Ernakulam to get second Debt Recovery Tribunal

TH July 11, 2014 12:19 IST

 

Union Finance Minister Arun Jaitley has proposed the setting up of a Debts Recovery Tribunal (DRT) in Ernakulam along with five others to be established at various cities in the country. It will be the second DRT for Ernakulam. 

The present Ernakulam tribunal, with jurisdiction over Kerala and Lakshadweep, is functioning at Panampilly Nagar in the city.

DRTs deal with cases of debt in excess of Rs.10 lakh, as per the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

 The Ernakulam tribunal had been taking up cases of recovery, but delay in arriving at settlements had been a cause for concern.

 The delay is often unavoidable due to the primary necessity to examine a large number of documents and interact with the individuals concerned, banking sources said.

There has been a demand for another tribunal in order to have a speedy settlement of cases, a senior official of Union Bank of India, the Lead Bank of the district, told The Hindu. 

The Finance Ministry was keen on settling cases pertaining to recovery of stressed assets within six months, he said.

 The location of Ernakulam at the centre of Kerala could be the reason for deciding on setting up yet another tribunal in the city, according to him.

The present tribunal is understood to have about 3,000 cases pending before it. The tribunal, with about 30 employees, generally disposes of about 100-150 cases a month. 

The Finance Ministry had already examined the prospects of setting up a new tribunal, a representative of the tribunal said.

Rs 2,500 crore bank fraud: CVC examining case against 24 officials

ET :29 NOV, 2012, 08.41PM IST, PTI 



NEW DELHI: The Central Vigilance Commission is examining a reference received from Punjab National bankBSE 2.51 % involving 24 of its officials in an alleged fraud involving over Rs 2,500 crore.

CBI had in April 25, last year registered a case against Directors of a Mumbai-based construction company and others for their alleged involvement in cheating Punjab National Bank (PNB) and causing losses worth several crores.

According to information given by Minister of State for Finance Namo Narain Meena in the Rajya Sabha today, the company has been reportedly sanctioned credit facilities under regular consortium--Rs 2,510 crore--and as China Project consortium -- Rs 410 crore-- with 26 banks, with PNBBSE 2.51 % as lead bank.

"It has been further informed by the CVC that PNB had made reference in September 2012 involving 24 officials, which is under examination in CVC," Meena said.

The exposure of loan on the company in all consortium banks is Rs 2,529.62 crore as on March 31, 2011, the Minister said.

Of these, a highest of Rs 409.97 crore is by PNB, followed by Rs 309.51 crore by UCO bankBSE 2.86 %, Rs 216.64 crore by United Bank of IndiaBSE 10.52 %, Rs 176.72 crore by Union Bank of IndiaBSE 3.61 %, Rs 129.77 crore by State Bank of BikanerBSE 2.44 % and Jaipur, Rs 102.82 crore by Indian Bank and Rs 102.45 crore by Central Bank of IndiaBSE 2.40 % among others.

"Reserve Bank of India (RBI) had reported that the consortium banks had lodged claims with Export Credit Guarantee Corporation of India (ECGC) for the invoked guarantees. ECGC on October 7, 2011 had expressed their inability to consider the claim. The case has been again represented on November 23, 2011.

"A recovery suit before Debt Recovery Tribunal (DRT) was filed on November 5, 2011. The members of the consortium have also initiated recovery proceedings under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002," the Minister said.

In order to make third parties and professionals accountable, who have played a vital role in credit sanction or disbursement or facilitated the perpetration of frauds, Meena said that banks have been advised to report to Indian Banks' Association (IBA).

"IBA in turn will prepare caution lists of such parties for circulation among the banks," he said

Debt Recovery Tribunal Banks – An Explanation

Debt Recovery Tribunal Banks is method, 

which has been used for collecting the debt from individuals 

who have failed to pay it. This kind of recovery deals with 

global debts being recovered by third parties. 

 

The debt recovery tribunal banks will be useful to collect 

the bad debts from different institutions or individuals. 

A system in place is India is a best example for this kind. 

In India, government has created twenty-nine debt recovery 

tribunals banks to recover such debts. But in the United States,

this system isn’t used in similar way.

Debt Recovery Tribunal Banks are set up in most of the states. 

There are crucial area of the bank and financial structure of the 

rganization too. Good to see, the work that done to collect the 

unpaid debts is very useful for keeping the countries economy in 

right way. Depending on the need, most of the area will have lot 

of these systems that already set up. For instance, in India, few 

of the big area like New Delhi and Mumbai have 3 or more of these

services working.

As soon as these debt recovery tribunal banks are established in 

any area, the government will provide a specific amount of jurisdiction 

to them. Very few areas, like those situated in remote places, the 

jurisdiction of the banks is pretty large. In some cases, one-debt recovery 

tribunal banks will have jurisdiction over other states because of the needs 

of that area. The larger the number of cases in particular area is, the more 

preference it is to have the correct amount of debt recovery tribunal banks 

to assist in such places.

The establishment and management of debt recovery tribunal banks have 

been regulated by the laws of the country. 

 

In India, A Presiding Officer who will generally head the institutions.

One or two Recovery Officers may work within the organization. 

In India, the Recovery of Debts Due to Banks and Financial Institutions 

Act, from 1993 is the law, which has been used to control this kind of situations.

Debt Recovery Tribunal Banks are not generally used in United States. 

Instead, collection agencies entrusted that work and they’re very frequently 

a third party provider rather than a government institutions. 

 

You need work with these organizations if you are dealing 

with international debts. It will assist you to stay out of any problems.