Policy on Collection of Dues
and Repossession
of Security for Individuals, Micro and Small Enterprises
1. Introduction:
The debt collection policy of the bank is built
around dignity and respect to customers. The policy
is built on courtesy, fair treatment and persuasion.
The bank believes in following fair practices
with regard to collection of dues and repossession
of security and thereby fostering customer confidence
and long-term relationship. Bank will not follow
policies that are unduly coercive in collection
of dues
The repayment schedule for any loan sanctioned
by the bank will be fixed taking into account
paying capacity and cash flow pattern of the borrower.
The bank will explain to the customer upfront
the method of calculation of interest and how
the Equated Monthly Installments (EMI) or payments
through any other mode of repayment will be appropriated
against interest and principal due from the customers.
The bank would expect the customers to adhere
to the repayment schedule agreed to and approach
the bank for assistance and guidance in case of
genuine difficulty in meeting repayment obligations.
Bank’s Security Repossession Policy aims
at recovery of dues in the event of default and
is not aimed at whimsical deprivation of the property.
The policy recognizes fairness and transparency
in repossession, valuation and realization of
security. All the practices adopted by the bank
for follow up and recovery of dues and repossession
of security will be inconsonance with the law.
2. General Guidelines:
All the members of the staff or any person authorized
to represent our bank in collection or/and security
repossession would follow the guidelines set out
below:
- The customer would be contacted ordinarily
at the address registered with the Bank or at
his/her business / occupation address or place
of residence. However, if the customer is unavailable
at any of such places, then he/she would be
contacted at such places and at such times as
the customer is actually present / available
or can be traced to.
- Identity and authority of persons authorized
to represent bank for follow up and recovery
of dues would be made known to the borrowers
at the first instance. The bank staff or any
person authorized to represent the bank in collection
of dues or/and security repossession will identify
himself / herself and display the authority
letter issued by the bank upon request.
- The bank would respect privacy of its borrowers.
- The bank is committed to ensure that all
written and verbal communication with its borrowers
will be in simple business language and bank
will adopt civil manners for interaction with
borrowers.
- Normally the bank’s representatives
will contact the borrower between 0700 Hours
and 1900 Hours, unless the special circumstance
of borrower’s business or occupation or
other engagements requires the bank to contact
him/her at a different time.
- Borrower’s requests to avoid calls
at a particular time or at a particular place
would be honored as far as possible.
- The bank will document the efforts made for
the recovery of dues and the copies of communication,
if any, sent to customers will be kept on record.
- All assistance will be given to resolve disputes
or differences regarding dues in a mutually
acceptable and in an orderly manner.
- Inappropriate occasions such as bereavement
in the family or such other calamitous occasions
will be avoided for making calls/visits to collect
dues.
3. Giving notice to borrowers
While written communications, telephonic reminders
or visits by the bank’s representatives
to the borrowers place or residence will be used
as loan follow up measures, the bank will not
initiate any legal or other recovery measures
including repossession of the security without
giving due notice in writing. The Bank will issue
written notices to the borrowers after dishonour
of cheques / non-receipt of dues. Generally, Bank
will proceed with the repossession of security
only after the dues are outstanding beyond 60
days from due date. Bank will follow all such
procedures as required under law for recovery/repossession
of security.
4. Repossession of Security
Repossession of security is aimed at recovery
of dues and not to deprive the borrower of the
property. The recovery process through repossession
of security will involve repossession, valuation
of security and realization of security through
appropriate means. All these would be carried
out in a fair and transparent manner. Repossession
will be done only after issuing the notice as
detailed above. Due process of law will be followed
while taking repossession of the property. The
bank will take all reasonable care for ensuring
the safety and security of the property after
taking custody, in the ordinary course of the
business.
5. Valuations and Sale
of Property
Valuation and sale of property repossessed by
the bank will be carried out as per law and in
a fair and transparent manner. The Bank will give
reasonable notice to the borrower before proceeding
with the sale of the property repossessed. The
Bank will intimate to the borrower the time, date
and venue of the auction. The bank will have right
to recover from the borrower the balance due,
if any, after sale of property. Excess amount
if any, obtained on sale of property will be returned
to the borrower after meeting all the related
expenses provided the bank is not having any other
claims against the customer.
6. Opportunity for the
borrower to take back the security
As indicated earlier in the policy document,
the bank will resort to repossession of security
only for the purpose of realization of its dues
as the last resort and not with intention of depriving
the borrower of the property. Accordingly the
bank will be willing to consider handing over
possession of property to the borrower any time
after repossession and before concluding sale
transaction of the property, provided the bank’s
dues are cleared in full. If satisfied with the
genuineness of borrower’s inability to pay
the loan installments as per the schedule, which
resulted in the repossession of security, the
bank may consider handing over the property after
receiving the installments in arrears. However,
this would be subject to the bank being convinced
of the arrangements made by the borrower to ensure
timely repayment of remaining installments in
future. The Bank would generally be giving back
the possession of the security within 30 days
of receipt of the full and final dues.
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