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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.


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.

Observation and reading of files of the bank Like ‘Bank of Baroda Annual Report’. Statistical Tools • Ratio Analysis Prestation Tools • • • Pie Chart Bar Diagram Graph .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. 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 . ‘The Genral of Indian Institute of Banking and Finance’. ‘Reatil Banking by MacMIllan’. 2.

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

diversification. The process of Capital Formation involves three distinct but interdependent activities. Capital Formation: The significance of DFIs lies in their making available the means to utilize savings generated in the economy. undertaking development activities. . viz. Term loans unsupplemented by other forms of assistance had naturally put the borrowers. 3.ROLE OF BANKS IN THE ECONOMY The Bank plays a various role in the economy: 1. most of whom are small entrepreneurs. Support to the Capital Market: The basic purpose of DFIs particularly in the context of a developing economy. thus helping in capital formation. on to a heavy burden of debt-servicing. 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 . Foreign Currency Loans: Foreign currency loans are meant for setting up of new industrial projects as also for expansion. sealing the leakages of material and human resources by careful allocation thereof. 2. 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. in special cases. is to accelerate the pace of economic development by increasing capital formation. 4. Rupee Loans: Rupee loans constitute more than 90 per cent of the total assistance sanctioned and disbursed. Capital formation implies the diversion of the productive capacity of the economy to the making of capital goods which increases future productive inducing investors and entrepreneurs. 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. This speaks eloquently on DFI’s obsession with term loans to the neglect of other forms of assistance which are equally important. saving financial intermediation and investment..

7. In such a case. 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. 6. it is well-known that when an entrepreneur purchases some machinery or fixed assets or capital goods on credit. 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 promoter’s contribution in view of long-term benefits to the society from the emergence of a new class of entrepreneurs. Subscription to Debentures and Guarantees Regarding guarantees. 8. DFIs can act as guarantors for prompt of installments to the supplier of such machinery or capital under a scheme called ‘Deferred Payments Guarantee’. have been mutually rewarding. the institutions have been able to better appreciate the problems faced by industrial units .5. Through monitoring of assisted projects. extended repayment schedule and relaxed norms in respect of promoters’ contribution and debt-equity ratio. the supplier usually asks him to furnish some guarantee to ensure payment of installments by the purchaser at regular intervals. such as project monitoring and report of nominee directors on the Boards of directors of assisted units. 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. longer moratorium period. Impact on Corporate Culture: The project appraisal and follow-up of assisted projects by institutions through various instruments. Assistance to Backward Areas: Operations of DFI’s in India have been primarily guided by priorities as spelt out in the Five-Year Plans.

on the other hand. The success of any financial system can be fathomed by finding out the availability of reliable and adequate credit for infrastructure projects. Fortunately. The banks and the financial institutions also cater to another important need of the society i. mopping up small savings at reasonable rates with several options. At the same time. infrastructure and service sectors. The modern economies in the world have developed primarily by making best use of the credit availability in their systems. Even in the ancient times there are references to the moneylenders. The bank deposits. As a result. Sahukars and Zamindars involved in the business of money lending by mortgaging the landed property of the borrowers.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. did not entail such benefits. the medium and small ventures must also have credit available to them for new investment and expansion of the existing units. 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. First and foremost is in the form of catering to the need of credit for all the sections of society. Credit availability for infrastructure sector is also extremely important. The common man has the option to park his savings under a few alternatives. Future Till a few years ago. including the small savings schemes introduced by the government from time to time and in bank deposits in the form of savings accounts. during the past about one decade there has been increased participation of the private sector in infrastructure projects. 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. recurring deposits and time deposits. the small savings . Modern Day Role Banking system and the Financial Institutions play very significant role in the economy. the government largely patro-nized the small savings schemes in which not only the interest rates were higher. Another option is to invest in the stocks or mutual funds. 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.e. but the income tax rebates and incentives were also in plenty.

