Recovery of bad loans has been a pain in the neck for financial institutions and banks for a long time. Due to the loopholes in the system and the absence of stringent laws, there was a massive increase in the percentage of loans turning into Non-Performing Assets or NPA.

Increasing cases of NPA became a cause for concern, and it leads to the formation of DRT or Debt Recovery Tribunal after passing the RDDBFI Act in 1993.

DRT handles loan disputes above 10 Lakh. It deals with the appeals against the order passed by DRT.

Role of DRT


  • The primary role of DRT is to recover money from borrowers due to financial institutions and banks.
  • The power of tribunal is restricted to settle cases recuperation of advance as guided by the RBI to banks.
  • The powers of DRT are equivalent to the District Court.
  • There is a recovery officer to execute the recovery certificate passed by the presiding officer.
  • To emphasize the speedy disposal of npa account settlement cases, the DRT follows a proficient legal procedure.

The process of DRT


Application filing can be done in two ways.

Either you can do it directly to the DRT or through SARFAESI; there are two ways of applying.

Direct Application path


Here, the application is made to the DRT after paying off the required fee. There are 33 DRTs in 22 locations such as drt mumbai. Under Section 19 of the RDDBFI Act, all prerequisites are mentioned.

The application has to be submitted to the DRT that falls under the same jurisdiction region where the bank or financial institution runs the business.

Steps of hearing of the case


  • Filing of reply
  • Claim for counterclaim
  • Admission of liability by the defendant
  • Affidavit

Interim order


DRT has the power to pass an interim order against the defendant, restricting him from transferring or disposing of the property without the assent of the tribunal.