Sunteți pe pagina 1din 24

Need of the study

Finance is the life- blood of the economic activities. As we know development of any country mainly depends upon banking system.One of the important services provided by the bank that is loan,It plays a very important role in economic growth. I decided and choose loan recovery topic with the aim of understanding and analysing the information related to the process of recycling of fund recoverd from borrowers because credit risk is attached to a bank.In the case of failure ofthe borrower in repayment, credit cycle gets upset, leaving the funds locked up.thus loan losses affect the bank s profitability. This study is also aimed at understanding the various recovery methods/strategies adopted by the bank to recover the loss.

OBJECTIVES OF THE STUDY

To understant and dignose the process/ working of loan administration of a bank viz, bank of baroda (more particulary, its KAMLA NAGAR branch).

To find out innovative loan recovery method followed by bank of baroda (KAMLA NAGAR Branch) To find the areas which are deficient and need improvement.

Research Methodology
To accomplish the objective ofthe study, the folowing Research Metholodogy has been used:

DATA COLLECTION:
Primary Data: Primary Data was collected by: 1. Observation and reading of files of the bank Like Bank of Baroda Annual Report, Reatil Banking by MacMIllan, The Genral of Indian Institute of Banking and Finance. 2. Personal interview I have prepared the questionnaries and copy is enclosed (Project in Process) Secondary Data: Secondary Data was collected from :

Various books Websites Newspapers

For attaining the different objective the sample size has been taken: Discussion with credit manager of the branch

Dicussion with head of recovery department of the regional office .

Statistical Tools Ratio Analysis

Prestation Tools Pie Chart Bar Diagram Graph

Duration of the study For the purpose of the analysis of data of period of one year (2010-11) has

been taken into consideration.

Introduction of finance

Finance is the study of funds and management. Its general areas are business finance, personal finance, and public finance. It also deals with the concepts of time, money, risk, and the interrelation between the given factors. It is basically focused on how the money is spent and budgeted. It is one of the most important aspects in handling business. Finance addresses the methods wherein business entities used their financial resources on a certain period of time. It is the application of a set of techniques used by organizations in managing their financial affairs. The income and expenditure are emphasized in finance and its differences can easily be indicated. Nowadays, loans have been packaged for resale. This means that the debt has been bought by an investor from the bank. These bonds are sold to investors by financial corporations who have exceeded beyond their expenditures. The investor can now collect all the interests and be sold again through a secondary market. Banks serve as facilitators to companies in the provision of credit and mutual funds. Investments are managed carefully under a financial risk management to control gambling chances of these financial assets. Financial instruments are also used to secure these assets on securities exchanges such as stock exchanges and bonds. A bank provokes the activities of both borrowers and lenders. Lenders pay deposits to banks on which it pays the interest rates. The central banks are the last resorts that handle the monetary funds. These banks affect the interest rates being charged such as an increase in the money supply will result to a decrease in the interest rates. Studying finance will lead you in wiser decisions making on your financial funds. It can help you identify risks and benefits if you are planning to put up your own business. Finance discipline requires you certain abilities and trainings which can be developed over a period of time. Finally, it will give you optimum control over your financial assets which will certainly help you in attaining a financially secured life.

ROLE OF BANKS IN THE ECONOMY


The Bank plays a various role in the economy:
1. Capital Formation: The significance of DFIs lies in their making available the means to utilize savings generated in the economy, thus helping in capital formation. Capital formation implies the diversion of the productive capacity of the economy to the making of capital goods which increases future productive capacity. The process of Capital Formation involves three distinct but interdependent activities, viz., saving financial intermediation and investment.
2. Support to the Capital Market:

