SlideShare a Scribd company logo
1 of 7
DEVTECH FINANCE
CREDIT MANAGEMENT TUTORIAL
RECOVERY
MANAGEMENT
IN BANKING
DEBT RECOVERY TRIBUNAL
ASSET RECONSTRUCTION
COMPANIES
DEBT RECOVERY
AGENTS
SARFAESI ACT
NOTICE ,REPOSSESSION &
SALE OF PROPERTY
INTRODUCTION TO RECOVERY MANAGEMENT
• Banks need to recover the money lent to the borrowers. In case the funds lend
becomes npa; it hampers whole banking business and decrease profitability.
• “Recovery” is defined as the process of regaining and saving something lost and
“Management” is the process of planning, organizing and controlling activities to
achieve the objectives of business efficiently.
• Recovery Management is thus concerned with designing and implementing a
collection of strategy to recover the debts without losing customers.
• Recovery measures could be legal and non-legal :- Banks could adopt legal
measures to recover loans by filing a suit in civil court or filing an application before
the DRTs. Before taking legal actions banks generally give frequent reminders by
calls, messages, mails and visit to borrower’s place which is considered as non-legal
measures without intervention of court.
• Major reasons behind defaults :- Lack of credit evaluation, Inadequacy of collateral
security/ equitable mortgage against loan, Lack of follow up measures, Default due
to natural calamities etc.
NOTICE TO BORROWERS, REPOSSESION & SALE
OF PROPERTY
• NOTICE TO BORROWER - Before initiation of any legal measures, giving notice to
borrowers in form of written communication, telephonic reminders or visits by the
bank’s representatives to the borrowers’ place is done as a part of loan follow up.
• REPOSSESSION OF SECURITY - Repossession of security is aimed at recovery of
dues from the borrower by taking custody of the property until full outstanding loan
amount is repaid. The recovery process through repossession of security will involve
valuation of security and realization of security through appropriate means.
Repossession can be done only after issuing the legal notice to borrower.
• VALUATION AND SALE OF PROPERTY - Valuation and sale of property
repossessed by the bank is carried out as per law and in a fair and transparent
manner. The bank have right to recover from the borrower the balance due if any
after sale of property. Excess amount 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 borrower.
DEBT RECOVERY TRIBUNALS
• The Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI);
popularly known as DRT Act was enacted in the year 1993 to speed up the
recovery process by banks and FIs through legal proceedings from their
borrowers.
• The Act provided for establishment of Debt Recovery Tribunals (DRTs) for
expeditious settlement in case of debts above Rs. 10 lakhs.
• Procedure for filing application before DRTs involve :-
a. Filling of application
b. Scrutiny of application by the Registrar of DRT
c. Issue of summons to borrowers
d. Recovery proceedings
ASSET RECONSTRUCTION COMPANIES
• The Securitization and Reconstruction of Financial Assets and Enforcement
of Security Interest (SARFAESI) Act, enacted in December 2002 provides
the legal basis for the setting up ARCs in India.
• Securitization means the conversion of an asset especially a loan into
marketable securities typically for the purpose of raising cash by selling
them to other investors.
• An Asset Reconstruction Company is a specialized financial institution that
buys the NPAs or bad assets from banks and financial institutions so that
the banks/FIs can clean up their balance sheets and ARCs can sell the debt
value in form of financial securities to investors.
• Banks rather than going after the defaulters by wasting their time and effort,
can sell the bad assets to the ARCs at a mutually agreed value.
DEBT RECOVERY AGENTS
• Debt Recovery Agent may be defined as a person or entity engaged by a bank
for the purpose of collecting specified bad loans or advances or other kind of
debts from the borrowers in accordance with the specified terms and conditions
of loan agreement.
• Banks are advised that they should ensure that the recovery agents are
properly trained to handle loan cases with care and sensitivity in particular
aspects like hours of calling, privacy of customer information, no abuses or
violence, informed of legal norms and compliances etc.
THANK YOU FOR WATCHING
DEVTECH
FINANCE

More Related Content

What's hot

Universal banking
Universal bankingUniversal banking
Universal bankingKartik Jain
 
Banker and customer relationship (ppt)
Banker and customer relationship (ppt)Banker and customer relationship (ppt)
Banker and customer relationship (ppt)DrRThangasundariRama
 
