Significant Backlog in Debt Recovery: Challenges for Banks

Monday, 29 July 2024, 09:32

Banks are currently facing a substantial backlog in debt recovery cases, with estimates suggesting it could take up to seven years to resolve the over 200,000 pending cases at Debt Recovery Tribunals (DRTs). In response, the government is implementing plans to enhance the capacity of both DRTs and National Company Law Tribunals (NCLTs), aimed at improving the efficiency of the debt recovery process. These initiatives intend to alleviate the strain on existing tribunals and streamline the recovery of debts, emphasizing the need for reform in the Insolvency and Bankruptcy Code.
Economictimes
Significant Backlog in Debt Recovery: Challenges for Banks

Challenges of Debt Recovery for Banks

Banks are grappling with a staggering backlog in debt recovery cases, expected to take up to seven years to clear. Currently, there are over 200,000 cases pending at Debt Recovery Tribunals (DRTs).

Government Initiatives to Boost Capacity

To tackle this issue, the government is initiating plans to enhance the capacity of DRTs and National Company Law Tribunals (NCLTs). This aims to strengthen the Insolvency and Bankruptcy Code and improve the efficiency of debt recovery.

Conclusion

The recent initiatives are crucial to alleviate the backlog and ensure a more effective debt recovery system, ultimately reducing the burden on the existing tribunals.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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