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

It plans to open 400 new branches in the coming year. after the State Bank of India and the Punjab National Bank and ahead of ICICI Bank. and its tenth branch in the United Kingdom.58 lakh crores. The Maharajah of Baroda. Besides branches. The bank also plans to open five branches in Africa. The bank. or Rs. BOB opened a branch in Auckland. BOB plans to open three outlets in the Persian Gulf region that will consist of ATMs with a couple of people. BOB is ranked 763 in Forbes Global 2000 list. credit cards and asset management. the bank has 78 branches abroad and by the end of FY11 this number should climb to 90. 3. BOB has total assets in excess of Rs. a network of over 3.409 branches and offices. and about 1. along with 13 other major .583 billion. In 2010. Its total business was Rs. As of August 2010. founded the bank on 20 July 1908 in the princely state of Baroda. 5.452 billion as of June 30. Sir Sayajirao Gaekwad III.657 ATMs. 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.♦ Others types of lending and transaction Bank of Baroda India’s International bank Bank of Baroda (BOB) (Hindi: बैक ऑफ बडौदा) is the third largest bank in India. New Zealand. in Gujarat. 3.

Hong Kong (which it has upgraded recently). and New Zealand. Thailand. Bahrain. 24. The slogan of Bank of Baroda is "India's International Bank". New Zealand. the United Arab Emirates.commercial banks of India. Bank of Baroda financials 2012 • • • Sales Rs.695 crores Profits Rs. Sri Lanka. by the government of India International presence Among the Bank of Baroda’s 85 overseas branches are ones in the world’s major financial centers (e. 3. respectively. Saudi Arabia. New York.241 crores Assets Rs. The bank is engaged in retail banking via 17 branches of subsidiaries in Botswana.. It is seeking approval for operations in Bahrain. The Bank of Baroda maintains representative offices in Malaysia. Kuwait. South Africa. Guyana. It plans to upgrade its offices in China and Malaysia shortly to a branch and joint-venture. and Russia. was nationalized on 19 July 1969.58. where it seeks to establish joint ventures or subsidiaries. and Botswana. Brussels and Singapore). The Bank of Baroda also has a jointventure bank in Zambia with nine branches. and Australia.g. Mozambique. and Qatar. and Uganda. China. Dubai. 4.397 crores Bank of Baroda Loans Bank of Baroda has the following bouquet of loan solutions for its customer’s diverse requirement:- Meaning and Definition of Loan . London. as well as a number in other countries. The bank has received Reserve Bank of India approval to open offices in The Maldives. Tanzania. 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. and is establishing offices in Canada. Kenya. It also has plans to extend its existing operations in the United Kingdom.

or partial repayments. credit risk is attached to the retail products of banks. Thus. called the principal.“A thing that is borrowed means a sum of money that is expected to be paid back with interest. The loan is generally provided at a cost. borrowings and recycling of funds received back from borrowers constitute a major part of funding credit dispensation activity. each of these obligations and restrictions is enforced by contract. . the money is paid back in regular installments. each installment is the same amount. in practice any material object might be lent. between the lender and the borrower. Apart from raising resources through fresh deposits. Here.” William shakeshpeare. a loan entails the redistribution of financial assets over time. for loan oft loses both itself and friend. The bank’s primary activity is to advance loans to the needy. referred to as interest on the debt.” A loan is a type of debt. and is obligated to pay back or repay an equal amount of money to the lender at a later time. nor a lender be. Though complete elimination of such losses is not possible. in an annuity. Typically. In a legal loan. However. banks can always aim to keep the losses at a low level. the borrower initially receives or borrows an amount of money. Extension of credit is one of the major activities of the banks and financial institutions. which arises from the failure of the borrower in repayment. and borrowing dulls the edge of husbandry. Although this article focuses on monetary loans. Like all debt instruments. which provides an incentive for the lender to engage in the loan. In a loan. “Neither a borrower. which can also place the borrower under additional restrictions known as loan covenants. the credit cycle gets upset. from the lender. these loan losses affect the bank’s profitability on a large scale. Leaving the funds locked up.

The loan or lease. 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. whether in the form in the interest or principal repayment. which is not meeting its stated interest or principal repayment of the secured debt to the designated lender. The borrower has not paid any previously.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. it is termed as non-performing asset. As per prudential norms suggested by the RBI. 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). a bank cannot book interest on a NPA on accrual basis.agreed payments or the principal amount. .  The policy of the Bank of Baroda for classifying bank’s loan assets is as under: NON-PERFOMING ASSETS (NPA): A Non . making the loan account non-performing. the bank has to categories it as non-performing. But the Central Bank’s 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. is called as Non-Performing Assets. Even if credit facilities remain 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.What are Non-Performing Assets? All loan advances of banks are assets. 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.

