DFS holds colloquium with DRATs, DRTs to strengthen digitised debt recovery system

Addressing the gathering, the Secretary, DFS, highlighted the range of initiatives undertaken to strengthen digital integration and improve the functioning of tribunals.

The Department of Financial Services (DFS) under the Ministry of Finance convened a colloquium of Chairpersons of Debts Recovery Appellate Tribunals (DRATs) and Presiding Officers of Debts Recovery Tribunals (DRTs) at Vigyan Bhavan, New Delhi, bringing together key stakeholders in India's debt recovery ecosystem. Senior officials from DFS, representatives of public and private sector banks, and members of the Indian Banks' Association participated in the deliberations.

Deepening Digitisation in the Tribunal System

Addressing the gathering, the Secretary, DFS, highlighted the range of initiatives undertaken to strengthen digital integration and improve the functioning of tribunals. These efforts include:

• Mandatory e-filing of cases

• Wider use of video conferencing

• Facilitation of hybrid hearings

• Greater reliance on digital tools to enhance transparency and efficiency

The Secretary emphasized that digitisation is not only modernizing tribunal operations but also improving access, reducing delays, and facilitating streamlined case management for banks and litigants.

Strengthening the Recovery Framework in DRTs

Participants engaged in wide-ranging discussions aimed at enhancing the effectiveness, speed, and outcomes of the debt recovery process. Key focus areas included:

• Strengthening oversight and monitoring mechanisms within banks to boost recovery performance through DRTs

• Prioritizing high-value cases to optimize recoveries and reduce financial stress in the banking sector

• Increasing the use of Lok Adalats as an alternative dispute resolution mechanism for faster settlement of cases

• Introducing process reforms to improve disposal rates in DRTs

• Capacity-building measures, including structured training programmes for Presiding Officers, Recovery Officers, Registrars, and authorised bank officers

These discussions reflect a shared understanding that both institutional reforms and human resource development are essential for a more responsive and capable debt recovery framework.

Legislative Reforms Under Consideration

The colloquium also examined suggestions related to potential amendments to key legislations governing debt recovery:

• The Recovery of Debts and Bankruptcy Act, 1993

• The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002

Such amendments aim to improve legal clarity, strengthen enforcement mechanisms, and accelerate the resolution of stressed assets.

Encouraging Adoption of Best Practices

Tribunals were encouraged to adopt best practices demonstrated by high-performing DRTs, particularly in areas where case disposal rates and recovery outcomes have shown marked success. The Secretary stressed that cross-learning and replication of proven models will help create a more uniform and efficient debt recovery ecosystem nationwide.

The colloquium reaffirmed the Government's commitment to strengthening the financial dispute resolution framework, modernizing debt recovery mechanisms, and promoting a digitally empowered financial governance structure.