The failure to control loan delinquency, which often leads to default, is probably the largest single downfall of institutions that provide credit to entrepreneurs; the risk of delinquency and default must be continually addressed.
Due to the rising trend in the bank’s non-performing loan (NPL) portfolio, the management has been periodically reviewing its policy and strategy to arrest the growing trend and ensure maximum recoveries in NPLs. After the bank started its operations in the year 1991, the infection in loan portfolio grew and an M&R Cell was established which was subsequently named as Asset Management Division and is presently named as Remedial Risk Management, Collection & Recovery Division (RRMC&RD).
RRMC&RD forte is providing innovative concept and product superiority in Recovery of NPL accounts which is manned by highly qualified team to ensure that the recovery of Non performing assets is not slackened/compromised and that the efforts at improving the profitability and service standards are maintained.
Mission Statement
Early recovery and settlement of non performing/stuck up loans through vigorous efforts
Strengthening of legal infrastructure and ensuring international best practices in banking industry
The Key features include
1. The following changes have been brought under the umbrella of restructured Division.
- Collection & Recovery Department, headed by Manager, Collection & Recovery.
- Litigation & Recovery Department headed by Manager, Litigation and Recovery.
- A Mobile Recovery Task Force consisting of Manager, Member and
Tehsildar/Assistant Collector has been vested with the powers to recover over-dues
under Land & Revenue Act 1967. He is on deputation from Provincial
Revenue Department.
- For effective recovery of Non Performing Loans, a recovery team has been
placed including Team Leaders at regional levels and Collection & Recovery Officers
at Branch level to supervise the entire assigned delinquent loan accounts with the
coordination of Branch Managers for the purpose of collection and recovery in an
effective manner, by strategic planning/Deployment of available resources,
guiding the collection & recovery team to arrest/reduce infected advances,
hence improving health of the portfolio and contributing to the profitability
of the Branches/Bank.
- Deployment of Centralized Management Information System (MIS) which led to
timely and Accurate information to Branches regarding overdue and NPL
statement enabling the staff's ability to take immediate action in delinquency management.
- Segmentation of clients based on repayment behaviors. Targeted and rigorous
past due collection efforts were implemented based on segmentation.
- Clearly defined roles and responsibilities, task of tacking delinquency delegated
to all levels of Organization, staff incentive system established.
Most of the studies highlights that in Asia Pacific Region substantial amount of banks assets
are either impaired or distress/bad debts. Remedial Management & Collection Recovery
Division plays a vital role in ensuring the ongoing viability and profitability of the bank by
recovering bad debts and ensuring that the present portfolio is behaving normally.
3. Remedial Risk Management Collection & Recovery Division liaisons closely with Credit
Division as ongoing feed back on performance of various segments of the portfolio is critical
for fine tuning/amendment of underwriting credit initiation criteria.
4. One of the primary responsibilities of Remedial Risk Management Collection & Recovery
Division is to develop performance, monitoring and evaluation criteria for Lawyers to
optimize the litigation strategy, Co-ordinate with NAB for high balance and political cases.
5. RRMC&RD has also taken number of critical steps for the capacity building and hiring of
the staff to move towards a highly specialized human resource base. RRMC&RD
imparts highly specialized training program to staff. The staff is being supported by
up-to-date technological solutions and provided with pleasant and conducive working
environment.
6. As part of action plan and recovery of strategy, the Bank’s BoD has conferred powers
upon settlement committees at different levels, which is used as major tool by taking
quick and timely decisions to effect recovery by offering out of court settlement to NPL
customers.
7. RRMC&RD will co-ordinate with IT for the automation of most of the processes and
MIS requirement in order to bring more effectiveness and cost control in the division.
Staff Members of RRMC & RD
BoK Recovery Task Force at Regions & Branches |
