The panel, set up by the finance ministry under a former solicitor general, will look into legal issues involved in an attempt to speed up the recovery of bad debts by banks, special secretary (banking) C M Vasudev told PTI here. "The committee would submit the report early next month," he said, adding that the current legal framework in the country was too complex and the banks were not in a position to sell mortgaged properties and securities easily as the ensuing court's cases prolong for years without any headway.

The committee will also find ways to expedite the process of bad loan recovery by banks and financial institutions. Though the exact nature of the report was not known, ministry sources indicated that it may suggest giving banks and financial institutions the power to sell mortgagedproperty without judicial intervention.

"The ministry is also concerned with the growing number of corporates resorting to the BIFR to avoid the sale of mortgaged properties by corporates," Vasudev said. Ministry sources said the committee was set-up as the existing rules regarding sale of mortgaged property and securities were archaic and needed immediate overhaul. The committee's report is expected to lend some new direction to give a free hand to banks and financial institutions to recover bad debts, sources said.

Already, a considerable amount of time was lost because of judicial intervention in the sale of mortgaged properties, they said, adding that the committee under the former solicitor general would give valuable suggestions to avoid court intervention on genuine cases of wilful defaults.