Loss: A loss asset is one where loss has been identified by the bank or by internal or external auditors or the RBI inspection.) failure. inputs/ power shortage. inappropriate technology/ technical problems. marketing etc. product obsolescence. Doubtful: A doubtful asset is one which has remained as a NPA for a period exceeding 12 months. • • • Factors leading to the creation of Non-Performing Assets: NPLs arise due to many internal and external factors confronting the borrowers. Types of Non-Performing Assets: • Standard: bank receives the principal and interest repayment.runs during the project implementation stage. time/cost over. 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. inefficient management.  Some main factors arise NPLs are: 1) Overall performance of the economy 2) Cyclicality of the businesses . Internal Factors are: Diversion of funds for expansion/diversification/modernization. strained labour relations. Sub-standard: Asset which has remained as NPA for a period of less than or equal to 12 months.  External Factors are: . helping/ promoting associate concerns.Therefore. price escalation. accidents and natural calamities etc. taking new projects. in Loss assets in realizable value of security available is less than 10% of balance outstanding/ dues. nonpayment in other countries. etc. business (product.Recession. this has become what is called as “critical performance area” or banking sector as the level of NPA affects the profitability of bank.

5. Banks can not afford to make more provisions nor can they stop lending. 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. This would send out a positive message across the people. Banks should continue to rehabilitate because. Visit to Borrower’s 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. reminder can be sent through e-mail. 4. Debt Restructuring: with the global slow down and recession. 3. With the migration of branches of banks to the core banking solution (CBS) and internet facility being available. The borrowers should know that the debt . recovery camps should be organized in planned way i. the cost of rehabilitation is lower than restarting a new unit on closure of the same. During the camp.3) Technological obsolescence 4) Managerial deficiencies to deal with the changing business environment. Costs involved in the recovery need to be kept to the minimum. However. recovery of bank dues take place. The alarming growth of NPAs causes a serious stress on profitability. those who are very regular in loan repayment should be honored.e. in respect of agricultural advances during harvest season. The strategy of “One size fits all” can’t be considered viable. The bank has to lend judiciously and approach to recovery should be professional and innovative. less than 10%. The maximum should be “Lend and Recover”. reminders to borrowers before the loan installment fails due. But the success rate is very low i.e. Recovery Camp: to take maximum advantage. 5) Financial indiscipline and intentional defaults. Reminder system: this is the cheapest mode of recovery by sending 2. more importance is attached to debt restructuring to enable the borrowers to fulfill debt obligation and without much difficulty. Rehabilitation of Sick Companies: by rehabilitation a sick unit successfully. But its success depends upon both banks and borrowers.

6. These tribunals are the quasi-judicial institutions set up to process the legal suits filed by banks against defaulting borrowers. 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. Importance of Management of NPAs: . Banks must ensure that recovery agents adhere to codes under BCSBI. Write-off: If it is going to be unremunerative either to file suit and/ or continuing the account in the bank’s books. Efforts should also be made not to encourage good borrowers to seek compromises. it is advisable to go for waiver of legal action and /or write off dues. Banks need to create a conducive environment for loan recovery through collective efforts. as many 3728 cases amounting to Rs. In the year 2007-08. It should be case specific based on the ground realities.314 billion and recovered Rs. 7. 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. Rephasement/ Reschedulement: banks need to be empathetic incase of small advances and more particularly in respect of sincere and hardworking borrowers. The Tribunal can only take up matters having a value more than 10 lakh. 5819 crore were referred. Loan compromise: compromise settlement should be considered as a last resort for recovery. restructuring is a rare opportunity provide to them. out of which Rs. so that banks can promote good and fair banking practices based on ethical principles of integrity and transparency. Many banks have set up a set up a settlement advisory committee (SAC). 3020 crore was recovered. as a result of the Recovery of Debts due to Banks and Financial Institutions Act. In the year 2003-04. 8. It was established to facilitate speedy adjudication of the cases and swift execution of verdicts. 9. Recovery agents: recovery agents shall be appointed to recover the amounts lying in various NPA accounts. they has disposed claims worth Rs. 79 billion. Legal Measures Debt Recovery Tribunal: The tribunal was set up in 1993.

