India: Finance Ministry to ease Debt recovery

October 1, 2018
Ministry of Finance

Debt recovery process in India

With the increasing growth and development witnessed in recent times, India is becoming an industrious country, reaching greater heights of business operations. Rise in the aspirations of the entrepreneurs often leads to raising of capital in order to fulfil the demands being made to them. The country has been facing the threat posed by the bad debts or non-performing assets (hereinafter referred to as “NPA”) which are loans or advances for which the payment remains outstanding.

Role of the Finance Ministry

One of the most vital ministries of the country, responsible for the regulation and management of the economy of the country is the Ministry of Finance (hereinafter referred to as the “Ministry”). The Ministry concerns itself with taxation, financial legislation, financial institutions, capital markets, centre and state finances, and the Union Budget.

With the view to help the financial institutions to recover their bad debts quickly and efficiently, the Government of India has taken the following steps :


  • It has constituted Debts Recovery Tribunals (hereinafter referred to as the “DRT”) and Debts Recovery Appellate Tribunals (hereinafter referred to as the “DRAT”) across the country.
  • In order to initiate the recovery procedure, lenders can take action under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “SARFAESI Act”).
  • Pursuant to the rules of Recovery of Debts due to Banks and Financial Institutions Act, 1993, the Government has decided to double pecuniary limit to INR 2,000,000 [USD 27818 approx.] for filing applications with DRT, thus, enabling them to focus on high-value matters.
  • Computerisation of records of cases being handled across all DRTs and DRATs Appellate Tribunals has commenced using e-DRT software, which includes e-filing, e-payment of fees, uploading of orders and viewing case status thereby facilitating the parties to the debt recovery proceedings.
  • The Government will also help banks set up a common platform for e-auction of attached properties which will have all details including reserve price.

Working towards the progressive approach of minimizing the burden of bad loans on the lenders, the Government is making continuous efforts in the form of simplified judicial systems and digitalization.


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