The basic purpose of DFIs particularly in the context of a developing economy, is to accelerate the pace of economic development by increasing capital formation, inducing investors and entrepreneurs, sealing the leakages of material and human resources by careful allocation thereof, undertaking development activities, including promotion of industrial units to fill the gaps in the industrial structure and by ensuring that no healthy projects suffer for want of finance and/or technical services. 3. Rupee Loans: Rupee loans constitute more than 90 per cent of the total assistance sanctioned and disbursed. This speaks eloquently on DFIs obsession with term loans to the neglect of other forms of assistance which are equally important. Term loans unsupplemented by other forms of assistance had naturally put the borrowers, most of whom are small entrepreneurs, on to a heavy burden of debt-servicing. Since term finance is just one of the inputs but not everything for the entrepreneurs, they had to search for other sources and their abortive efforts to secure other forms of assistance led to sickness in industrial units in many cases. 4. Foreign Currency Loans: Foreign currency loans are meant for setting up of new industrial projects as also for expansion, diversification, modernization or renovation of existing units in cases where a portion of the loan was for financing import of equipment from abroad and/or technical know - how, in special cases.

5. Subscription to Debentures and Guarantees Regarding guarantees, it is well-known that when an entrepreneur purchases some machinery or fixed assets or capital goods on credit, the supplier usually asks him to furnish some guarantee to ensure payment of installments by the purchaser at regular intervals. In such a case, DFIs can act as guarantors for prompt of installments to the supplier of such machinery or capital under a scheme called Deferred Payments Guarantee. 6. Assistance to Backward Areas: Operations of DFIs in India have been primarily guided by priorities as spelt out in the Five-Year Plans. This is reflected in the lending portfolio and pattern of financial assistance of development financial institutions under different schemes of financing. Institutional finance to projects in backward areas is extended on concessional terms such as lower interest rate, longer moratorium period, extended repayment schedule and relaxed norms in respect of promoters contribution and debt-equity ratio. 7. Promotion of New Entrepreneurs: Development banks in India have also achieved a remarkable success in creating a new class of entrepreneurs and spreading the industrial culture to newer areas and weaker sections of the society. Special capital and seed Capital schemes have been introduced to provide equity type of assistance to new and technically skilled entrepreneurs who lack financial resources of their own even to provide promoters contribution in view of long-term benefits to the society from the emergence of a new class of entrepreneurs. 8. Impact on Corporate Culture: The project appraisal and follow-up of assisted projects by institutions through various instruments, such as project monitoring and report of nominee directors on the Boards of directors of assisted units, have been mutually rewarding. Through monitoring of assisted projects, the institutions have been able to better appreciate the problems faced by industrial units

Role of Banks and Financial Institutions in Indian Economy

Money lending in one form or the other has evolved along with the history of the mankind. Even in
the ancient times there are references to the moneylenders. Shakespeare also referred to Shylocks who made unreasonable demands in case the loans were not repaid in time along with interest. Indian history is also replete with the instances referring to indigenous money lenders, Sahukars and Zamindars involved in the business of money lending by mortgaging the landed property of the borrowers. Modern Day Role

Banking system and the Financial Institutions play very significant role in the economy. First and
foremost is in the form of catering to the need of credit for all the sections of society. The modern economies in the world have developed primarily by making best use of the credit availability in their systems. An efficient banking system must cater to the needs of high end investors by making available high amounts of capital for big projects in the industrial, infrastructure and service sectors. At the same time, the medium and small ventures must also have credit available to them for new investment and expansion of the existing units. Rural sector in a country like India can grow only if cheaper credit is available to the farmers for their short and medium term needs. Credit availability for infrastructure sector is also extremely important. The success of any financial system can be fathomed by finding out the availability of reliable and adequate credit for infrastructure projects. Fortunately, during the past about one decade there has been increased participation of the private sector in infrastructure projects. The banks and the financial institutions also cater to another important need of the society i.e. mopping up small savings at reasonable rates with several options. The common man has the option to park his savings under a few alternatives, including the small savings schemes introduced by the government from time to time and in bank deposits in the form of savings accounts, recurring deposits and time deposits. Another option is to invest in the stocks or mutual funds. Future