Non-Banking Financial Corporation (NBFC)
Non-Banking Financial Corporation (NBFC)Non-Banking Financial Corporation (NBFC)
Non-Banking Financial Corporation (NBFC)jatinvermaiasacademy
 
12. npa & recovery management
12. npa & recovery management12. npa & recovery management
12. npa & recovery managementRatnesh Ratn
 
Introduction to retail banking
Introduction to retail bankingIntroduction to retail banking
Introduction to retail bankingKartik Jain
 
Customers and account holders
Customers and account holdersCustomers and account holders
Customers and account holdersRATHESH J
 
Kyc norms in banks
Kyc norms in banksKyc norms in banks
Kyc norms in banksPankaj Baid
 
Capital Adequacy
Capital AdequacyCapital Adequacy
Capital AdequacyT A Sairam
 
Asset liability management
Asset liability managementAsset liability management
Asset liability managementTeena George
 
Credit management
Credit managementCredit management
Credit managementmammumammu
 
Asset liability management in banks
Asset liability management in banksAsset liability management in banks
Asset liability management in banksUjjwal 'Shanu'
 
Credit Risk Management
Credit Risk  ManagementCredit Risk  Management
Credit Risk ManagementFarouk Nasser
 
Indian banking system
Indian banking systemIndian banking system
Indian banking systemSaurabh Bhati
 
Indian Banking Structure
Indian Banking Structure Indian Banking Structure
Indian Banking Structure Praveen Asokan
 

What's hot (20)

Bank lendings and loans ppt
Bank lendings and loans pptBank lendings and loans ppt
Bank lendings and loans ppt
 
Universal banking
Universal bankingUniversal banking
Universal banking
 
Banker and customer relationship (ppt)
Banker and customer relationship (ppt)Banker and customer relationship (ppt)
Banker and customer relationship (ppt)
 
Non-Banking Financial Corporation (NBFC)
Non-Banking Financial Corporation (NBFC)Non-Banking Financial Corporation (NBFC)
Non-Banking Financial Corporation (NBFC)
 
12. npa & recovery management
12. npa & recovery management12. npa & recovery management
12. npa & recovery management
 
Development Banks
Development BanksDevelopment Banks
Development Banks
 
Introduction to retail banking
Introduction to retail bankingIntroduction to retail banking
Introduction to retail banking
 
Unit banking
Unit bankingUnit banking
Unit banking
 
Bank Funds & Liquidity Management
Bank Funds & Liquidity ManagementBank Funds & Liquidity Management
Bank Funds & Liquidity Management
 
Customers and account holders
Customers and account holdersCustomers and account holders
Customers and account holders
 
Kyc norms in banks
Kyc norms in banksKyc norms in banks
Kyc norms in banks
 
Capital Adequacy
Capital AdequacyCapital Adequacy
Capital Adequacy
 
Asset liability management
Asset liability managementAsset liability management
Asset liability management
 
Credit management
Credit managementCredit management
Credit management
 
Asset liability management in banks
Asset liability management in banksAsset liability management in banks
Asset liability management in banks
 
Loans and advances ppt
Loans and advances pptLoans and advances ppt
Loans and advances ppt
 
Credit Risk Management
Credit Risk  ManagementCredit Risk  Management
Credit Risk Management
 
Financial services
Financial servicesFinancial services
Financial services
 
Indian banking system
Indian banking systemIndian banking system
Indian banking system
 
Indian Banking Structure
Indian Banking Structure Indian Banking Structure
Indian Banking Structure
 

Similar to Recovery Management In Banking

Presentation on SARFAESI Act_Anurag Ghosh_16PGDMBFS08
Presentation on SARFAESI Act_Anurag Ghosh_16PGDMBFS08Presentation on SARFAESI Act_Anurag Ghosh_16PGDMBFS08
Presentation on SARFAESI Act_Anurag Ghosh_16PGDMBFS08Anurag Ghosh
 
Measures of asset reconstruction-PPT.pptx
Measures of asset reconstruction-PPT.pptxMeasures of asset reconstruction-PPT.pptx
Measures of asset reconstruction-PPT.pptxLEDROIT1
 
