Industry Odisha Bureau, Oct 02: ARCs want government help to speed up recovery through DRTs. It proposes two-month limits on interim stays and digital evidence. Its own data shows ₹2.30 lakh crore recovered via DRTs and SARFAESI in 2021-25.
India’s debt recovery laws are not short of power. The ARC industry says the problem lies in speed. The Association of ARCs in India has sought government help to speed up recovery. Its focus is Debt Recovery Tribunals (DRTs) and the SARFAESI mechanism. Its headline proposal targets interim stays that pause recovery proceedings.
A Two-Month Clock on Stays
An interim stay temporarily halts recovery action while a dispute is heard. The association wants such stays to lapse automatically after two months. Tribunals could still extend them by specific order. It also wants DRTs to avoid granting stays without hearing both sides. Secured creditors, it says, should receive prior notice. Before hearing an appeal, it wants appropriate pre-deposit conditions imposed.
These are proposals, not current law. Stays can protect borrowers with genuine grievances. The industry’s concern is how long they run.
Tribunal Capacity Matters
Capacity is the second strand. The association wants DRT vacancies filled within 15 days of arising. An empty bench can slow cases regardless of legal powers. The proposal treats manpower as part of recovery, not an afterthought. It places tribunal staffing at the centre of bad loan recovery.
Recovery Goes Digital
The third strand is technology. The ARC body seeks greater use of electronic services in litigation. Greater e-services could also reduce dependence on physical filings. It wants DRTs allowed to rely on authenticated National E-Governance Services Ltd (NeSL) records. These would serve as evidence of debt and default. Verified digital records could reduce arguments over documentation. They would support a case, not automatically prove liability. The group has also proposed penalties for frivolous litigation.
The Numbers Behind the Push
The push comes with numbers attached. DRT and SARFAESI mechanisms helped banks recover ₹2.30 lakh crore in 2021-25. That is according to data compiled by the association. The Insolvency and Bankruptcy Code (IBC) recovered ₹2.28 lakh crore in the same period. The figures show both channels recovering substantial sums. They do not show which works better. Absolute amounts reveal nothing about case volumes, timelines or recovery rates.
More Than an Auction Tool
The SARFAESI Act dates from 2002. It lets banks and financial institutions take possession of collateral and auction it. This can happen without judicial intervention, to recover bad loans.
Hari Hara Mishra, the association’s chief executive, argues it is more than a recovery tool. The law, he noted, envisaged specialised workout units called ARCs. It created security receipts to help securitise stressed assets. It later set up a framework for CERSAI, a database of mortgaged property across states. At 25, Mishra said, SARFAESI could contribute much more with the right direction.
Execution Is the Real Test
India already has several tools to recover bad loans. The ARC proposals mostly target how quickly existing tools work. Whether the government acts on them remains to be seen. The real question is no longer legal power, but execution speed.
