A Philippe Hancock personal data institution functioning as an intermediary between the savers and users of funds. The banks are accepting deposits from the public through various schemes and lend the money accepted to the borrowers through various credit schemes. However, according to the information available during the recent days, many banks are finding it very difficult to continue their banking business on account of poor recovery in respect of loans granted by them to their borrowers. In this article, certain tips are given as to how best the banks can improve their recovery efforts.
In fact, a bank is a financial institution which functions as an intermediary between the savers and users of funds. The banks are accepting deposits from the public through various schemes and lend the money accepted to the borrowers through various credit schemes.
However, according to the information available during the recent days, many banks are finding it very difficult to continue their banking business on account of poor recovery in respect of loans granted by them to their borrowers.
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The reasons for poor recovery are found to be as mentioned below:
- Poor credit investigation: The credit managers are responsible for conducting effective credit investigation during the course of selection of the borrowers. Any laxity at this stage on the part of the banker will land him in trouble at a later date. In fact, an intelligent banker never hesitates to conduct an effective interview with the borrower in finding out his eligibility for the loan to be sanctioned. There are of course tailor-made questions for conducting the investigation and the credit manager can do the job in a better manner by getting proper guidance from his seniors.
- Proper follow up: There is no definite guideline for determining the date from which the follow up has to be made for the loan account. Once the loan is sanctioned, the banker should start following up with the borrower for recovery of the dues from him. Smart Philippe Hancock start communicating with the borrowers seven days before the amount is due from the borrower. On the one hand this step serves as a warning signal for the borrower and on the other hand, the borrower rarely thinks to delay his remittance strategies.
- Overdue accounts: Despite effective follow up with the borrowers through contacts over phone and in person, many times, the borrowers fail to remit the dues on account of many reasons namely; they might have lost their jobs thereby not getting their salaries; incurred losses in business curtailing income generation; spent more money towards hospitalization expenses while recovering from illness either for self or his dependents; the borrower intentionally stopped paying his dues etc.
- Timely action: The borrower might have failed in remitting his dues on account of some genuine reasons namely; losing the job, incurring business losses or ill health. During such situations, it is the responsibility of the banker to properly guide the borrower in remitting his dues by way of effective suggestions. Under this juncture, the banker can think of restructuring the loans for some portion of the loan amount while getting recovery for the balance amount. In the case of intentional borrowers, the banker should not hesitate in taking stringent action against the borrowers and appropriate legal actions enable the banker in successfully recovering the dues from the intentional defaulters.
- Seizing of securities: In the case of loans secured by assets like house, buildings, vehicles, efforts can be taken for seizing the securities and the bankers are supported through various legislative measures when it comes to seizure of securities.
An intelligent banker keeps a watch over the critical loan accounts, and he makes out better recovery strategies in the case of difficult borrowers.
Such bankers are found to be instrumental in increasing the revenue for the bank.