JPC wants NBFCs to be covered by DRTs

The Joint Parliamentary Committee wants to include non-banking financial companies in the ambit of the Debt Recovery Tribunal.

JPC held a close-door meeting in Mumbai discussing banking and financial reforms. The proposal on NBFCs being brought under the purview of the DRT was discussed at the meeting, sources said.

The JPC team included Nationalist Congress Party president Sharad Pawar, BJP MP Kirit Somaiya, Shiv Sena's Union minister for banking and finance Anandrao Adsul, and Renuka Chowdhary.

Confirming this, a well-placed official said: "The proposal is at a very nascent stage. The JPC has only sought the opinion of the DRT on NBFCs being brought under its ambit. If this has to be done it would entail the setting up of additional DRTs and increasing the number of presiding officers and other officials attached to the tribunals. Currently, on an average, around 2,000 cases are pending before each DRT (three in Mumbai and one in Pune). It is still early days for the proposal."

The DRT, a fast-track semi-judicial body, has effected recoveries of nearly a 1,000 crore (Rs 10 billion) over the last three years from erring corporate debtors of banks and financial institutions.

Mumbai alone has three DRTs. According to statistics available, DRT I in Mumbai had 850 cases filed before it in the fiscal 2001.

DRT II had nearly 900 cases filed before it in the nine months of the 2001. The situation in the DRT III is not different, although exact figures were not immediately available.