Govt places Bill in LS for faster disposal of debt recovery pleas
The ‘Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016’ -- introduced by Finance Minister Arun Jaitley -- was immediately referred to a Parliamentary Joint Committee.
The Bill seeks to amend provisions in as many as four legislations, including the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The legislation proposes to give RBI powers to regulate asset reconstruction companies, priortise secured creditors in repayment of debts and provide stamp duty exemption on loans assigned by banks and financial institutions to asset reconstruction firms.
Around 70,000 cases are pending in Debt Recovery Tribunals and the proposed amendments are being aimed to “facilitate expeditious disposal of recovery applications”, as per the Bill’s Statement of Objects and Reasons. The government has come up with this legislation at a time when there is mounting concern over loan recovery in view of the Mallya case where the loan default is to the tune of over Rs 9,400 crore.
“Presently, there are approximately 70,000 cases pending in Debts Recovery Tribunals... Cases are pending for many years due to various adjournments and prolonged hearings,” according to the Bill. Another proposal is to empower the central government to provide for uniform procedural rules for conduct of proceedings in the Debts Recovery Tribunals and Appellate Tribunals.