Till a few years ago, the government largely patro-nized the small savings schemes in which not

only the interest rates were higher, but the income tax rebates and incentives were also in plenty. The bank deposits, on the other hand, did not entail such benefits. As a result, the small savings

were the first choice of the investors. But for the last few years the trend has been reversed. The small savings, the bank deposits and the mutual funds have been brought at par for the purpose of incentives under the income tax. Moreover, the interest rates in the small savings schemes are no longer higher than those offered by the banks. Banks and financial intuitions have played major role in the economic development of the country and most of the credit- related schemes of the government to uplift the poorer and the under-privileged sections have been implemented through the banking sector. The role of the banks has been important, but it is going to be even more important in the future.

What are the different types of services offered by banks? Accepting deposit from public /others Lending money to public Transferring money from one place to another (remittances) Credit creation Acting as trustees Keeping valuable in safe custody Investment decisions and analysis Government business

Others types of lending and transaction

Bank of Baroda Indias International bank


Bank of Baroda (BOB) (Hindi: ) is the third largest bank in India, after the State Bank of India and the Punjab National Bank and ahead of ICICI Bank. BOB is ranked 763 in Forbes Global 2000 list. BOB has total assets in excess of Rs. 3.58 lakh crores, or Rs. 3,583 billion, a network of over 3,409 branches and offices, and about 1,657 ATMs. It plans to open 400 new branches in the coming year. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, credit cards and asset management. Its total business was Rs. 5,452 billion as of June 30.

As of August 2010, the bank has 78 branches abroad and by the end of FY11 this number should climb to 90. In 2010, BOB opened a branch in Auckland, New Zealand, and its tenth branch in the United Kingdom. The bank also plans to open five branches in Africa. Besides branches, BOB plans to open three outlets in the Persian Gulf region that will consist of ATMs with a couple of people. The Maharajah of Baroda, Sir Sayajirao Gaekwad III, founded the bank on 20 July 1908 in the princely state of Baroda, in Gujarat. The bank, along with 13 other major

commercial banks of India, was nationalized on 19 July 1969, by the government of India

International presence
Among the Bank of Barodas 85 overseas branches are ones in the worlds major financial centers (e.g., New York, London, Dubai, Hong Kong (which it has upgraded recently), Brussels and Singapore), as well as a number in other countries. The bank is engaged in retail banking via 17 branches of subsidiaries in Botswana, Guyana, Kenya, Tanzania, and Uganda. The Bank of Baroda also has a jointventure bank in Zambia with nine branches. The Bank of Baroda maintains representative offices in Malaysia, China, Thailand, and Australia. It plans to upgrade its offices in China and Malaysia shortly to a branch and joint-venture, respectively. The Bank of Baroda has received permission or in-principle approval from host country regulators to open new offices in Trinidad and Tobago and Ghana, where it seeks to establish joint ventures or subsidiaries. The bank has received Reserve Bank of India approval to open offices in The Maldives, and New Zealand. It is seeking approval for operations in Bahrain, South Africa, Kuwait, Mozambique, and Qatar, and is establishing offices in Canada, New Zealand, Sri Lanka, Bahrain, Saudi Arabia, and Russia. It also has plans to extend its existing operations in the United Kingdom, the United Arab Emirates, and Botswana. The slogan of Bank of Baroda is "India's International Bank".

Bank of Baroda financials 2012


Sales Rs. 24,695 crores Profits Rs. 4,241 crores Assets Rs. 3,58,397 crores

Bank of Baroda Loans


Bank of Baroda has the following bouquet of loan solutions for its customers diverse requirement:-

Meaning and Definition of Loan

A thing that is borrowed means a sum of money that is expected to be paid back with interest. A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount. The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent. The banks primary activity is to advance loans to the needy. Extension of credit is one of the major activities of the banks and financial institutions. Apart from raising resources through fresh deposits, borrowings and recycling of funds received back from borrowers constitute a major part of funding credit dispensation activity.

