DEBTS RECOVERY TRIBUNALS (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     1st May 2024        
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Context: A government official recently stated that the Centre has instructed state-owned lenders to refrain from seeking unnecessary adjournments before debt recovery tribunals.

Debts Recovery Tribunals

  • About: DRTs were established to facilitate debt recovery involving banks and other financial institutions with their customers.
  • Establishment: DRTs were set up after the passing of the Recovery of Debts due to Banks and Financial Institutions Act (RDBBFI), 1993. Section 3 of the RDDBFI Act empowers the Central government to establish DRTs.
  • Current Status:Presently, there are 39 functioning DRTs and 5 DRATs nationwide.
  • Leadership Structure: Each DRT is headed by a Presiding Officer, while each DRAT is headed by a Chairperson.
  • Tenure of Officers: The Presiding Officer of a DRT serves a five-year term with eligibility for reappointment.
  • Powers and Functions:

o DRTs enforce provisions of the RDDBFI Act, 1993, and the SARFAESI Act, 2002.

o They possess broad authority to issue comprehensive orders, including hearing cross suits, counter claims, and allowing set-offs.

o However, they are limited in hearing claims of damages, deficiency of services, breach of contract, or criminal negligence by lenders.

o DRTs can appoint Receivers, Commissioners, pass various types of orders, review their decisions, and hear appeals against Recovery Officers' orders.

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