Definition
Debt Recovery Tribunal (DRT)
A Debt Recovery Tribunal is a specialised forum that adjudicates banks' and financial institutions' claims for recovery of defaulted debts above a threshold.
DRTs were set up under the Recovery of Debts and Bankruptcy Act to provide faster recovery than ordinary civil courts. Lenders file applications for recovery, and the tribunal can issue recovery certificates enforced by a recovery officer.
DRTs also hear borrower challenges to action taken under the SARFAESI Act. While faster than civil courts in principle, DRTs face heavy caseloads, so for large corporate defaults lenders increasingly prefer the IBC route through the NCLT.
Related terms
- Recovery (Loans)Loan recovery is the money a bank gets back from a defaulted or written-off borrower, through settlement, asset sale, legal action or insolvency proceedings.
- SARFAESI ActThe SARFAESI Act lets banks and certain NBFCs enforce security and seize a defaulting borrower's pledged assets without going through the courts.
- Insolvency and Bankruptcy Code (IBC)The Insolvency and Bankruptcy Code, 2016 is India's unified framework for time-bound resolution or liquidation of defaulting companies through the NCLT.
- National Company Law Tribunal (NCLT)The NCLT is the adjudicating authority for corporate insolvency under the IBC and for company-law matters such as mergers and oppression cases.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.