In a bid to speed up the recovery of non-performing assets (NPAs) of banks and financial institutions (FIs), finance minister Yashwant Sinha has convened a meeting of bank and FI chiefs to review the functioning of debt recovery tribunals (DRTs) and to take stock of recovery under the one-time settlement scheme.
Top sources in the finance ministry's banking division said the government has decided to set up seven more DRTs by September this year, increasing the number to 29.
The meeting, scheduled for early next week, assumes significance as the one-time settlement scheme prepared by the Reserve Bank of India at the behest of the finance minister has proved to be a non-starter with banks and FIs reporting poor recovery. The scheme draws to a close on June 30.
Banking division officials said that, with the staff selection committee agreeing to recruit people for DRTs, the problem of recovery through this route will be sorted out. Staff constraint has been one of the constant complaints by banks.
According to finance ministry estimates, the 22 DRTs established by the government in the last 4-5 years have reported a total recovery of only Rs 2,500 crore, with Rs 1,300 crore recovered in the last fiscal alone. About 46,000 cases worth Rs 82,500 crore are pending in the DRTs. Of this, cases worth Rs 10,000 crore have been disposed by the DRTs.
In spite of the extension in the one-time settlement scheme by three months beyond the original closing date of March 31 this year, bankers said that recovery has not picked up.
On the contrary, they said there has been a slippage in the total NPAs owed to PSU banks and FIs. According to estimates, gross NPA level of public sector banks rose marginally to Rs 52,806 crore at the end of March, 2001 compared to Rs 52,696 crore in the previous year.
The same also holds true for FIs which had NPAs of the order of Rs 16,959 crore at the end of March 2000. Excluding IFCI Ltd, the other FIs - IDBI, ICICI, Sidbi and IIBI - had managed to recover Rs 1,215 crore at the end March 2000.
Bankers also said that the DRTs have managed to settle cases but a decree has not been passed by them. They also said that the government needs to speed up the proposed legislation on foreclosure. "We should be given powers to attach properties of the defaulters," said a bank chief.
