Public Sector Banks have requested the Government to arbitrate in speeding up the debt recovery process, which includes faster approvals from District Magistrates, which could enable possession of assets from the borrowers.
- To quote, there have been many cases wherein the orders issued by the DRTs are not being enforced faster, due to delay in approvals from District Magistrates.
- There are instances that wherever assets which are pledged are required to be possessed from the defaulters, under SARFAESI laws, Magistrates have delayed in giving approvals. This in turn jeopardises the efforts put by the bankers in making recoveries in time.
Background:
- Banking system is under heavy NPA threat of over Rs. 9 lakh crore.
- The Government it is learnt has assured bankers the matter of delay in approvals at the District Magistrates level will be taken up with due respect with the concerned ministry.
- Regarding Insolvency and Bankruptcy Code (IBC), bankers have informed that many cases are going beyond the timeline of 270 days specified under the code.
- This was said tobe due to the reason that the promoters of the Debtors company or the bidders are themselves going for legal challenge of the process instead of going for NCLT’s final verdict and again going for an appeal after that.
- Contesting at every stage of the process only delays the IBC process and there are cases which have been dragged for over a year.
- Bankers also insisted that the initiation of DRT process should also be speeded up.
- From the capital infusion side, bankers including which are under Prompt Corrective Action suggested that the Government offload the capital infusion during the early part of the financial year instead of offloading during the fag end of the financial year.
Add on news:
Two apps, one for MSME and another for financial inclusion were launched to facilitate in
- locating the nearest bank branch in the area and
- locating the nearest ATM in the vicinity
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