DRT- Allahabad

The Hon’ble Debt recovery Tribunal Allahabad, 

was eastablished vide GSR No: 274 (E) dated 31/03/2000.

Territorial Jurisdiction:

The Hon’ble Tribunal covers  

Allahabad, Auraiya, Azamgarh, Ballia, Banda, Basti, Budan, Chandauli, Chitrakut, Deoria, Etah, Etawah, Farrukahabad, Fatehpur, Firozabad, Ghazipur, Gorakhpur, Hamirpur, Jalaun, Jaunpur, Jhansi, Kanauj, Kanpur (Rural), Kanpur (Urban), Kaushambi, Kushinagar, Lalitpur, Haharajganj, Mahoba, Mainpuri, Mau, Mirzapur, Sant Kabir Nagar, Sant Ravi Das Nagar, Sidharthnagar, Sonbhadra, Varnasi districts of  & any other area in State of Uttar Pradesh not covered within the jurisdiction of DRT Lucknow: Debt Recovery Tribunal Lucknow.

Presiding Officer: Hon’ble Shri B.N. Dash is Presiding officer of DRT Allahabad.

Address:

9/3 Panna Lal Road, Allahabad

Uttar Pradesh, India

DRT -Jabalpur

The Debt Recovery Tribunal Jabalpur (DRT Jabalpur) has been 

constituted by vide notification GSR No. 181 (E) dated 07/04/1998.

Jurisdiction:

The territorial jurisdiction of the Debt Recovery Tribunal

Jabalpur (DRT Jabalpur) covers:

Madhya Pradesh and Chhattisgarh.

Presiding Officer: Hon’ble Ms. M.G. Padmini

Address:

Debt Recovery Tribunal Jabalpur

Civil Lines, Jabalpur,

Madhya Pradesh

DRAT- Allahabad

The Hon’ble Debt Recovery Appellate Tribunal Allahabad (DRAT Allahabad) has been constituted by vide notification GSR No. 5(E) dated 03/01/2001.  

Debt Recovery Appellate Tribunal Allahabad (DRAT Allahabad) came into existence on 3rd January, 2001.

Chairperson: Hon’ble Justice Jatinder Mohan Malik is the Chairperson of Debt RecoveryAppellate Tribunal Allahabad (DRAT Allahabad). He took over charge on 21/07/2008.

Address:

Debt Recovery Appellate Tribunal Allahabad

147-A-58/1, J.L. Nehru Road,

Tagore Town, Allahabad-211001

Uttar Pradesh, India

Debt Recovery Appellate Tribunal Allahabad (DRAT Allahabad)

has jurisdiction over three DRTs:

Debt Recovery Tribunal Allahabad (DRT Allahabad)

Debt Recovery Tribunal Lucknow (DRT Lucknow)

Debt Recovery Tribunal Jabalpur (DRT Jabalpur)

Debt Recovery Tribunal Madurai

The Hon’ble Debt Recovery Tribunal Madurai was eastablished vide GSR No. G.S.R 15(E) dated the 09/01/2007.

Jurisdiction:

The territorial jusrisdiction of the Hon’ble Tribunal covers Districts of Madurai, Kanyakumari, Tirunelveli, Tuticorin, Virudhunagar, Sivaganga, Ramnad, Theni, Erode, Salem, Namakkal, Trichy, Karur and Dindigul in the State of Tamil Nadu.

Presiding Officer: Hon’ble Shri D. Stanley David is Presiding Officer of  Debts Recovery Tribunal Madurai (DRT Madurai)

Address: 3rd & 4th, Floor Kalyani Towers, 4/162, Madurai-Melur Road, Uthaugudi,Madurai, 625 107

Reference to Board, BIFR, SICA

The Sick Industrial Companies (Special Provisions) Act, 1985

Section 15 – Reference to Board: (1) when an industrial company
has become a sick industrial company, the Board of Directors of
the company, shall within sixty days from the date of finalisation
 of the duly audited accounts of the company for the financial year
 as at the end of which the company has become sick industrial
company, make a reference to the Board for determination of the
measures which shall be adopted with respect to the company:

