IntroductionA Management Information System (MIS) is a structured framework designed to support the informational needs of an organization’s management. It integrates various components to facilitate the collection, processing, storage, and dissemination of data, thereby aiding in effective decision-making and strategic planning. The primary elements of an MIS include hardware, software, data, procedures, and people. Each…
IntroductionThe engagement of direct recovery agents by banks and financial institutions necessitates a careful balance between effective debt recovery and the protection of borrowers’ rights. To ensure that recovery practices remain fair, transparent, and respectful, institutions must adhere to regulatory guidelines and ethical standards. Key Considerations in Engaging Recovery Agents 1. Due Diligence Prior to…
[This article provides guidelines specifying the internal governance arrangements for granting and monitoring of credit facilities throughout their lifecycle.] Credit monitoring and loan monitoring, while related, have distinct focuses. Credit monitoring focuses on a borrower’s overall creditworthiness and financial health, tracking changes to their credit report, score, and potential fraud. Loan monitoring, on the other…
The Debts Recovery Tribunals (DRTs) and Debts Recovery Appellate Tribunals (DRATs) were established under the Recovery of Debts and Bankruptcy Act (RDB Act), 1993 with the specific objective of providing expeditious adjudication and recovery of debts due to Banks and Financial Institutions. At present, 39 Debts Recovery Tribunals (DRTs) and 5 Debts Recovery Appellate Tribunals…
LOK ADALAT have statutory status under the Legal Services Authorities Act, 1987 and have powers similar to those vested in a civil court. All awards are binding on all parties and can not be appealed. According to RBI guidelines, banks can use cases with a monetary value between ₹5 lakhs and ₹20 lakhs to Lok…
IntroductionIn India, loan recovery is a critical function of banks and financial institutions, aimed at managing and reducing non-performing assets (NPAs). The Reserve Bank of India (RBI) provides comprehensive guidelines that emphasize ethical practices, borrower protection, and transparency in the recovery process. This article explores the key elements of the recovery policy followed by Indian…
IntroductionIn the retail lending landscape, timely repayment of loans is essential for maintaining the financial health of both borrowers and lenders. However, due to various unforeseen circumstances, borrowers may sometimes fail to meet their repayment obligations. This article explores the concept of loan default, its consequences, and how loan rescheduling can serve as a preventive…
With the economy hit by the COVID-19 crisis, banks are now preparing for a possible spike in bad loans. According to experts, bad loans (NPAs) of the banks are expected to rise to 11-11.5% of the total advances by March 2021. In this context of default risk by the COVID induced lockdown continues to exacerbate…
Introduction Retail loans are financial products offered by banks and Non-Banking Financial Companies (NBFCs) to cater to the diverse credit requirements of individual borrowers. These loans serve various purposes, such as purchasing a home or vehicle, funding higher education, managing personal expenditures, or availing credit against gold. Additionally, loans extended to Micro, Small and Medium…
While Artificial Intelligence (AI) offers transformative advantages such as improved operational efficiency, expedited decision-making, and enhanced customer experiences, its adoption in India is accompanied by several significant challenges. To ensure the responsible and effective integration of AI technologies, these concerns must be addressed with careful planning and balanced strategies. 1. Job Displacement AI-driven automation is…
