DRT gets 108 loan recovery requests in nine months

KATHMANDU, APR 20

The Debt Recovery Tribunal (DRT) received 108 loan recovery requests during the first nine months of the current fiscal year with the highest number coming from finance companies followed by commercial and development banks, DRT data has revealed.

Of the 108 requests received by the DRT to recover loans from delinquent debtors, 43 were from finance companies, 38 from commercial banks and 27 from development banks. A majority of lo™an recovery requests came from troubled finance companies.

Liquidated Samjhana Finance asked the DRT to recover loans from 10 borrowers while another crisis-ridden finance company General Finance has requested it to collect unpaid debts from 10 borrowers. Likewise, Hama Merchant and Finance Company also has sought debt collection from 10 borrowers.

The DRT was formed to step in and collect unpaid debts when the collateral could not cover the full amount of the defaulted loan.

“As many troubled financial institutions have been found to have issued loans without adequate collateral, they have to approach the DRT to recover loans that become delinquent,” said a DRT official.

DRT Registrar Dev Kumar Shrestha said that there might have been more cases from troubled financial institution as they have to register unpaid loans within four years after the repayment deadline.

Gurkha Development Bank, which is also crisis-ridden, has sought recovery of loans related to real estate. It has sought recovery of Rs92.69 million from Srijana Land Developer and Housing and Rs77.11 million from Indriya Developer. Global IME Bank, which has registered a relatively higher number of cases, has sought loan recovery from manpower agencies.

Meanwhile, the number of cases registered at the DRT has also swelled during the first three quarters of this fiscal year. DRT records show that a total of 108 cases were registered during the review period while just 64 were registered during the same period in the previous fiscal year.

Shrestha said that the number of registrations during the last fiscal year was small since the government did not appoint the chief and other top officials of the DRT for a whole year. The head of the DRT was appointed on December 31, 2014. There are 317 cases pending at the DRT including 209 carried over from the previous fiscal year.

Source: The Kathmandu Post