Provided that if the Board of Directors had sufficient reasons
 even before such finalisation to form the opinion that the
company had become a sick industrial company, theBoard of
 Directors shall, within sixty days after it has formed such
 opinion, make a reference to the board for the determination
of the measures which shall be adopted with respect to the company:

*[Provide further that no reference shall be made to the Board
 for Industrial and Financial Reconstruction after the commencement
 of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002, where financial assets
 have been acquired by any Securitisation company or reconstruction
company under sub-section (1) of section 5 of that Act:

Provided also that on or after the commencement of the Securitisation
 and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002, where a reference is pending before the Board for
 Industrial and Financial Reconstruction, such reference shall abate
if the secured creditors, representing not less than three-fourth
in value of the amount outstanding against financial assistance
disbursed to the borrower of such secured creditors, have taken
any measures to recover their secured debt under sub-section (4)
                                     of section 13 of that Act.]

*Inserted by Act 54 of 2002, Section 41 and Sch. (w.e.f. 21/o6/2002)

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.

RBI Move To Allow Restructing of bad loans Helped Bank, industry & Economy

Feb 9, 2010

Did the restructuring of bad loans done by the Reserve Bank of India a year ago help small and medium enterprises recover and also curtail the build-up of bank’s bad loans, or did it just delay the recognition of bad loans?

According to CARE Rating Agency data, top 12 banks had restructured assets worth Rs 32,530 crore in the first quarter ended June 2009 taking their total restructured assets to nearly Rs 73,000 crore.

In December 2008, the RBI granted permission to restructure accounts that are likely to turn bad. The objective was to give a temporary relief to the industry which was in distress as a result of the liquidity squeeze.

In a recent interview to the media, Mr Subir Gokarn, a Deputy Governor of the RBI, said that while the concept of restructuring cannot be blamed there was a risk that assets that were not fundamentally sound also got the option of being restructured. The threat of large bad debts on the restructured portfolio is clearly something that needs to be watched as there may be stress on some banks, he said.

Move Hailed

The Indian Banks’ Association Chairman, Mr M. V. Nair, who is also Chairman and Managing Director of Union Bank of India, said the restructuring move by the RBI must be appreciated. Industries were reeling under non-payments of dues which was beyond their control and the restructuring helped during the liquidity crunch. This saved not just jobs but also industries, he said.

“If the restructuring had not been done the entire system would have collapsed pushing the economy further into a slowdown,” said Mr R. S. Reddy, Chairman andManaging Director, Andhra Bank. If some banks are showing a build-up of bad loans it is non-payment of the interest installments due from September to December 2009 which were restructured for the previous year; it is not that these accounts have become doubtful but eventually pay when cash flow is better, he said.

Lucky Few

Some industries like auto components have been able to overcome the situation and pay up their dues but some have not. Mr Nair said that, therefore, the possibility of default was lower due to therestructuring.

State Bank of India had restructured standard assets of Rs 16,796 crore, of which Rs 996 crore had slipped into the bad loans category, taking the slippage ratio for these to 5.9 per cent.

Mr S. A. Bhat, Chairman and Managing Director, Indian Overseas Bank, said that the restructuring had little impact on a build-up of bad loans of about Rs 3,000 crore as on December 31, 2009. Of the total restructured loans amounting to Rs 8,200 crore, only Rs 745 crore werebad loans. Of this Rs 600 crore worth of assets would be upgraded to standard assets, he said.

Varying Impact

Mr Milind Gadkari, General Manager, Care Rating Agency, said that the restructuring done by public sector banks exceeded that by their private peers. The restructuring of bad loans as percentage of non-performing assets may vary from one per cent to five per cent depending upon the exposure of the banks, he said.

The RBI’s motive in allowing restructuring of doubtful assets was the right move done at the right time. If the regulator had not intervened and done this, it would have created a crises situation not only for banks but the economy as whole, he said.

RBI ready to free all lending rates

RBI ready to free all lending rates:

Wants to deregulate rates on loans to small industries,
agriculture and exporters, may also abolish BPLR concept

Feb. 8--In a game-changing move for the Indian financial sector,
the Reserve Bank of India (RBI) is set to deregulate all lending
rates in the next fiscal year, starting in April.