Neither a borrower, nor a lender be; for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.
William shakeshpeare.

However, credit risk is attached to the retail products of banks, which arises from the failure of the borrower in repayment. Here, the credit cycle gets upset, Leaving the funds locked up. Thus, these loan losses affect the banks profitability on a large scale. Though complete elimination of such losses is not possible, banks can always aim to keep the losses at a low level.

What are Non-Performing Assets?


All loan advances of banks are assets. The loan or lease, which is not meeting its stated interest or principal repayment of the secured debt to the designated lender, is called as Non-Performing Assets. The borrower has not paid any previously- agreed payments or the principal amount, making the loan account non-performing. The banks treated the accounts as non-performing if the borrower as not paid the installment or the principals for a period of 180 days. But the Central Banks policy change in 2004 required that banks classify the loan account as Non-Performing if the payment has not been made into the loan account for a period of 90 days. Even if credit facilities remain performing, the bank has to categories it as non-performing.

The policy of the Bank of Baroda for classifying banks loan assets is as under: NON-PERFOMING ASSETS (NPA): A Non - Performing is a loan or an advance where: 1) Interest and/or installment of principal remain overdue for a period more than 90 days in respect of a term loan. 2) The account remains out of orders (if the outstanding balance remains continuously in excess of the sanctioned limit /drawing power for more than 90 days) in respects of an overdraft/cash credit (OD/CC). 3) The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted 4) The installment of principal or interest thereon remains overdue for two crop seasons for short duration crops. 5) The installment of principal or interest thereon remains overdue for one crop season for long duration crops MANGEMENT OF Non-Performing Assets (NPAs) as emerged as one the major challenges facing banks Once an asset ceases to generate any income for a bank, whether in the form in the interest or principal repayment, it is termed as non-performing asset. As per prudential norms suggested by the RBI, a bank cannot book interest on a NPA on accrual basis.

Therefore, this has become what is called as critical performance area or banking sector as the level of NPA affects the profitability of bank.

Types of Non-Performing Assets:

Standard: bank receives the principal and interest repayment, systematically from the borrower. Another important aspect is that the arrears of the principal as well as the interest does not surpass more than 90 days on the closing of the financial year. Sub-standard: Asset which has remained as NPA for a period of less than or equal to 12 months. Doubtful: A doubtful asset is one which has remained as a NPA for a period exceeding 12 months. Loss: A loss asset is one where loss has been identified by the bank or by internal or external auditors or the RBI inspection. in Loss assets in realizable value of security available is less than 10% of balance outstanding/ dues.

Factors leading to the creation of Non-Performing Assets: NPLs arise due to many internal and external factors confronting the borrowers. Internal Factors are: Diversion of funds for expansion/diversification/modernization, taking new projects, helping/ promoting associate concerns, time/cost over- runs during the project implementation stage, business (product, marketing etc.) failure, inefficient management, strained labour relations, inappropriate technology/ technical problems, product obsolescence, etc. External Factors are: - Recession, nonpayment in other countries, inputs/ power shortage, price escalation, accidents and natural calamities etc.

Some main factors arise NPLs are: 1) Overall performance of the economy 2) Cyclicality of the businesses

3) Technological obsolescence 4) Managerial deficiencies to deal with the changing business environment. 5) Financial indiscipline and intentional defaults. The alarming growth of NPAs causes a serious stress on profitability. Banks can not afford to make more provisions nor can they stop lending. The maximum should be Lend and Recover. The bank has to lend judiciously and approach to recovery should be professional and innovative. The strategy of One size fits all cant be considered viable. The various recovery measures adopted by institutions (FIs) for reducing the level of NPAs banks and financial

Recovery Measures: Broadly speaking recovery measures can be classified into Non-legal measures Legal measures

Non-legal measures:
1. Reminder system: this is the cheapest mode of recovery by sending

2.