ENTREPRENEURS - DEBT - RECOVERY - MANAGEMENT -PPT.pptx
ENTREPRENEURS - DEBT -  RECOVERY - MANAGEMENT -PPT.pptxENTREPRENEURS - DEBT -  RECOVERY - MANAGEMENT -PPT.pptx
ENTREPRENEURS - DEBT - RECOVERY - MANAGEMENT -PPT.pptxRRR Chambers
 
COMMERCIAL BANKS & SCHEMES OF COMMERCIAL BANKS.pptx
COMMERCIAL BANKS & SCHEMES OF COMMERCIAL BANKS.pptxCOMMERCIAL BANKS & SCHEMES OF COMMERCIAL BANKS.pptx
COMMERCIAL BANKS & SCHEMES OF COMMERCIAL BANKS.pptxkittustudy7
 
ENTREPRENEURS DEBT RECOVERY MANAGEMENT.pptx
ENTREPRENEURS  DEBT   RECOVERY MANAGEMENT.pptxENTREPRENEURS  DEBT   RECOVERY MANAGEMENT.pptx
ENTREPRENEURS DEBT RECOVERY MANAGEMENT.pptxRRR Chambers
 
Loans And Advances Chapter 4 new.pptx
Loans And Advances Chapter 4 new.pptxLoans And Advances Chapter 4 new.pptx
Loans And Advances Chapter 4 new.pptxAbhigowsa
 
savings bank account services by karnataka bank
savings bank account services by karnataka banksavings bank account services by karnataka bank
savings bank account services by karnataka bankAprameya joshi
 
Chapter_2_Overview of Commercial Banks_2022.pptx
Chapter_2_Overview of Commercial Banks_2022.pptxChapter_2_Overview of Commercial Banks_2022.pptx
Chapter_2_Overview of Commercial Banks_2022.pptxShetuBiswas3
 
Unit 5- Financial Services
Unit 5- Financial ServicesUnit 5- Financial Services
Unit 5- Financial ServicesPRAVEEN B
 
Principle & Forms of Lending (USAMA 224).pptx
Principle & Forms of Lending (USAMA 224).pptxPrinciple & Forms of Lending (USAMA 224).pptx
Principle & Forms of Lending (USAMA 224).pptxMuhammadKashif584561
 
financialservices-130430050753-phpapp02.pdf
financialservices-130430050753-phpapp02.pdffinancialservices-130430050753-phpapp02.pdf
financialservices-130430050753-phpapp02.pdfKhushi822917
 
CREDIT AND COLLECTION.pptx
CREDIT AND COLLECTION.pptxCREDIT AND COLLECTION.pptx
CREDIT AND COLLECTION.pptxBEACARMONA2
 
ANDRA JINAH BANDIOLA (commercial bank).pptx
ANDRA JINAH BANDIOLA (commercial bank).pptxANDRA JINAH BANDIOLA (commercial bank).pptx
ANDRA JINAH BANDIOLA (commercial bank).pptxRoyette Ladica
 
Bank and Customer.pptx
Bank and Customer.pptxBank and Customer.pptx
Bank and Customer.pptxShivaniSati5
 
Banking system BA.pptx
Banking system BA.pptxBanking system BA.pptx
Banking system BA.pptxranjanishukla1
 
29714464 corporate-banking-updated2
29714464 corporate-banking-updated229714464 corporate-banking-updated2
29714464 corporate-banking-updated2Ashish Chopra
 

Similar to Recovery Management In Banking (20)

Presentation on SARFAESI Act_Anurag Ghosh_16PGDMBFS08
Presentation on SARFAESI Act_Anurag Ghosh_16PGDMBFS08Presentation on SARFAESI Act_Anurag Ghosh_16PGDMBFS08
Presentation on SARFAESI Act_Anurag Ghosh_16PGDMBFS08
 
Measures of asset reconstruction-PPT.pptx
Measures of asset reconstruction-PPT.pptxMeasures of asset reconstruction-PPT.pptx
Measures of asset reconstruction-PPT.pptx
 
ENTREPRENEURS - DEBT - RECOVERY - MANAGEMENT -PPT.pptx
ENTREPRENEURS - DEBT -  RECOVERY - MANAGEMENT -PPT.pptxENTREPRENEURS - DEBT -  RECOVERY - MANAGEMENT -PPT.pptx
ENTREPRENEURS - DEBT - RECOVERY - MANAGEMENT -PPT.pptx
 
