Q. Consider the following statements about Debt Recovery Tribunals (DRTs):
1.DRTs are quasi-judicial bodies established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
2.They handle loan default cases above ₹10 lakh, focusing on secured debts.
3.DRTs also hear Securitisation Applications (SAs) filed under the SARFAESI Act, 2002 by borrowers or aggrieved parties.
Which of the statements given above is/are correct?

[A] 1 and 2 only

[B] 1 and 3 only

[C] 2 and 3 only

[D] All of the above

Answer: B
Notes:

Explanation:

  • Statement 1: DRTs were established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 to expedite the recovery of debts owed to banks and financial institutions.
  • Statement 2: DRTs handle loan default cases where the amount involved is ₹20 lakh or more, not ₹10 lakh. The pecuniary limit was doubled from ₹10 lakh to ₹20 lakh to facilitate faster resolution and reduce the pendency of cases.
  • Statement 3: DRTs have the jurisdiction to hear Securitisation Applications (SAs) filed under the SARFAESI Act, 2002 by borrowers or aggrieved parties, as per the provisions of the Act.

Source– PIB

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