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. Apart from this. The practicing bankers need to spend greater part of their time and energy at the stage.sanction can helps us in filtering out possible problems later. Practicing bankers need to closely monitor the activities like issuance of cheques to suppliers. High NPAs will also raise corporate governance issued where every stake holder is keen to know the reasons of high level of NPAs. While risk taking is the essence of banking. depositor’s money and we have actually no right to take unknown risks. Most of the danger signals manifests in the account. the responsibility for maintenance of the health of portfolio falls squarely on the shoulders of bankers. but their carrying cost is also increased which results in excess and avoidable management attention. Pre-sanction Stage A little care and prudence at the time of pre. Knowing your customer can even insulate us against noncontrollable risks. . high level of NPAs also puts a strain on a bank net worth because.e.A NPAs account not only reduced profitability of banks due to provisioning in the profit and loss account. it must also be realize that we deal with other people’s money i. Post. Risk and return are often stated to be directly proportional. Management of NPAs ------. so goes the age –old maxim.Preventive Aspects: Prevention is better than cure.Sanction Stage Once an asset is created with the disbursement of loan/credit. Banks have put in place in “EARTH ALERT SYSTEM”. B. A. Know Your Customer (KYC) is the heart and essence of healthy asset portfolio. payment through the account. Pre-sanction appraisal must focus on the cash generation ability of the prospective client and asset. Scanning of account on day-to-day basis is the best sources of valuable information for prevention as well as corrective action.

sporadic of seasonal request for adhoc/excess and inspection of book debt. accounts where Letter of Acknowledgement (LADs) or Revival Letters are due. But data has to be scanned and converted into relevant information. Further. Loses can be minimized. T. B. Strengthening of Asset Recovery Management Branches: ARMBs were intended to be focal point of Recovery Strategy. Newspaper. eliciting information.prompt servicing of interest. D. Sharing Success: practicing bankers should share success stories in the field of NPA recoveries. site visit are important follow-up measures that has major impact on reduction of NPA. C. Regular follow-up: regular follow-up in respect of suit filed and decreed accounts can yield unexpected results. . Innovations in recovery management: Almost all banks use some package or software for generating information on accounts due for review. Proactive Approach: if proactive action is taken n the initial stage of an account turning NPAs. regular submission of stock statement and inspection of securities.V. a regular touch with national and international developments is a prerequisite in today’s world of unpredictable changes. Internet is the prime sources of data. Some suggested steps/ innovations in Recovery Management are discussed as under: A. Maintaining close rapport with borrowers. analysis of financial data on regular basis. Team Work: All staff member should be involved in the recovery of NPAs.success and more success. ensuring end use verification. the methods and modus operandi used. It can have only result. List of Potential NPAs. E.

I. communication skills of practicing bankers need to be developed to have a decisive impact on borrowers. The Public Relation Skill (PR Skill). Customers should be informed prior to termination of such calls. dignity. Accountability Syndrome: The fear of accountability is hindering staff from taking a genuine financial decision in time. H. Bankers. No Written or verbal threats. or end calls when a customer becomes abusive or threatening. WE MUST READ. Human Aspect of NPA Management: Skill and Competencies of employees need to be developed. Customers deserve to be treated with dignity. .Borrower Relationship: A healthy Bankers Borrower Relationship should be ensured. abuse or rudeness is permitted. Important points related to recovery of loan:All Customers (including Customers who are late in paying or in default) must be treated with respect. courtesy and fairness in debt collection efforts. Special Investigation Audit: It is also wise for the banks to carry out special investigative audit of all financial and business transactions. They may refer the customer to management. Proactive culture should be developed in Legal Department of banks. G. Customer Assistance Specialists should always remain professional during telephone conversations and visits. Customer Assistance Specialists should use only acceptable business language. Bank of Baroda believes this is not only the right thing to do. Departmental Approach: NPA Management should be accepted and pursued as an organizational goal.F. J. All calls where the customer becomes abusive or threatening should be appropriately documented. 2. Customer Assistance Specialists deserve to be treated with dignity. even if the other party does not. but also the most effective. UNDERSTAND AND AGREE TO ABIDE BY THESE GUIDELINES PRIOR TO BEGINNING COLLECTIONS ON DEBTS OWED BY THE CUSTOMERS 1.