COMMERCIAL BANKS & SCHEMES OF COMMERCIAL BANKS.pptx
COMMERCIAL BANKS & SCHEMES OF COMMERCIAL BANKS.pptxCOMMERCIAL BANKS & SCHEMES OF COMMERCIAL BANKS.pptx
COMMERCIAL BANKS & SCHEMES OF COMMERCIAL BANKS.pptx
 
ENTREPRENEURS DEBT RECOVERY MANAGEMENT.pptx
ENTREPRENEURS  DEBT   RECOVERY MANAGEMENT.pptxENTREPRENEURS  DEBT   RECOVERY MANAGEMENT.pptx
ENTREPRENEURS DEBT RECOVERY MANAGEMENT.pptx
 
Loans And Advances Chapter 4 new.pptx
Loans And Advances Chapter 4 new.pptxLoans And Advances Chapter 4 new.pptx
Loans And Advances Chapter 4 new.pptx
 
A.loans & advances
A.loans & advancesA.loans & advances
A.loans & advances
 
Sarfaesi Act
Sarfaesi ActSarfaesi Act
Sarfaesi Act
 
Nbfc
NbfcNbfc
Nbfc
 
savings bank account services by karnataka bank
savings bank account services by karnataka banksavings bank account services by karnataka bank
savings bank account services by karnataka bank
 
Chapter_2_Overview of Commercial Banks_2022.pptx
Chapter_2_Overview of Commercial Banks_2022.pptxChapter_2_Overview of Commercial Banks_2022.pptx
Chapter_2_Overview of Commercial Banks_2022.pptx
 
Unit 5- Financial Services
Unit 5- Financial ServicesUnit 5- Financial Services
Unit 5- Financial Services
 
Principle & Forms of Lending (USAMA 224).pptx
Principle & Forms of Lending (USAMA 224).pptxPrinciple & Forms of Lending (USAMA 224).pptx
Principle & Forms of Lending (USAMA 224).pptx
 
Banking
BankingBanking
Banking
 
financialservices-130430050753-phpapp02.pdf
financialservices-130430050753-phpapp02.pdffinancialservices-130430050753-phpapp02.pdf
financialservices-130430050753-phpapp02.pdf
 
CREDIT AND COLLECTION.pptx
CREDIT AND COLLECTION.pptxCREDIT AND COLLECTION.pptx
CREDIT AND COLLECTION.pptx
 
ANDRA JINAH BANDIOLA (commercial bank).pptx
ANDRA JINAH BANDIOLA (commercial bank).pptxANDRA JINAH BANDIOLA (commercial bank).pptx
ANDRA JINAH BANDIOLA (commercial bank).pptx
 
Bank and Customer.pptx
Bank and Customer.pptxBank and Customer.pptx
Bank and Customer.pptx
 
Banking system BA.pptx
Banking system BA.pptxBanking system BA.pptx
Banking system BA.pptx
 
29714464 corporate-banking-updated2
29714464 corporate-banking-updated229714464 corporate-banking-updated2
29714464 corporate-banking-updated2
 

More from DevTech Finance (20)

Bitcoin - The CryptoCurrency
Bitcoin - The CryptoCurrencyBitcoin - The CryptoCurrency
Bitcoin - The CryptoCurrency
 
Cash Management
Cash ManagementCash Management
Cash Management
 
Portfolio Management
Portfolio ManagementPortfolio Management
Portfolio Management
 
No Cost EMI - 0% Interest Loan
No Cost EMI - 0% Interest LoanNo Cost EMI - 0% Interest Loan
No Cost EMI - 0% Interest Loan
 
Health Insurance
Health InsuranceHealth Insurance
Health Insurance
 
Face Value, Book Value & Market Value
Face Value, Book Value & Market ValueFace Value, Book Value & Market Value
Face Value, Book Value & Market Value
 
Loan Moratorium Period.
Loan Moratorium Period.Loan Moratorium Period.
Loan Moratorium Period.
 
