Summary
The Finance Ministry has raised concern over the rising backlog in India’s Debt Recovery Tribunals (DRTs). Urging joint action, it highlights delays in recovery of bad loans and NPA cases. The government aims to strengthen the DRT system for faster resolution, especially post-COVID disruptions.
Introduction
Debt tribunal backlog has become a growing concern for India’s financial sector. The Finance Ministry has now called for coordinated action to reduce pending recovery cases at Debt Recovery Tribunals (DRTs) and Debt Recovery Appellate Tribunals (DRATs). This comes amid mounting NPAs and sluggish resolution timelines that affect banks, NBFCs, and overall credit flow.
Why the Debt Tribunal Backlog Matters
Delays in the recovery of defaulted loans create ripple effects across the economy:
- Weakens banks’ balance sheets
- Increases cost of credit
- Slows down capital recycling
- Impacts small business lending and MSME revival
As per recent data presented by the Finance Ministry:
- Over ₹1.9 lakh crore worth of recovery cases are stuck in DRTs
- Over 1 lakh cases are pending across 39 tribunals nationwide
Ministry’s Urgent Call: Joint Push for Faster Disposal
The Finance Ministry has urged coordination between:
- Department of Financial Services (DFS)
- Public Sector Banks (PSBs)
- DRT and DRAT authorities
- Ministry of Law and Justice
Key directions issued:
- Vacant posts at DRTs to be filled fast
- Digitisation and e-filing to be scaled up
- Banks to improve case preparation to avoid adjournments
- Periodic review by Nodal Officers in each bank to track pending matters
Legal Reference: DRT Framework
The functioning of DRTs and DRATs is governed by the Recovery of Debts and Bankruptcy Act, 1993.
Key features:
- Tribunals handle recovery cases above ₹20 lakh
- They have the powers of a civil court
- Appeals lie with DRAT, headquartered regionally
But experts say that case disposal rates remain under 10% annually, due to:
- Vacancies in presiding officers
- Overlapping jurisdiction with NCLT in IBC matters
- Inadequate staff and infrastructure
Expert Insight: Fixing DRTs is Key to Economic Revival
According to CA Dinesh Kumar, a banking consultant:
“DRT reforms are low-hanging fruit. A focused approach on capacity building and tech adoption can clear a big chunk of NPA-related bottlenecks without major legal overhaul.”
Steps Taxpayers & Businesses Should Track
If you’re dealing with any recovery proceedings under DRT, here’s what you should check:
- Timelines under DRT Act for filing appeals
- E-filing readiness of your legal counsel
- Check if your case can be diverted to Lok Adalats or SARFAESI for faster resolution
- Monitor Ministry and bank circulars for fast-track schemes
FAQ Section
Q1. What is causing the DRT backlog?
A mix of vacant posts, slow procedural timelines, and overlapping jurisdiction with IBC/NCLT cases.
Q2. How is the government planning to resolve it?
By filling vacancies, digitising tribunals, ensuring better case preparation by banks, and inter-departmental coordination.
Q3. Can individuals be affected by DRT delays?
Yes. If you’re a guarantor, co-borrower, or facing recovery notices, delays can prolong your legal uncertainty.
Closing
Debt tribunal backlog is more than just a bureaucratic issue—it affects India’s economic recovery and credit discipline. The Finance Ministry’s push for joint action is a critical step forward.