Why Bank's lacking in NPA Recovery- How to ...
Among all the Banking operations, the most tedious and risky one that a Bank Officer has to face is the recovery of 'NPA Loans' or 'Written of Loans' also nomenclatures as AUCA (Advances under collection account).
Keeping in view the nature of job, State Bank of India established a super-specialized vertical directly under the control of one DMD. The lowest operational wings are the SAMB (Stressed Assets Management Branch) and the SARC (Stressed Assets Recovery Branch). The SAMB is dedicated for taking hard recovery measures against the High-value loans (presently Rs.10 crore and more) and the other loans are taken care in the SARC. The SAMB is headed by a DGM, while SARC is headed by an AGM. Besides, a dedicated Law Officer is made available for anytime consultation on day to day complexities of legal matters to the Head or Operating Officers in the SAMB or SARC.
The structure and culture of these branches differ from that of the remaining branches, so far as the nature of their object is concerned.
Whereas, the other Branches are designed to promote the Business Activities by providing a dedicated customer service and to be friendly with the customers of the Bank to the extent to act on the principle "Customer is always right", the SAMB or SARC are dealing with chronic defaulters of the Bank and are to take hard-recovery measures like filing of recovery / insolvency suits, declaring the defaulters and non-cooperative borrowers, willful defaulters, arranging for Special or forensic audit, issuing the Demand Notice under section 13(2) of the Sarfaesi Act or adjudicating their grievances received under section 13(3-A) of the Sarfaesi Act or taking symbolic possession or physical possession of the mortgaged assets belonging to firm, Company, its promoters or even third party guarantors (TPG) in the NPA accounts and to putting these assets on sale after taking their symbolic possession or the physical possession.
This work is not so simple, as this involves legal complexities. There are many categories of non-performing assets. We have to make properly classify the NPA accounts from the recovery and write off angle. RBI has issued prudential guidelines for Banks in the name of Prudential Norms. The Officers of the SAMB or SARC are to bear the pressure from two fronts; one from their Seniors - who are pressing for the hard actions, which are full of personal and bodily risk of the SAM Officers, as well. They are pressed to take physical possession at the earliest and to sell the properties, by any means. At times, the Top Officers do not understand the complexity of law or practical issues, because they are not from the field or have never worked in the SAM Branch at Desk-root level , but themselves are under pressure of their bosses. In any case, the borrower is hiring the top legal and functional consultants; and any willful or innocent errors at law becomes troublesome for the SAM Officers, sometimes FIR's have also been lodged against the Bank Officers on various counts to put the Bank under pressure to get a higher waiver in the OTS negotiations by the promoters in NPA accounts.
Like SBI, other Banks have also followed the pursuit for creating specialized establishments for the recovery of NPA accounts at different names. Oriental Bank of Commerce (OBC) names it 'Recovery & Law Cluster', Punjab National Bank (PNB) founded Asset Recovery Branches (ARC) and so on.
But, in any case the Officers are made available in these branches from other verticals and the HR departments of the Banks are not in a professional culture to consider the mutual suitability and aptitude of the Officers to be posted in these specialized verticals. However, some of the Officers have the opportunity to attend in-house very short duration training in the working of these departments or recovery laws, which is not sufficient, especially for those who are not having any inclination or aptitude in the learning of law. In fact, the cases of this nature are to be handled not only as per laid down provisions of the law but with new innovations and strategies to be adopted under the law, which is not always possible in these branches.
The founder of NPA Helpline for Banks, who served for 35 years in State Bank of India, the last decade being spent in some of the SAM Branches of the Bank, has to took voluntary retirement despite his meritorious record in recovery of NPA and AUCA accounts, for which he along with members of the team was awarded consecutively for last three years before he has to take VRS, also worked consulting the large and medium NPA Companies who were complaining the high-handedness by the Banks and got full success in getting their issues resolved and the disputes/loans settled by way of OTS.
Now upon demand of some Banking Colleagues, this innovative serivce 'NPA Helpline for Banks' is started, which aims at not only to impart legal advice (which is otherwise available from Law Officers or Bank's empanelled lawyers and advocates) but to take the ownership of the assigned portfolio or NPA Accounts and to take unified action with the help of its own team of Advocates, Private Detectives, Enforcement Agents, Valuers, Chartred Accountants and Forensic Auditors to assist the Banks to reduce its NPA in a time bound manner.
The holistic view of the cases filed against the Bank by the NPA account holder or his guarantors or filed by the Bank against them is taken and a unified strategic plan is casted to resolve the issues at 'NPA Helpline for Banks'.
The service is started at a pilot basis and over the time taking into response and keenness of the Banks to avail this service for better resolution of their NPA this service model is likely to get the proper shape with requisite modifications in its servicing model.
The Banks or FI's desiring to avail this service may contact the founder consultant Mr. Shakti Kumar Jain directly at (91)83606-96178 or email at: npahelpline@npa.co.in or at npahelpline@gmail.com .