The Indian central bank has in principle agreed to free the
administered rates on loans to exporters, agriculture and small industries.
A draft circular on the proposal will be posted on its website in the next
few days, inviting comments from the public.

At the next stage, it may even deregulate savings deposit rates,
the last bastion of administered rates for liabilities,
a person familiar with the development said.

Currently, both export loans and loans to small farmers
and small-scale industries are mandated by the banking regulator.


In a parallel move, RBI will also abolish the concept of benchmark
prime lending rate (BPLR), or the rate at which banks are expected
to lend money to their top-rated borrowers. The BPLR, introduced in
November 2003, will be replaced by a base rate and no bank will be
allowed to offer any loan at below the base rate.

RBI's decision to deregulate loan rates follows the recommendations
of an internal panel headed by executive director Deepak Mohanty.
The panel was formed in June to review the BPLR system and suggest
an appropriate loan pricing system. The Mohanty panel report was put
up on RBI website in October, inviting comments from public, until 17 November.

"The central bank has by and large accepted the recommendations
of the panel with minor changes," said the person familiar with the
development who didn't want to be named.
For instance, the panel recommended the one-year deposit rate
as a benchmark for the base rate, but RBI is not in favour of any
benchmark for arriving at the base rate.

All it wants is a transparent process to form the base rate that's non-discretionary.
In other words, no loan can be given at below the base rate.

Currently, around 70% of bank loans are given below BPLR, making
a mockery of the concept. Banks keep their BPLR at an artificially high
rate to protect their interest income. This is because both small loans to
farmers and small industries as well as export loans are linked to BPLR
and when the prime rate goes down, the rates on these loans automatically
decline, depressing their earnings.

Loans to exporters are given at 2.5% below a bank's BPLR while
small loans of up to Rs2 lakh given to agriculture, small-scale industries
and the so-called weaker sections of society are capped at BPLR.

For the past few years, banks have been giving small agriculture loans
at 7% with the government offering a 3% subsidy on such loans
through a budgetary provision.

"While the new base rate concept will be more meaningful than BPLR,
the most significant news for the financial sector is complete deregulation
of lending rates. This will change the way banking is done in India.

It will be interesting to see how banks and consumers respond to this,"
said the banking analyst at a foreign brokerage who declined to be
named because the regulator has not yet made the decision public.

According to him, the base rate will be significantly lower than the BPLR.
"It will be in single digit," he said.

BPLRs of public sector banks vary between 11% and 13% and most
private banks charge even more.

Despite this, banks' net interest margin (NIM), or the difference
between cost of funds and earnings on deployment of funds, will
not be hugely affected as their earnings on those loans which have
so far been administered will go up.
The panel had recommended that once the base rate is introduced,
"there will not be any need to extend any concessional export credit",
and if "any special dispensation is considered necessary,
it should come explicitly from the government in the form of interest rate subvention".

However, banks' NIM will be hit once they are forced to offer interest
rates on a daily average basis for savings accounts.

Although the savings account rate is currently pegged at 3.5%, the
average cost of banks is much lower--at around 2.8%--since they
pay interest only on the minimum balance kept between the
10th and the end of a month. But things will change from April.

A savings account is the most common operating account for
individuals and others for non-commercial transactions.
Banks generally put a ceiling on the total number of withdrawals
permitted and stipulate a certain minimum balance to be
maintained in such accounts.

With the rise in cost of savings accounts from April, banks
want RBI to bring down the interest rate from 3.5%.
The central bank is not willing to do so and instead it may
free this rate. It has asked the Indian Banks' Association,
the national bankers' body, to prepare a report on this.

The option of capping the savings bank rate at the existing 3.5% and
allowing banks to fix the rate within the cap is ruled out because that
will benefit only banks and consumers will not gain.

"We need to study this and see how banks and the consumers
get affected if the savings account rate is freed.

It cannot be done in a hurry," said a senior RBI official
who did not want to be named.

Auction sale- DRT-2-Chennai-on 15th March 2010