Under which Act were Debt Recovery Tribunals (DRTs) established?

Correct option is B

The correct answer is (B) The Recovery of Debts and Bankruptcy Act (RDB Act), 1993.

Explanation:
Debt Recovery Tribunals (DRTs) were established under the Recovery of Debts and Bankruptcy Act (RDB Act), 1993. This Act was enacted to provide a legal framework for the recovery of loans and debts. The primary objective of DRTs is to expedite the process of recovering defaulted loans by resolving disputes between creditors (like banks) and defaulters. The Act empowers the tribunals to take quick action for the recovery of debts.

Information Booster:

• RDB Act, 1993: The Act established Debt Recovery Tribunals (DRTs) to speed up the recovery of non-performing assets (NPAs) and reduce the backlog of cases in regular courts.

• DRTs are specialized tribunals for the recovery of debts related to financial institutions and banks, offering a time-bound process for loan recovery.

• The DRT process is aimed at simplifying the recovery procedures and ensuring faster resolution of cases related to debt recovery.

Additional Knowledge:

• The Securitization Act, 2002: The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) enables banks and financial institutions to seize the assets of defaulters without the intervention of courts, but it does not establish DRTs.

• The SARFAESI Act, 2002: This Act deals with the securitization and reconstruction of financial assets and also enables the enforcement of security interests by banks and financial institutions.

• The Consumer Protection Act, 2019: This Act aims to protect the rights of consumers and establish consumer courts, but it is unrelated to the functioning of Debt Recovery Tribunals.