LoansFinancial Glossary
Debt Recovery Tribunal (DRT)
Definition
A specialized tribunal established under the Recovery of Debts and Bankruptcy Act for banks and financial institutions to recover outstanding loans exceeding Rs 20 lakh. DRTs can issue recovery certificates, attach borrower assets, and auction properties to recover dues. Appeals go to the Debt Recovery Appellate Tribunal (DRAT).
Why It Matters
DRT proceedings are relevant if you default on a bank loan above Rs 20 lakh. The process is faster than civil courts but can still take 2-4 years. Banks can pursue recovery through DRT, SARFAESI (for secured loans), or IBC (for corporate insolvency). Understanding these mechanisms helps borrowers negotiate settlements before matters escalate to asset seizure.