3.

4.

5.

reminders to borrowers before the loan installment fails due. With the migration of branches of banks to the core banking solution (CBS) and internet facility being available, reminder can be sent through e-mail. Visit to Borrowers business premise/ residence: this is a more dependence measure f recovery visits need to be properly planned. Involvement of staff at all levels is to be ensured. Costs involved in the recovery need to be kept to the minimum. Recovery Camp: to take maximum advantage, recovery camps should be organized in planned way i.e. in respect of agricultural advances during harvest season. During the camp, those who are very regular in loan repayment should be honored. This would send out a positive message across the people. Rehabilitation of Sick Companies: by rehabilitation a sick unit successfully, recovery of bank dues take place. But the success rate is very low i.e. less than 10%. However. Banks should continue to rehabilitate because, the cost of rehabilitation is lower than restarting a new unit on closure of the same. Debt Restructuring: with the global slow down and recession, more importance is attached to debt restructuring to enable the borrowers to fulfill debt obligation and without much difficulty. But its success depends upon both banks and borrowers. The borrowers should know that the debt

6.

7.

8.

9.

restructuring is a rare opportunity provide to them. Banks need to create a conducive environment for loan recovery through collective efforts. Loan compromise: compromise settlement should be considered as a last resort for recovery. It should be voluntary and calls for professional approach in preparing the compromise proposals for which each bank is given autonomy by Reserve Bank of India. Many banks have set up a set up a settlement advisory committee (SAC). Efforts should also be made not to encourage good borrowers to seek compromises. It should be case specific based on the ground realities. Rephasement/ Reschedulement: banks need to be empathetic incase of small advances and more particularly in respect of sincere and hardworking borrowers. Write-off: If it is going to be unremunerative either to file suit and/ or continuing the account in the banks books, it is advisable to go for waiver of legal action and /or write off dues. Recovery agents: recovery agents shall be appointed to recover the amounts lying in various NPA accounts. Banks must ensure that recovery agents adhere to codes under BCSBI, so that banks can promote good and fair banking practices based on ethical principles of integrity and transparency.

Legal Measures

Debt Recovery Tribunal: The tribunal was set up in 1993, as a result of the Recovery of Debts due to Banks and Financial Institutions Act. It was established to facilitate speedy adjudication of the cases and swift execution of verdicts. These tribunals are the quasi-judicial institutions set up to process the legal suits filed by banks against defaulting borrowers. The Tribunal can only take up matters having a value more than 10 lakh. Appeals filed against the proceedings initiated by secured creditors under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act can also be taken up by the Debt Recovery Tribunal. In the year 2003-04, they has disposed claims worth Rs.314 billion and recovered Rs. 79 billion. In the year 2007-08, as many 3728 cases amounting to Rs. 5819 crore were referred, out of which Rs. 3020 crore was recovered.

Importance of Management of NPAs:

A NPAs account not only reduced profitability of banks due to provisioning in the profit and loss account, but their carrying cost is also increased which results in excess and avoidable management attention. Apart from this, high level of NPAs also puts a strain on a bank net worth because, banks are under pressure to maintain a desired a level capital adequacy and in the absence of comfortable profit level, they eventually look towards their internal financial strength thereby slowly eroding the net worth. High NPAs will also raise corporate governance issued where every stake holder is keen to know the reasons of high level of NPAs.

Management of NPAs ------- Preventive Aspects:

Prevention is better than cure, so goes the age old maxim.

