NEW DELHI: Those accused of wilful default will face the prospect of being put on trial within 30 days of a bank determining that a borrower was not paying despite being able to, if a proposal being considered by a committee set up by the government to deal with high value loan defaults finds its way into the statute books.

In order to deal with such defaulters the finance ministry had set up a committee to suggest measures to deal with them. VK Bhasin, former secretary in the law ministry's legal department, is the advisor to the committee. "Some suggestions include, 'summary trials,'. The recommendations are being examined," said a person aware of the deliberations. Summary trial is essentially a fast track proceeding where a case is resolved in one or two sittings. However, no sentence of imprisonment for a term exceeding three months can be passed in a summary trial.

"These are meant to act as deterrent, and in cases where more action needs to be taken, regular trial procedure can be followed," said a finance ministry official, adding that the recommendations are still being debated.

Wiflul defaulters lose access to capital markets and cannot access more loans from a bank or financial institution as per current regulations. The lenders can also initiate criminal proceedings against willful defaulters, but there is no legal backing for speedy recovery of dues.

The committee, which also had representation from Indian Banks' Association (IBA), Debt Recovery Tribunals (DRTs) and RBI, is also examining suggestions to amend the Sarfaesi Act, under which banks can seize assets of borrowers, and RDDB Act (Recovery of Debts Due to Banks and Financial Institutions).

There are over 40,000 cases worth Rs 1.73 lakh crore pending before various courts and debt recovery tribunals."If these summary trials can include the large corporate defaulters, it will have an impact," said an executive director with a state run bank. The top 30 non-performing accounts of state run banks consist of 40.2 percent of their gross bad loans. Experts believe that wilful defaulters will not be deterred, unless the judicial machinery to deal with it is specialized and the trials of offences are expeditious.