DBOD.No. BP.BC.174/09.06.001/98-99

September 24, 1998
Chaitra 9, 1920 (Saka)

The Chairmen and Managing Directors/Managing Directors Public Sector Banks

Dear Sir,

Working group to review the functioning of debts recovery tribunals (drts) - recommendations

You are aware that the Reserve Bank of India had constituted a Working Group under the Chairmanship of its Legal Adviser, Shri N.V. Deshpande, to review the functioning of Debts Recovery Tribunals (DRTs) and to suggest measures for the effective functioning of DRTs. The Working Group has since submitted its final report to the Reserve Bank of India on 31st August, 1998.

The Working Group has made, interalia, the following observations/recommendations in paragraphs 2.14, 2.30 and 3.12 of its report regarding banks and financial institutions:

a) Banks and financial institutions being the interested parties, it should be their responsibility and obligation to ensure that the notices to teh defendants are properly served and the matter is not prolonged merely on account of non-service of summons on the parties.

b) The Managements of the banks and financial institutions should actively interact with the Unions/Federations for the expeditious recovery proceedings.

c) The banks and financial institutions in their own interest should impress upon the officers and staff to take keen interest in the proceedings so that the amounts can be recovered without any difficulty making the expeditious recovery procedure prescribed under the DRT Act a success.

All the banks are advised to take necessary steps for the implementation of the above recommendations immediately. the banks may also consider constituting a separate cell for dealing with cases pending/filed with Debts Recovery Tribunals.

Yours faithfully,

(Smt. Devaki Muthukrishnan)

General Manager