The government is undertaking a thorough reassessment of the Debt Recovery Tribunals (DRTs) Act, considering potential amendments to accommodate modern communication methods.
According to sources close to the matter, a panel is scrutinising DRTs regulations with the primary objective of expediting the recovery process.
The Debt Recovery Tribunals, abbreviated as DRTs, currently oversee an estimated 20 million cases involving staggering amounts totalling ₹13-14 lakh crore.
Recognising the need to address this backlog, the government has embarked on a comprehensive review of end-to-end DRT processes, ranging from initial application to final resolution.
According to the sources, it is likely that SMS and emails dispatched by banks to debtors could potentially qualify as legal notices under the revised DRT provisions.
However, should the review reveal synergies with other legislative frameworks, adjustments to complementary acts could also be contemplated to facilitate a more effective debt recovery ecosystem. For instance, to provide legal backing to e-notices issued by banks, the IT (Information Technology) Act may also need changes. Under those circumstances, the government would need to bring amendments to the laws in the Parliament.
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The Debt Recovery Tribunals (DRTs) Act was introduced in 1993 to establish a legal framework facilitating the prompt adjudication and retrieval of debts owed to banks and financial institutions. However, its effectiveness in expediting debt recovery was found to be limited.
Consequently, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act of 2002 was enacted to address these deficiencies and establish a more resilient framework for debt recovery.
Over the years, the government has implemented several amendments to both the acts. The most recent modifications occurred in 2016, when the government proposed amendments to these acts in Parliament, aiming to enhance the effectiveness of debt recovery processes.
(Edited by : Amrita)
First Published: Mar 19, 2024 4:08 PM IST
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