A. Pre-sanction Stage

A little care and prudence at the time of pre- sanction can helps us in filtering out possible problems later. The practicing bankers need to spend greater part of their time and energy at the stage. Pre-sanction appraisal must focus on the cash generation ability of the prospective client and asset. While risk taking is the essence of banking, it must also be realize that we deal with other peoples money i.e. depositors money and we have actually no right to take unknown risks. Risk and return are often stated to be directly proportional. Know Your Customer (KYC) is the heart and essence of healthy asset portfolio. Knowing your customer can even insulate us against noncontrollable risks.
B. Post- Sanction Stage

Once an asset is created with the disbursement of loan/credit, the responsibility for maintenance of the health of portfolio falls squarely on the shoulders of bankers. Banks have put in place in EARTH ALERT SYSTEM. Most of the danger signals manifests in the account. Scanning of account on day-to-day basis is the best sources of valuable information for prevention as well as corrective action. Practicing bankers need to closely monitor the activities like issuance of cheques to suppliers, payment through the account,

prompt servicing of interest, regular submission of stock statement and inspection of securities, analysis of financial data on regular basis, sporadic of seasonal request for adhoc/excess and inspection of book debt. Maintaining close rapport with borrowers, ensuring end use verification, eliciting information, site visit are important follow-up measures that has major impact on reduction of NPA. Further, a regular touch with national and international developments is a prerequisite in todays world of unpredictable changes. Newspaper, T.V, Internet is the prime sources of data. But data has to be scanned and converted into relevant information.

Innovations in recovery management:

Almost all banks use some package or software for generating information on accounts due for review, accounts where Letter of Acknowledgement (LADs) or Revival Letters are due, List of Potential NPAs. Some suggested steps/ innovations in Recovery Management are discussed as under:

A. Proactive Approach: if proactive action is taken n the initial stage of an

account turning NPAs. Loses can be minimized.


B. Regular follow-up: regular follow-up in respect of suit filed and decreed

accounts can yield unexpected results.


C. Sharing Success: practicing bankers should share success stories in the

field of NPA recoveries, the methods and modus operandi used. It can have only result- success and more success.
D. Strengthening of Asset Recovery Management Branches: ARMBs were

intended to be focal point of Recovery Strategy.


E. Team Work: All staff member should be involved in the recovery of NPAs.

F. Human Aspect of NPA Management: Skill and Competencies of employees

need to be developed. The Public Relation Skill (PR Skill), communication skills of practicing bankers need to be developed to have a decisive impact on borrowers.
G. Accountability Syndrome: The fear of accountability is hindering staff from

taking a genuine financial decision in time.


H. Departmental Approach: NPA Management should be accepted and

pursued as an organizational goal. Proactive culture should be developed in Legal Department of banks.
I.

Bankers- Borrower Relationship: A healthy Bankers Borrower Relationship should be ensured. Special Investigation Audit: It is also wise for the banks to carry out special investigative audit of all financial and business transactions.

J.

Important points related to recovery of loan:All Customers (including Customers who are late in paying or in default) must be treated with respect, dignity, courtesy and fairness in debt collection efforts. Bank of Baroda believes this is not only the right thing to do, but also the most effective. WE MUST READ, UNDERSTAND AND AGREE TO ABIDE BY THESE GUIDELINES PRIOR TO BEGINNING COLLECTIONS ON DEBTS OWED BY THE CUSTOMERS 1. Customers deserve to be treated with dignity. Customer Assistance Specialists should always remain professional during telephone conversations and visits. No Written or verbal threats, abuse or rudeness is permitted. Customer Assistance Specialists should use only acceptable business language, even if the other party does not. 2. Customer Assistance Specialists deserve to be treated with dignity. They may refer the customer to management, or end calls when a customer becomes abusive or threatening. Customers should be informed prior to termination of such calls. All calls where the customer becomes abusive or threatening should be appropriately documented.

