions themselves,” he said.
Addressing the AGM of Indian Banks Association here, Jaitley also said the state-run lenders need to be given independence and should be kept away from any political interference.
Pitching for public sector banks being given independence from political decision-making, Finance Minister Arun Jaitley today said efforts are on to professionalise all personnel-related issues at these banks. Speaking here at a banking industry event, Jaitley also said that the brick and mortar branches may probably lose relevance with alternative channels like online coming up.
‘Confident of keeping fiscal deficit at 3.9%’
Pitching for steps to strengthen ‘real economy’ of India, the finance minister said he is confident of maintaining fiscal deficit at 3.9% in the current financial year. Jaitley also said that inflation was under control and he is keen to better the country’s GDP growth rate from 7.3% in the last fiscal.
Speaking at an event here, the finance minister said, “Euphoria surrounding India can be strengthened if we continue on reform path… Once the real economy strengthens, there will be exciting developments in corporate world and markets”.
(With inputs from agencies)