Close to 43,000 cases involving a whopping Rs 1.43 lakh crore were pending with 33 debt recovery tribunals (DRTs) across the country at the end of FY13. This has added to the woes of banks and financial institutions and asset reconstruction companies looking to buy out these assets.
Data compiled by the finance ministry showed that the number of original applications (cases filed by banks and financial institutions to recover their debt) pending in the DRTs jumped 21.6% from 35,221 at the end of 2011-12 to 42,819 as on March 31, 2013, while the amount involved in the cases rose 30% from R1.1 lakh crore to R1.43 lakh crore.
Of course, the DRTs managed to dispose of 9,816 cases in the last fiscal involving R18,162 crore. But fresh filings of 14,666 cases in the last fiscal with claims of R48,037 crore pushed up the overall pendency.
Incidentally, the net non-performing assets or NPAs (bad loans after making provisions) of banks had gone up 51% in FY13 to R92,825 crore. According to a recent Crisil report, the gross NPAs of banks are slated to increase from 3.3% in March 2013 to 4% by March 2014.
The delays in DRTs have in turn affected the value of assets that are to be recovered, which is a matter of concern for banks, financial institutions and asset reconstruction companies.
The huge pendency is a worry especially because DRTs were set up by the government under the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 (RDBFI Act), to expedite the recovery of bad debts of banks and FIs. Notably, the Act advises the tribunals to dispose of each case within 180 days from the date of its filing.
Topping the list of pendency is the Mumbai region where the three DRTs have a total pendency of 3,632 cases involving Rs 43,401.37 crore. The Kolkata region, having three DRTs, also has a high pendency with 11,212 cases involving Rs 20,642.74 crore.
The Chennai region with three DRTs had 1,703 cases involving Rs 7,742.66 crore, while the Delhi region with three DRTs had a total pendency of 2,943 cases involving Rs 18,908 crore. Hyderabad with a single DRT had 2,590 pending cases involving Rs 11,614 crore.
The rising pendency is due to many reasons including the shortage of DRTs and debt recovery appellate tribunals (DRATs) in the country.
A PSB officer said owing to the delays in DRTs, the lenders