Hire Purchase
Hire PurchaseHire Purchase
Hire Purchase
 
Infrastructure Financing
Infrastructure FinancingInfrastructure Financing
Infrastructure Financing
 
Board of Directors
Board of DirectorsBoard of Directors
Board of Directors
 
Inventory Management
Inventory ManagementInventory Management
Inventory Management
 
Money Market
Money MarketMoney Market
Money Market
 
Consortium Finance
Consortium FinanceConsortium Finance
Consortium Finance
 
Indian Banking System
Indian Banking SystemIndian Banking System
Indian Banking System
 
CRM Models
CRM ModelsCRM Models
CRM Models
 
Accounting Concepts & Conventions
Accounting Concepts & ConventionsAccounting Concepts & Conventions
Accounting Concepts & Conventions
 
NBFC
NBFCNBFC
NBFC
 
NPCI
NPCINPCI
NPCI
 
Credit Monitoring
Credit MonitoringCredit Monitoring
Credit Monitoring
 
Stewardship theory
Stewardship theoryStewardship theory
Stewardship theory
 

Recently uploaded

Andreas Schleicher presents at the launch of What does child empowerment mean...
Andreas Schleicher presents at the launch of What does child empowerment mean...Andreas Schleicher presents at the launch of What does child empowerment mean...
Andreas Schleicher presents at the launch of What does child empowerment mean...EduSkills OECD
 
Personalisation of Education by AI and Big Data - Lourdes Guàrdia
Personalisation of Education by AI and Big Data - Lourdes GuàrdiaPersonalisation of Education by AI and Big Data - Lourdes Guàrdia
Personalisation of Education by AI and Big Data - Lourdes GuàrdiaEADTU
 
SURVEY I created for uni project research
SURVEY I created for uni project researchSURVEY I created for uni project research
SURVEY I created for uni project researchCaitlinCummins3
 
Model Attribute _rec_name in the Odoo 17
Model Attribute _rec_name in the Odoo 17Model Attribute _rec_name in the Odoo 17
Model Attribute _rec_name in the Odoo 17Celine George
 
Pharmaceutical Biotechnology VI semester.pdf
Pharmaceutical Biotechnology VI semester.pdfPharmaceutical Biotechnology VI semester.pdf
Pharmaceutical Biotechnology VI semester.pdfBALASUNDARESAN M
 
Rich Dad Poor Dad ( PDFDrive.com )--.pdf
Rich Dad Poor Dad ( PDFDrive.com )--.pdfRich Dad Poor Dad ( PDFDrive.com )--.pdf
Rich Dad Poor Dad ( PDFDrive.com )--.pdfJerry Chew
 
PUBLIC FINANCE AND TAXATION COURSE-1-4.pdf
PUBLIC FINANCE AND TAXATION COURSE-1-4.pdfPUBLIC FINANCE AND TAXATION COURSE-1-4.pdf
PUBLIC FINANCE AND TAXATION COURSE-1-4.pdfMinawBelay
 
How to Add a Tool Tip to a Field in Odoo 17
How to Add a Tool Tip to a Field in Odoo 17How to Add a Tool Tip to a Field in Odoo 17
How to Add a Tool Tip to a Field in Odoo 17Celine George
 
Graduate Outcomes Presentation Slides - English (v3).pptx
Graduate Outcomes Presentation Slides - English (v3).pptxGraduate Outcomes Presentation Slides - English (v3).pptx
Graduate Outcomes Presentation Slides - English (v3).pptxneillewis46
 
SPLICE Working Group: Reusable Code Examples
SPLICE Working Group:Reusable Code ExamplesSPLICE Working Group:Reusable Code Examples
SPLICE Working Group: Reusable Code ExamplesPeter Brusilovsky
 
FSB Advising Checklist - Orientation 2024
FSB Advising Checklist - Orientation 2024FSB Advising Checklist - Orientation 2024
FSB Advising Checklist - Orientation 2024Elizabeth Walsh
 
Orientation Canvas Course Presentation.pdf
Orientation Canvas Course Presentation.pdfOrientation Canvas Course Presentation.pdf
Orientation Canvas Course Presentation.pdfElizabeth Walsh
 
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPSSpellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPSAnaAcapella
 
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lessonQUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lessonhttgc7rh9c
 
Graduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - EnglishGraduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - Englishneillewis46
 
What is 3 Way Matching Process in Odoo 17.pptx
What is 3 Way Matching Process in Odoo 17.pptxWhat is 3 Way Matching Process in Odoo 17.pptx
What is 3 Way Matching Process in Odoo 17.pptxCeline George
 
