• A banking law lawyer, also known as a banking and finance attorney, specializes in the legal aspects of the banking and financial industry. They provide legal advice and representation to banks, financial institutions, regulatory bodies, and sometimes individuals or businesses involved in financial transactions. Here’s a comprehensive overview of the services provided by banking law lawyers

Legislative framework for the Banking sector

1. Reserve Bank of India Act, 1934
2. Banking Regulation Act, 1949
3. Prevention of Money Laundering Act, 2002 (“PMLA”)
4. Foreign Exchange Management Act, 1999
5. Limitation Act, 1963
6. Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“DRT Act”)
7. SARFAESI Act, 2002

Debt recovery Tribunal (DRT)

Debt recovery Tribunal (DRT) is established to facilitate the debt recovery of banks & the financial institutions with their clients. DRT is established after passing the recovery of debts due to Banking & Financial Institutions Act (RDBBFI) ,1993. Presently about 33 DRTs are functioning at various part of country. It generally deals with dispute loans about 10 Lakh Rupees. Recently, in 2014, New 6 more DRTs has been established for loan related dispute settlement.

FEATURES & IMPORTANCE OF DRT LAW:

• Established under RDBBFI Act, 1993.
• Established to help the banks & financial institutions to recover their debts.
• Speedy disposal of cases.
• Central government has provided uniform procedural laws for the proceedings in DRT & DART.
• After amendment, allows Banks & financial institutions to file cases in DRT having jurisdiction over the area of bank branch.
• DRT orders can be appealed in the DART.

Applicability of the Act

The Debt Recovery Tribunals Act applies to the following entities.

• It applies to all over India except for State of Jammu and Kashmir.
• It applies where the amount of debt due is not less than Rs. 10,00,000/-.
• It applies when the original application for recovery of Debts is filed only by Banks and Financial Institutions.

Documents Required

Every application to be furnished by a paper book containing such as

• A statement is showing details of the debt due from a Respondent and the circumstances under which such debt has become due.
• Any documents relied upon by the applicant and those mentioned in the application.
• Details including crossed Bank Draft or Indian Postal Order representing the application fee.
• Index of the documents to be produced.

Note: Where the parties to the lawsuit or proceedings are to be produced by an agent with the documents authorising him to represent as such agent or Vakalatnama in case of an Advocate also be appended to the application.

Procedure for filing of application

The applicant should apply with the Registrar within whose jurisdiction the applicant is functioning as a bank or financial institution in the present.

An application should be presented in the prescribed format.

The application can be presented by the applicant or by his agent or by an authorised legal practitioner.

The application to be presented to the registrar of the tribunal within whose jurisdiction his case falls or can be sent through registered post addressed to the Registrar.

Procedure Before Filing a Case in DRT

The following procedures are to be followed before filing the case in debt recovery tribunal.

• Sell pledged goods after addressing particular notice to the lender.
• In the case of hypothecated goods, get possession of the assets, and sell them after addressing the due in the form of notice.
• In the case of LIC policies, handover such policies and designate the surrender value towards the loan account.
• Set off the credit balance in any current or savings, account and TDRs in the names of the Borrowers or Guarantors, before filing a suit.
• Proof of ownership or debt such as shares, debentures, NSC, Mutual Fund Securities should be realised and be adjusted against the outstanding.
• Secure the documents or securities are enforceable against borrowers/guarantors while handling files to advocates for requesting Recovery Application before the tribunal.
• Brief the advocate accurately by providing a detailed narrative or write-up and by examining in detail the conduct of the account, documents received up to the date, securities created and other relevant information relating to the account.
• Analysis of the draft application to verify the correctness of every fact and relevant details stated in the draft application
• After verifying the accuracy of the draft application, the branch has to forward the draft application to the concerned authority for approval along with the copy of the memorandum for legal action in the account and the copy of the narrative or write-up provided earlier to the advocate along with the list of documents.
• After obtaining permission from the Authority, the Branch should discuss with the advocate about the changes or observations made by the appropriate authority while according approval and finalise the Application for recovery of updated dues of the Bank.

Procedure at Filing the Case in DRT

The following procedures are to be followed at the time filing the case in debt recovery tribunal.

• The Recovery Application, in the prescribed format, should be submitted with the DRT within the specified time from the day of the appropriate authority mentioned for approval against the legal action.
• Recovery Application should contain the description of all relevant documents and securities charged to the Bank.
• While filing Recovery Application, Xerox copies of records are to be produced to the Advocates.
• Original Documents should be maintained with the Branch till DRT requires the same.
• Interim reliefs such as the injunction against properties, attachment before judgement, the appointment of Receiver, Recovery Certificate for admitted dues should be appealed as a rule.
• Account Extracts to be provided and certified as per the provisions of Bankers Books Evidence Act and be annexed to the Recovery Application.
• Penal Interest should not be compounded.
• Costs for preserving the securities before filing suit and during the pendency of the lawsuit claimed.

Execution of Recovery Certificate

The Presiding Officer finally grants Recovery Certificate and sends it to Recovery Officer (R.O.) for execution. On receipt of the Recovery certificate, the recovery officer can issue the notice to Certificate Debtors, giving 15 days for payment of the amount stated in the Recovery Certificate.

If the defendant neglects to pay the amount, Recovery Officer will proceed to recover the amount by any one or more of the methods, which are listed below:

• Attachment and sale of Movable or Immovable Property of the defendant.
• Arrest and Detention of the defaulter.
• Appointment of Receiver.

The closing of DRT Application after full recovery of bank dues, the application is closed by Recovery officer.