3. All calls being made to the Customer(s) must be recorded as per requirements of the Code of Conduct stipulated by the Reserve Bank of India. No calls may be made by any of the Agents unless there is recording facility for the same, especially by Customer Assistance Specialists from their individual mobile phones unless they said call is absolutely necessitated for checking on the availability of the Customers or for directions to the location of the Customers 4. Customers are entitled to privacy. Privacy policies apply to all conversations with third parties, as stipulated in this document. The Customers must be informed that their call is being recorded. Unrecorded calls to Customers are to be avoided. 5. All collection activities should be consistent with the guidelines provided in this document and in compliance with the Code for collections of dues stipulated (from time to time) by the Reserve Bank of India. 6. Customers should be called only between 0700 Hrs and 1900 Hrs unless exceptional circumstances described in this Code warrant deviation from this timeframe. Under no circumstances, customer can be called beyond 2100hrs. 7. Customers should be called no more often than is reasonable in the context of the debt, and the conversations logged on the system and the convenience of the Customer(s) to talk, should be enquired at the beginning of each call. 8. Customer requests that calls/visits to place of work be stopped are to be honored if he/she provides a suitable alternate where he/she may be reached during collection working hours. Customers questions should be answered in full. They should be provided with information requested, given assistance and issues resolved. 9. Customer or third party requests for supervisor names or requests to speak with supervisor should always be honored. 10. Customer Assistance Specialist notes on the collection system should be clear, concise, accurate and free of editorial comments. All attempts, contacts, conversation and actions are to be noted on the collection system.

Why you may contact a customer


A customer is to be contacted for debt collection only under the following circumstances: When not contacting the Customer may lead to the imposition of an additional cost on the customer or may impact the customers credit history/rating e.g. customer spending pattern indicates that the customer may be about to breach his/her credit line; When the customer has not paid on payment date (including grace days) and this is likely to impact the customers credit history and/or is likely to cause a financial loss to Bank of Baroda.

When you may contact a customer


It has been Bank of Baroda experience in India that individuals with full-time employment routinely are awake by 06:00 Hrs in order to be at their jobs at the time required. Accordingly calls must normally be limited from 0700 Hrs to 1900 Hrs. A customer may be contacted beyond 1900hrs till 2100hrs on: 1. Phone, if customer has not been contactable within last 48hrs. 2. On personal visit, if the customer has been non contactable during last two visits. A customer may be contacted at a time when the call is not expected to inconvenience him/her. In addition, if a mobile number is called and the customer is driving, then the call may be discontinued, in the interest of safety. Calls either earlier or later than normal hours, while effective in contacting the customer, is also likely to be inconvenient to the customer and could be viewed as harassment. When attempts to contact the customer have resulted in information that the customer is normally only available outside these hours and no alternate telephone number is available to contact the customer. When due to nature of customers employment i.e. working in shifts e.g.: Call Centers, Hotels etc, he/ she is usually available outside these hours. Agents should visit customers by themselves only and not in a group. However, the agent can be accompanied by the agents Supervisor/ Manager for any assistance in handling the customer account

Where you may contact the customer


The first visit /contact with the customer should be at his place of residence/ mobile. However, other telephone numbers like employment may be used. When the Collection Unit is unable to contact the customer at his residence/ mobile, the customer may be contacted at his/her other address or number/through borrower or referee or guarantor. In addition automated systems that choose the best time and best number to attempt to contact the customer may be used.

Which language should we use in the interaction?


A Customer Assistance Specialist should try and use the language with which the customer is comfortable. The Customer Assistance Specialist must not attempt to force the customer to speak in English if he/she is not comfortable. This may be offensive to some customers. If the Customer Assistance Specialist is not comfortable with the language spoken by the customer, the account may be referred to another Customer Assistance Specialist or the conversation should be continued in English/alternate language explaining the reason to the customer. If the customer expresses his inability to understand, then the call must be referred to a supervisor.

Customer Assistance Specialist should use the formal mode of address in the language of choice of the customer. Customers deserve to be treated with dignity. Accordingly, Customer Assistance Specialists must be a professional. As the situation requires, they may also be assertive and firm. In any event, courtesy and respect are mandatory. Customer Assistance Specialists SHOULD NOT become abusive visibly irritated or demeans the customer in any fashion.

What mode of Address is to be used?

How often should the customer be called?


