Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Efficacy of Debt Recovery Legislation:An Indian Experience


Affiliations
1 Gujarat National Law University, Gandhinagar 382426, Gujarat, India
2 Veer Narmad South Gujarat University, Surat 395007, Gujarat, India
     

   Subscribe/Renew Journal


An economy’s performance can be assessed with the disposal rate of its nonperforming assets. India has been struggling with them. Although measures have been taken to deal with their growing rate, no effective measure has been identified till now. The Parliament has enacted the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 and the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 to deal with debt recovery. The Enforcement of Security Interest and Recovery Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016 had made changes in the acts of 1993 and 2002 and other integrated acts. This Amendment Act was an effort to tackle the existing regulatory gap. This paper suggests the development of an exchange market for an effective resolution of such assets. By adopting the statistical analysis of the efficacy of Debt Recovery Tribunal and Act of 2002 in resolving the problem, it investigates the impact of the legislation on the recovery of debts.
Subscription Login to verify subscription
User
Notifications
Font Size

  • Bandopadhyay, Tamal (2018), How Bad are our Public Sector Banks? Here are Some Vital Stats, [Online] Available from: https://www.livemint.com/Opinion/nioD0s2ZNJSsXxh2Nges4N/How-bad-are-our-public-sector-banks-Here-are-some-vital-sta.html [Accessed 4th September 2018].

  • Bansal, Samarth (2016), Details of NPA Figures of Public, Private Sector Banks, [Online] Available from: http://www.thehindu.com/data/Details-of-NPA-figures-of-public-private-sector-banks/article16670548.ece [Accessed 6th September 2018].

  • Barge, A. (2012), NPA Management in Banks: An Indian Perspective, IBMRD's Journal of Management and Research, 1(1): 88-91.

  • Chakrabarti, M. (2015), The Role of Asset Reconstruction Companies (ARCs) In Non-Performing Assets (NPAs) Management In Indian Banking Sector: An Empirical Study, Abhinav International Monthly Refereed Journal of Research in Management and Technology, 4(5): 56-66.

  • Chatterjee, S., G. Shaikh, and B. Zaveri (2016), Watching India’s Insolvency Reforms: A New Dataset of Insolvency Cases, WP-2017-012, Indira Gandhi Institute of Development Research, Mumbai.

  • CUTS (2016), Regulatory Impact Assessment in Indian Financial Sector: Improving Debt Recovery. CUTS International.

  • Datta, P., B.S. Surya Prakash and R. Sane (2017), Understanding Judicial Delay at the Income Tax Appellate Tribunal in India (No. 17/208), Working Papers 17/208, National Institute of Public Finance and Policy.

  • Ganatra, R.M. (2016), Asset Reconstruction Companies in India at an Inflection Point, [Online] Available from: http://www.moneylife.in/article/asset-reconstruction-companies-in-india-at-an-inflection-point/48200.html [Accessed 3rd September 2018].

  • Li Fu-an (n.d.) On Disposal of Non-Performing Assets of the Banking Industry. [Online] Available from: https://www.nomurafoundation.or.jp/en/wordpress/wp-content/uploads/2014/09/20041214_Li_Fuan.pdf [Accessed 4th September 2018].

  • Prasad, G.B. and D. Veena (2011), NPAs Reduction Strategies for Commercial Banks in India, International Journal of Management and Business Studies, 1(3): 47-53.

  • Reserve Bank of India (2012), Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances, [Online] Available from: https://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=7357 [Accessed 4th September 2018].

  • Roy, S. and P. Regy (2017), Understanding Judicial Delays in Debt Tribunals, Working Paper 17/208, National Institute of Public Finance and Policy.

  • Sabnavis, M. (2017), Addressing NPAs of Banks: PARA- the Last Frontier, [Online] Available from: http://www.careratings.com/upload/NewsFiles/SplAnalysis/NPA per cent20resolution per cent20and per cent20PARA.pdf [Accessed 5th September 2018].


Abstract Views: 984

PDF Views: 0




  • Efficacy of Debt Recovery Legislation:An Indian Experience

Abstract Views: 984  |  PDF Views: 0

Authors

Hiteshkumar Thakkar
Gujarat National Law University, Gandhinagar 382426, Gujarat, India
Gaurang Rami
Veer Narmad South Gujarat University, Surat 395007, Gujarat, India
Pratik Parashar Sarmah
Gujarat National Law University, Gandhinagar 382426, Gujarat, India

Abstract


An economy’s performance can be assessed with the disposal rate of its nonperforming assets. India has been struggling with them. Although measures have been taken to deal with their growing rate, no effective measure has been identified till now. The Parliament has enacted the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 and the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 to deal with debt recovery. The Enforcement of Security Interest and Recovery Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016 had made changes in the acts of 1993 and 2002 and other integrated acts. This Amendment Act was an effort to tackle the existing regulatory gap. This paper suggests the development of an exchange market for an effective resolution of such assets. By adopting the statistical analysis of the efficacy of Debt Recovery Tribunal and Act of 2002 in resolving the problem, it investigates the impact of the legislation on the recovery of debts.

References





DOI: https://doi.org/10.21648/arthavij%2F2020%2Fv62%2Fi1%2F194691