Union Bank has planned to set up centres to assist in loan recovery

By Pradeep Yuvaraj | June 1, 2011

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.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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