Ernest Hemingway's For Whom the Bell Tolls
Ernest Hemingway's For Whom the Bell TollsErnest Hemingway's For Whom the Bell Tolls
Ernest Hemingway's For Whom the Bell TollsPallavi Parmar
 
Details on CBSE Compartment Exam.pptx1111
Details on CBSE Compartment Exam.pptx1111Details on CBSE Compartment Exam.pptx1111
Details on CBSE Compartment Exam.pptx1111GangaMaiya1
 
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptxHMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptxEsquimalt MFRC
 

Recently uploaded (20)

Andreas Schleicher presents at the launch of What does child empowerment mean...
Andreas Schleicher presents at the launch of What does child empowerment mean...Andreas Schleicher presents at the launch of What does child empowerment mean...
Andreas Schleicher presents at the launch of What does child empowerment mean...
 
Personalisation of Education by AI and Big Data - Lourdes Guàrdia
Personalisation of Education by AI and Big Data - Lourdes GuàrdiaPersonalisation of Education by AI and Big Data - Lourdes Guàrdia
Personalisation of Education by AI and Big Data - Lourdes Guàrdia
 
SURVEY I created for uni project research
SURVEY I created for uni project researchSURVEY I created for uni project research
SURVEY I created for uni project research
 
Model Attribute _rec_name in the Odoo 17
Model Attribute _rec_name in the Odoo 17Model Attribute _rec_name in the Odoo 17
Model Attribute _rec_name in the Odoo 17
 
Pharmaceutical Biotechnology VI semester.pdf
Pharmaceutical Biotechnology VI semester.pdfPharmaceutical Biotechnology VI semester.pdf
Pharmaceutical Biotechnology VI semester.pdf
 
Rich Dad Poor Dad ( PDFDrive.com )--.pdf
Rich Dad Poor Dad ( PDFDrive.com )--.pdfRich Dad Poor Dad ( PDFDrive.com )--.pdf
Rich Dad Poor Dad ( PDFDrive.com )--.pdf
 
PUBLIC FINANCE AND TAXATION COURSE-1-4.pdf
PUBLIC FINANCE AND TAXATION COURSE-1-4.pdfPUBLIC FINANCE AND TAXATION COURSE-1-4.pdf
PUBLIC FINANCE AND TAXATION COURSE-1-4.pdf
 
How to Add a Tool Tip to a Field in Odoo 17
How to Add a Tool Tip to a Field in Odoo 17How to Add a Tool Tip to a Field in Odoo 17
How to Add a Tool Tip to a Field in Odoo 17
 
VAMOS CUIDAR DO NOSSO PLANETA! .
VAMOS CUIDAR DO NOSSO PLANETA!                    .VAMOS CUIDAR DO NOSSO PLANETA!                    .
VAMOS CUIDAR DO NOSSO PLANETA! .
 
Graduate Outcomes Presentation Slides - English (v3).pptx
Graduate Outcomes Presentation Slides - English (v3).pptxGraduate Outcomes Presentation Slides - English (v3).pptx
Graduate Outcomes Presentation Slides - English (v3).pptx
 
SPLICE Working Group: Reusable Code Examples
SPLICE Working Group:Reusable Code ExamplesSPLICE Working Group:Reusable Code Examples
SPLICE Working Group: Reusable Code Examples
 
FSB Advising Checklist - Orientation 2024
FSB Advising Checklist - Orientation 2024FSB Advising Checklist - Orientation 2024
FSB Advising Checklist - Orientation 2024
 
Orientation Canvas Course Presentation.pdf
Orientation Canvas Course Presentation.pdfOrientation Canvas Course Presentation.pdf
Orientation Canvas Course Presentation.pdf
 
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPSSpellings Wk 4 and Wk 5 for Grade 4 at CAPS
Spellings Wk 4 and Wk 5 for Grade 4 at CAPS
 
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lessonQUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
QUATER-1-PE-HEALTH-LC2- this is just a sample of unpacked lesson
 
Graduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - EnglishGraduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - English
 
What is 3 Way Matching Process in Odoo 17.pptx
What is 3 Way Matching Process in Odoo 17.pptxWhat is 3 Way Matching Process in Odoo 17.pptx
What is 3 Way Matching Process in Odoo 17.pptx
 
