A recent press report said that Union Bank of India has planned to set up call centers that will focus on following up with borrowers who have fallen behind on their loan repayment. The bank offers home loans, personal loan, car loan, educational loan etc.
Reports said that the bank has planned to bring down its non-performing assets and improve its recovery in order to boost up its profitability. Official said that the first call centre will be set up on a pilot basis in Mumbai. After a month of operations, similar centres are to be opened in other regions.
The centered will be outsourced and will follow up with borrowers for recovery and report to the bank daily. Reports said that the NPA of the bank has been declining and in the last financial year, the recovery in written-off accounts was Rs 212 crore, higher by 15.85. In the fourth quarter alone the recovery was Rs 98 crore.
The bank officials said that settling with borrowers offers better returns than selling to ARCs and selling off NPAs is not highly profitable as banks get only 14-15 per cent of the outstanding loan amount from ARCs and that too only if there is security or collateral. He added saying that among the bad accounts, only 3-4 per cent of the cases reach a stage where the bank may have to ultimately sell off the property.