The purpose of a collection call is to bring to the customers notice the obligation to pay and to seek a commitment to pay on a specified date. Once a promise is elicited, a call may be made to serve as a reminder and for confirmation of payment.

Can the customers debt obligation be discussed with anybody else?


Bank of Baroda NA respects customer privacy. The customers debt/obligation may normally be discussed only with the customer and co borrower/supplementary cardholder or the co-signatory of the loan agreement, loan guarantor, and the employer in cases of corporate cards or corporate facilitated loans. As per the terms and conditions customer debt details can be discussed with Regulatory/Law enforcement agencies as well as third party service providers who are contracted with to provide debt collection and support services. Customer Assistance Specialists may always communicate with a third party about the customers debt when and to the extent doing so is necessary to enforce a decree obtained in a lawsuit against the customer. In addition in certain circumstances, as explained below, it may be necessary to discuss some parts of the past due obligation with related third parties. In certain cases the customer may specifically authorize us in writing to discuss the customers debt with a particular third party, such authorization should be recorded on the collection system as and when the customer provides it. In such a scenario, where a record of such permission is available on our collection system and the status card, we may leave a message /disclose /receive payment from such third party specifically authorized/instructed by the customer.

Precautions to be taken on visits


Residence
Customer Assistance Specialists should: Respect personal space maintain adequate distance; Not to unnecessarily call the Customer prior to or subsequent to the visit to the Customers residence from an individual mobiles phone unless they said call is necessitated for checking on the availability of the Customers or for directions to the location of the Customers residence or for follow up to the visit to the Customers residence.

Not enter the customer residence against his/her wishes or when they are told the customer is not at home; Not restrict the customer movement or restrain him/her from entering or leaving the house/room; Not remain in the customer house if he/she were to leave for any reason including to collect money from a bank/elsewhere; Respect the customer privacy do not embarrass the customer in the presence of his/her neighbors; Not make visits at the customer residence if the customer; If the customer is not present and only minors/elderly / infirm are present at the time of the visit, the Customer Assistance Specialist should end the visit with a request that the customer call back. He should not enter the house unless invited. He should not wait for the customer in the customer residence unless specifically asked to do so by the customer or family Leaving messages and contacting persons other than the customer at the telephone numbers/addresses provided by the borrower or made available to us as a result of trying to contact borrower Leaving messages and contacting the third party - For customers not available at the provided telephone numbers/ addresses.

Workplace
Customer Assistance Specialist should: Not visit the customer in the office unless: The customer has specifically requested the CAS to do so the customer mailing address is that of the workplace; Respect personal space; do not restrict the customer movement.

I have prepared the questionnaires but still many important part of process are to be completed, as the meeting with branch manager has not materialised bcoz of his busy schedule. So they will decide the time and the concluding part will be discussed with credit manager.
Issues to discuss with him/her 1.Before providing loan what are the terms and condition of your bank? 2. What are the format/procedures while filling the form by customer? 2. What are expectations of NPAs every year? 3. What is the recovery time given to customer to fulfill their promise? 4. After the NPAs what are the main effect in the profitability of he bank? 5. If in case customer does not paid the interest/installment in time then what would your action. 6. What are key recovery method / strategy adopted by the bank? 7. What is to be done if the customer requests us to stop visiting at the office? In such a case, the customer should be asked to provide an alternate location where the meeting can take place during the working hours of the Collections Unit. However, if the customer is not available at this location and attempts have been made to contact the customer, the customer may be contacted at his/her office again. 8. What is to be done if the Customer disputes the debt? The account must be referred to the Customer Service Unit for resolution of the dispute through the Supervisor. In the event, the customer disputes only a part of the debt, collection calling may continue for the balance/undisputed part of the debt. A Notice u/s 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) will be issued to the borrower, co-borrower and guarantor, with all the relevant details. The Notice will be sent to the mortgaged property address and other addresses provided on the application form.

S-ar putea să vă placă și