08-16-2017, 11:59 PM
RECOVERY MANAGEMENT IN BANKS
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Introduction
Banks were never so serious in their efforts to ensure
timely recovery and consequent reduction of NPAs as they
are today. It is important to remember that recovery
management, be of fresh loans or old loans, is central to
NPA management. This management process needs to start
at the loan initiating stage itself. Effective management of
recovery and NPA comprise two pronged strategy. First
relates to arresting of the defaults and creation of NPA
thereof and the second is to handling of loan delinquencies.
The tenets of financial sector reforms were revolutionary
which created a sense of urgency in the minds of staff of
bank and gave them a message that either they perform or
perish. The prudential norm has forced the bank to look into
the asset quality.
Why recovery management?
Bank deserves to be paid for their products and
services. The collection professionals in Recovery
Management Systems will work to see that.
Reasonable fees with no up-front costs. They get paid
only when it is collect.
Recovery Management Systems will design a
collection strategy to meet bank s objectives. Bank can
recover their debts without losing customers.
Monthly settlements with meaningful reporting. Status
updates on demand.
Extensive experience obtaining and collecting money
judgments in Ohio. Garnishments, liens, and levies
Recovery Management Systems will collect when legal
action is the only option.
Cutting edge skip-tracing tools and techniques
recovery Management Systems can work 1st, 2nd, and
3rd placements and even turn bank old judgments into
money.
What is NPA?
For a bank, an NPA or bad debt is usually a loan that is
not producing income. Earlier it was largely applicable to
businesses. But things have changed with banks widely
extending consumer loans (home, car, personal and
education, among others) and strict asset classification
norms.
If a borrower misses paying his equated monthly
installment (EMI) for 90 days, the loan is considered bad, or
an NPA. High NPAs are a sign of bad financial health. This
has wide-ranging ramifications for a bank, especially in the
stock market and money market.