Debt recovery & collections

In view of the presence scenario of economy has more and more companies are looking at developing and improving how they recover their debts.

When a borrower fails to repay the money to the Bank, what the Bank can do for recovering the loan is to file a civil suit earlier. We all know the issue of delay in rendering justice in traditional civil courts and with the inevitable delay, the Banks could not recover its dues effectively and it resulted in liquidity problems. Bank pays interest to the deposit holders; however, the Banks could not make money by using the deposits as the recovery gets delayed frequently. This led the government to appoint various committees for financial sector reforms. The concentration was on effective recovery by the Banks and Financial Institutions apart from other things.

Thus, a need has arisen to constitute special tribunals for recovery of debts by the Banks and Financial Institutions. The Government has enacted a law called The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 under which Debt Recovery Tribunals were constituted to recover dues by the specified Banks and Financial Institutions. The RDDBI Act, 1993 provides Banks and Financial Institutions to approach the Debt Recovery Tribunal by filing an application for recovering its due. Only when the amount of due qualifies under the Act, the Banks and Financial Institutions could approach the Debt Recovery Tribunals under RDDBI Act, 1993. When the Bank approaches the Tribunal for recovery, then, the Tribunal will look into the claim made by the Bank in accordance with the procedure prescribed under RDDBI Act, 1993 and finally passes an award. The award can be executed by the Bank.

Despite constituting special Tribunals like Debt Recovery Tribunals under RDDBI Act, 1993, the Banks could not recover its dues to the extent expected. This led to further reforms in the process and curtailing the delay in adjudication.

In furtherance of financial reforms and extending the object of RDDBI Act, 1993, the Government has enacted The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The SARFAESI Act, 2002 is to curtail the delay in the process of adjudication between the Banks and its borrowers. The question of recovery by the Banks and Financial Institutions will arise when the borrowers commit default in repaying thedebt. When there is default, then, the Banks will categorize the account as Non-performing Asset in accordance with the norms prescribed by the Reserve Bank of India.

Our years of experience in recovering debts for both large and small organizations mean that we are uniquely placed to provide you with the best advice possible. It is an unfortunate truth that even successful businesses can fail if they are unable to manage their cash flow. You need to be able to rely on lawyers who understand your business but who also understand how best to use the debt recovery tools available.

We recognize that the provision of a cost effective service is key to clients in this area. We look to help clients identify the "can't pay" from the "won't pay" situations. We can offer a range of pricing structures and focus on delivering a serviceof the highest quality with our long established and experienced team of qualified paralegals and state of the art case management systems.