FinMin colloquium to brainstorm ways to check rising debt recovery cases

DFS will meet DRT and DRAT heads and senior bank executives on December 30 to discuss measures to speed up recoveries as pending cases rose to 0.137 million by September 2025, officials said

The Union Finance Ministry is holding a colloquium on Tuesday to review pending debt recovery cases before debt recovery tribunals (DRTs) and debts recovery appellate tribunals (DRATs) involving public sector banks, which soared to 137,000 involving ₹7.49 trillion in September. 

 

“The colloquium will see the participation of chairpersons of DRATs, presiding officers of DRTs, and senior bank executives. The move comes against the backdrop of a worrying rise in unresolved cases before DRTs, and aims to deliberate on possible measures that can be adopted going forward to ensure faster recovery of public money,” according to senior government officials who spoke on condition of anonymity.

 

He said that the upcoming meeting aims to identify bottlenecks, streamline procedures and explore measures to improve efficiency and effectiveness of DRTs and DRATs, which play a critical role in the recovery of stressed assets in the banking system.

 

The source said that by March 31, 2025, the number of pending cases rose sharply to around 1,21,885 with the total amount involved increasing to ₹7.67 trillion. The trend continued into the current financial year. By September 2025, pending cases crossed 1,37,000 although the total amount involved marginally declined to ₹7.49 trillion.

 

“Recoveries during the first half of FY 2025-26 (April–September) stood at ₹3,146 crore, indicating sustained efforts by banks but also underlining persistent challenges in accelerating debt resolution,” said the official.

 

An email sent to the finance ministry for the comment remained unanswered till the press time.

 

“Discussions may also take place on the issues like robust monitoring and oversight mechanisms by banks for increasing recovery through DRTs; prioritisation of high value cases in DRTs for optimal recovery; use of alternate dispute resolution mechanisms including Lok Adalats for expeditious disposal of cases, intensive training of presiding officers and other officials of DRTs, introduction of further reforms to reduce turn-around time for various processes in DRT proceedings and so on,” source added.

 

The source said that the disposal of cases through Lok Adalats at regular intervals has significant potential to accelerate the resolution of cases before DRTs. In FY25, the number of settlements was 7,731, while the recovery amount stood at ₹12,007.67 crore.

 

In the current financial year FY26 (2025-26), up to December 15, 2025, Lok Adalats have facilitated the settlement of 7,486 cases, yielding recoveries of ₹7,141.10 crore.

 

In the last colloquium of DRTs in May 2025, the finance ministry had urged all stakeholders to collaborate in reducing pendency of cases at debt recovery tribunals (DRTs) by establishing an effective recovery ecosystem. This would facilitate the redeployment of capital locked in cases pending before DRTs for productive use in the economy, the finance ministry said in a statement.

 

In the same meeting, DFS Secretary M Nagaraju highlighted various key initiatives taken by the department such as adoption of revised DRT Regulations, mandatory e-filing, hearing through video-conferencing, hybrid hearings etc. for reducing turnaround time of the matters adjudicated by the tribunals.