Unrecorded calls to Customers are to be avoided. The Customers must be informed that their call is being recorded. No calls may be made by any of the Agents unless there is recording facility for the same. Customers are entitled to privacy. contacts. Customer Assistance Specialist notes on the collection system should be clear. should be enquired at the beginning of each call. concise. 5. customer can be called beyond 2100hrs. and the conversations logged on the system and the convenience of the Customer(s) to talk. They should be provided with information requested. 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 customer’s credit history/rating – e.3. as stipulated in this document. Customer’s questions should be answered in full. accurate and free of editorial comments. Under no circumstances. 10. Privacy policies apply to all conversations with third parties. 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. 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. 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. • When the customer has not paid on payment date (including grace days) and this is likely to impact the customer’s credit history and/or is likely to cause a financial loss to Bank of Baroda. . 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. 6. given assistance and issues resolved. All attempts. 7. conversation and actions are to be noted on the collection system. Customers should be called only between 0700 Hrs and 1900 Hrs unless exceptional circumstances described in this Code warrant deviation from this timeframe. 9. Customer or third party requests for supervisor names or requests to speak with supervisor should always be honored. Customers should be called no more often than is reasonable in the context of the debt. customer spending pattern indicates that the customer may be about to breach his/her credit line.g. 8.

2. while effective in contacting the customer. other telephone numbers like employment may be used.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. In addition. . However. If the customer expresses his inability to understand. If the Customer Assistance Specialist is not comfortable with the language spoken by the customer.: Call Centers. 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. This may be offensive to some customers. Accordingly calls must normally be limited from 0700 Hrs to 1900 Hrs. in the interest of safety. A customer may be contacted beyond 1900hrs till 2100hrs on: 1. if a mobile number is called and the customer is driving. then the call must be referred to a supervisor. is also likely to be inconvenient to the customer and could be viewed as harassment. The Customer Assistance Specialist must not attempt to force the customer to speak in English if he/she is not comfortable. the customer may be contacted at his/her other address or number/through borrower or referee or guarantor. On personal visit. 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. 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. A customer may be contacted at a time when the call is not expected to inconvenience him/her.g. Hotels etc. if the customer has been non contactable during last two visits. When the Collection Unit is unable to contact the customer at his residence/ mobile. Agents should visit customers by themselves only and not in a group.  Which language should we use in the interaction? A Customer Assistance Specialist should try and use the language with which the customer is comfortable. he/ she is usually available outside these hours. However. In addition automated systems that choose the best time and best number to attempt to contact the customer may be used.e. Calls either earlier or later than normal hours. then the call may be discontinued. working in shifts e. When due to nature of customer’s employment i. if customer has not been contactable within last 48hrs. Phone.

Customer Assistance Specialist should use the formal mode of address in the language of choice of the customer. Accordingly. they may also be assertive and firm. In certain cases the customer may specifically authorize us in writing to discuss the customers debt with a particular third party.  Can the customer’s debt obligation be discussed with anybody else? Bank of Baroda NA respects customer privacy.  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. Precautions to be taken on visits  Residence Customer Assistance Specialists should: ○ Respect personal space – maintain adequate distance. Customer Assistance Specialists must be a professional. As the situation requires. In such a scenario. ○ 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. Customer Assistance Specialists may always communicate with a third party about the customer’s debt when and to the extent doing so is necessary to enforce a decree obtained in a lawsuit against the customer. where a record of such permission is available on our collection system and the status card. it may be necessary to discuss some parts of the past due obligation with related third parties. The customer’s 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. such authorization should be recorded on the collection system as and when the customer provides it. Customers deserve to be treated with dignity. In any event. In addition in certain circumstances. a call may be made to serve as a reminder and for confirmation of payment. we may leave a message /disclose /receive payment from such third party specifically authorized/instructed by the customer. and the employer in cases of corporate cards or corporate facilitated loans. as explained below. Customer Assistance Specialists SHOULD NOT become abusive visibly irritated or demeans the customer in any fashion. Once a promise is elicited. courtesy and respect are mandatory. . 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.

For customers not available at the provided telephone numbers/ addresses. ○ Not restrict the customer movement or restrain him/her from entering or leaving the house/room. ○ Respect the customer privacy – do not embarrass the customer in the presence of his/her neighbors. 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 . ○ Respect personal space. do not restrict the customer movement. ○ 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. ○ Not remain in the customer house if he/she were to leave for any reason including to collect money from a bank/elsewhere.  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. . ○ Not make visits at the customer residence if the customer.Not enter the customer residence against his/her wishes or when they are told the customer is not at home. He should not enter the house unless invited.

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