ANALYSING THE DEBT RECOVERY MECHANISM IN INDIA: A CRITICAL STUDY OF THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993

AUTHOR – EMMANUEL SOKA JOSEPH* & DR.SUNIL KUMAR**, *LL.M. (MASTER OF LAWS) & **PROFESSOR, UNIVERSITY INSTITUTE OF LEGAL STUDIES, CHANDIGARH UNIVERSITY, MOHALI (PUNJAB).

BEST CITATION – EMMANUEL SOKA JOSEPH & DR.SUNIL KUMAR, ANALYSING THE DEBT RECOVERY MECHANISM IN INDIA: A CRITICAL STUDY OF THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 4 (4) OF 2024, PG. 389-394, APIS – 3920 – 0001 & ISSN – 2583-2344.

Abstract:

Debt recovery in India has long been a significant challenge for financial institutions and creditors, impacting economic stability and growth. The Debt Recovery Tribunals (DRTs), established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, represent a pivotal step in streamlining the recovery process. This Act was introduced to expedite the resolution of disputes related to the recovery of debts owed to banks and financial institutions, thereby reducing the burden on conventional courts.

The DRTs operate with the objective of providing a specialized forum for creditors to address claims more efficiently. This abstract reviews the framework of the DRT Act, its operational mechanisms, and the legal provisions that empower these tribunals. It also examines the effectiveness of the DRTs in facilitating quicker recovery of debts, their impact on the banking sector, and the challenges faced, including delays in proceedings and enforcement issues. Furthermore, this paper explores the evolution of debt recovery laws in India, highlighting the role of the DRTs in enhancing access to justice for creditors while considering the implications for debtors. It emphasizes the need for reforms to strengthen the effectiveness of the DRTs, address procedural bottlenecks, and ensure a balanced approach that protects the interests of all stakeholders.