Last week, the government decided to double pecuniary limit to Rs 20 lakh for filing applications with DRT, following the amendment to rules of Recovery of Debts due to Banks and Financial Institutions Act, 1993.
“This will free up DRTs, leaving them to focus on high-value matters,” said Kumar.
He said the steps taken by the government were part of the finance ministry’s targeted approach to make debt recovery laws and process more effective.
As of June 2018, around 38,376 cases of debt of Rs 10-20 lakh are pending with DRTs, accounting for 38% of the total cases but for merely 4% in value terms.
“This number is rising as the recent data indicates that cases of less than Rs 20 lakh have touched 41% in terms of total cases,” said Kumar. He said 80-85% of non-performing assets (NPAs) cases in the range of Rs 10-20 lakh are fully secured.
“For their recovery, lenders can take action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act),” he said. The government will also help banks set up a common platform for e-auction of attached properties which will have all details including reserve price.
“It will help people from across the country to participate and also help lenders to realise better value for such properties,” said Kumar.
Computerisation of records of cases being handled across all 39 DRTs and five Debt Recovery Appellate Tribunals has commenced.
The e-DRT software, for which a successful pilot has already been concluded, has features similar to the e-court software, which includes e-filing, e-payment of fees, uploading of orders and viewing case status, said Kumar.
Personal guarantor’s details will also be captured if the borrower is a company.
Kumar said the finance ministry has spoken to all states to monitor whether district magistrates pass orders within prescribed limit of 60 days for handing over physical possession of pledged collateral of defaulting borrowers to the lenders.
As many as 10,000 cases with outstanding loans of Rs 40,000 crore are pending before district administrations.