Ernest Hemingway's For Whom the Bell Tolls
Ernest Hemingway's For Whom the Bell TollsErnest Hemingway's For Whom the Bell Tolls
Ernest Hemingway's For Whom the Bell Tolls
 
Details on CBSE Compartment Exam.pptx1111
Details on CBSE Compartment Exam.pptx1111Details on CBSE Compartment Exam.pptx1111
Details on CBSE Compartment Exam.pptx1111
 
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptxHMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
HMCS Max Bernays Pre-Deployment Brief (May 2024).pptx
 

Recovery Management In Banking

  • 1. DEVTECH FINANCE CREDIT MANAGEMENT TUTORIAL RECOVERY MANAGEMENT IN BANKING DEBT RECOVERY TRIBUNAL ASSET RECONSTRUCTION COMPANIES DEBT RECOVERY AGENTS SARFAESI ACT NOTICE ,REPOSSESSION & SALE OF PROPERTY
  • 2. INTRODUCTION TO RECOVERY MANAGEMENT • Banks need to recover the money lent to the borrowers. In case the funds lend becomes npa; it hampers whole banking business and decrease profitability. • “Recovery” is defined as the process of regaining and saving something lost and “Management” is the process of planning, organizing and controlling activities to achieve the objectives of business efficiently. • Recovery Management is thus concerned with designing and implementing a collection of strategy to recover the debts without losing customers. • Recovery measures could be legal and non-legal :- Banks could adopt legal measures to recover loans by filing a suit in civil court or filing an application before the DRTs. Before taking legal actions banks generally give frequent reminders by calls, messages, mails and visit to borrower’s place which is considered as non-legal measures without intervention of court. • Major reasons behind defaults :- Lack of credit evaluation, Inadequacy of collateral security/ equitable mortgage against loan, Lack of follow up measures, Default due to natural calamities etc.
  • 3. NOTICE TO BORROWERS, REPOSSESION & SALE OF PROPERTY • NOTICE TO BORROWER - Before initiation of any legal measures, giving notice to borrowers in form of written communication, telephonic reminders or visits by the bank’s representatives to the borrowers’ place is done as a part of loan follow up. • REPOSSESSION OF SECURITY - Repossession of security is aimed at recovery of dues from the borrower by taking custody of the property until full outstanding loan amount is repaid. The recovery process through repossession of security will involve valuation of security and realization of security through appropriate means. Repossession can be done only after issuing the legal notice to borrower. • VALUATION AND SALE OF PROPERTY - Valuation and sale of property repossessed by the bank is carried out as per law and in a fair and transparent manner. The bank have right to recover from the borrower the balance due if any after sale of property. Excess amount 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 borrower.
  • 4. DEBT RECOVERY TRIBUNALS • The Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI); popularly known as DRT Act was enacted in the year 1993 to speed up the recovery process by banks and FIs through legal proceedings from their borrowers. • The Act provided for establishment of Debt Recovery Tribunals (DRTs) for expeditious settlement in case of debts above Rs. 10 lakhs. • Procedure for filing application before DRTs involve :- a. Filling of application b. Scrutiny of application by the Registrar of DRT c. Issue of summons to borrowers d. Recovery proceedings
  • 5. ASSET RECONSTRUCTION COMPANIES • The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, enacted in December 2002 provides the legal basis for the setting up ARCs in India. • Securitization means the conversion of an asset especially a loan into marketable securities typically for the purpose of raising cash by selling them to other investors. • An Asset Reconstruction Company is a specialized financial institution that buys the NPAs or bad assets from banks and financial institutions so that the banks/FIs can clean up their balance sheets and ARCs can sell the debt value in form of financial securities to investors. • Banks rather than going after the defaulters by wasting their time and effort, can sell the bad assets to the ARCs at a mutually agreed value.
  • 6. DEBT RECOVERY AGENTS • Debt Recovery Agent may be defined as a person or entity engaged by a bank for the purpose of collecting specified bad loans or advances or other kind of debts from the borrowers in accordance with the specified terms and conditions of loan agreement. • Banks are advised that they should ensure that the recovery agents are properly trained to handle loan cases with care and sensitivity in particular aspects like hours of calling, privacy of customer information, no abuses or violence, informed of legal norms and compliances etc.
  • 7. THANK YOU FOR WATCHING DEVTECH FINANCE