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Informist, Tuesday, Sep 24, 2024

 

By Priyasmita Dutta and Sagar Sen

 

NEW DELHI – The finance ministry is set to launch revamped versions of its debt recovery and online auction portals, said a senior official of the ministry, in a bid to improve efficiency and unclog the system. As per the official, while launching the revamped e-DRT 2.0 portal will be a year-long project, the e-Bkray portal – an updated version of the e-Auction platform used to auction properties of defaulters taken over by banks – has already seen a soft launch and will be inaugurated in the next couple of weeks.

 

The finance ministry’s Department of Financial Services has already approved revamping the e-DRT system, the official said. Meanwhile, training of recovery officers for the e-Bkray portal has been completed and banks are ready with the systems for the rollout. "We are awaiting the inauguration of the (e-Bkray) portal by the Finance Minister (Nirmala Sitharaman). Hopefully, it will be done in the next 10-15 days," the official added.

 

The revamping of the two portals comes on the backdrop of the limited success of the debt recovery appellate tribunals in helping banks and financial institutions recover their dues. Cases worth around 13 trln rupees are pending with these tribunals, with only a little recovery seen in high-value cases in the last one-and-a-half years--600 bln rupees by the tribunal's Mumbai bench, 400 bln rupees by the Delhi bench, and 340 bln rupees by the Chennai bench.

 

"These recoveries are only a fraction of the cases, and more needs to be done," the official cited above said on the condition of anonymity.

 

While bankers, in the past, have called for smoother functioning of the debt recovery process, the Reserve Bank of India last year pushed banks to improve recoveries.

 

"We would like banks to redouble their efforts, because these are accounts which are packed under a special account, and we would like to see more and more recoveries because they directly go into aiding the P&L (profit and loss) of the banks and contribute to their financial well-being," RBI Deputy Governor J. Swaminathan had said.

 

India's largest bank, State Bank of India, reported recoveries and upgrades worth 36.66 bln rupees in Apr-Jun, largely unchanged from 36.07 bln rupees in the same period last fiscal.

 

The e-DRT system was launched five years ago to allow electronic filing of pleadings in tribunals, with a universally accessible repository of information. The system is centralised and the entire process of intimation, summons, and notices is digital. However, it failed to take off despite nudges from the Department of Financial Services to banks. As part of the revamp, the finance ministry is integrating the system so that scrutiny of pleadings can be done digitally.

 

Once the e-DRT 2.0 portal is ready, the government will integrate the bank's debt recovery and loan management systems through Application Programming Interfaces, or APIs. "That is an ambitious project...a year-long project. But we hope to do it," the official said.

 

The finance ministry has held extensive discussions with the top brass of banks and debt recovery tribunals on the legal changes required to expedite debt recovery under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act and the Recovery of Debts and Bankruptcy Act. The most recent meeting on this matter was held on Saturday.  End

 

Edited by Tanima Banerjee

 

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