DFS pushes digitisation, reforms to speed up recoveries through DRTs

The DFS is pushing mandatory e-filing, virtual hearings and legal reforms to improve disposal rates and speed up recoveries through debt recovery tribunals

Department of Financial Services (DFS) secretary M Nagaraju  said on Tuesday that it has taken key initiatives like adoption of mandatory e-filing, use of video conferencing and hybrid hearings, among others, for deepening the digitisation process in debt recovery tribunals (DRTs) and boost recovery.

 

He was addressing a meeting colloquium of chairpersons of debts recovery appellate tribunals (DRATs) and presiding officers of DRTs in New Delhi.

 

The colloquium was attended by senior officers of the DFS, representatives of various public and private banks as well as Indian Banks’ Association representatives.

 

According to the finance ministry statement, key areas of deliberation included measures to strengthen banks’ monitoring and oversight mechanisms to boost recoveries and greater focus on high-value cases to optimise outcomes. Among other important areas was improved utilisation of Lok Adalats as an alternative dispute resolution mechanism for faster disposal of cases.

 

 

Participants also discussed the need for process reforms to further improve disposal rates in DRTs.

 

“The discussions were held on the suggestions regarding amendments to the Recovery of Debts and Bankruptcy Act, 1993 and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in order to further enhance the effectiveness of these laws,” said the finance ministry statement.

 

“The tribunals were urged to learn from the best practices followed in other DRTs where disposal is impressive,” it 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.

 

During FY26 (2025-26), up to December 15, 2025, Lok Adalats have facilitated the settlement of 7,486 cases, with 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 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.