Policy on Collection of Dues and Repossession of Security

((Updated on December 12, 2024))

Introduction

The debt collection policy of the Bank is built around dignity and respect for the borrower. The Bank will not follow policies that are unduly forceful in collection of dues. The policy is built on courtesy, fair treatment and persuasion. The Bank believes in following fair practices with regard to the collection of dues and repossession of security and thereby building the borrower’s confidence and long-term relationship.

The Bank’s Security Repossession Policy aims at recovery of dues in the event of default and is not aimed at deprivation of the immovable or movable security. The policy recognises fairness and transparency in surrender, repossession, valuation and disposal of security. All the practices adopted by the Bank for follow up and recovery of dues and repossession of security will be in accordance with the law. Security repossession procedure would be set in motion only after all attempts by the Bank to discuss with the borrower, the ways and means to overcome the financial obstacles have failed or if the borrower is not contactable/avoiding contact for a reasonable period. 

2.General Guidelines:

All the members of the staff or any person authorised to represent our Bank with respect to collection of dues or/and security repossession would follow the guidelines set out below:

• The borrower would be contacted at the place of his/her choice and in the absence of any specified place, at the place of his/her residence and if unavailable at his/her residence, at the place of business/occupation.

• Identity and authority of the person authorised to represent the Bank for follow up and recovery of dues would be made known to the borrower at the first instance. Once the loan turns delinquent and the recovery agent has been assigned to the borrower for the collection of dues the particulars of such recovery agent assigned are communicated to the borrower through e-mail / SMS / letter, before the recovery agent contacts the borrower for the collection of dues. The Bank staff or any person authorised to represent the Bank with respect to collection of dues or/and security repossession will identify himself/herself and display the ID Card (which includes due authorisation of the Bank) issued by the Bank. Additionally, the Bank will provide the assigned agent, a copy of intimation notice sent to the borrower which can be displayed on demand to the borrower.

• The Bank will respect the privacy of the borrower.

• The Bank is committed to ensure that all written and verbal communications with the borrower will be in simple business language and the Bank will adopt civil manners for interaction with the borrower.

• Normally the Bank’s representatives will contact the borrower between <08:00 a.m. and 07:00 p.m.>, unless the special circumstance of the borrower’s business or occupation requires the Bank to contact the borrower at a different time.

• The Borrower’s request to avoid calls at a particular time or at a particular place will be honoured as far as possible.

• The Bank will document the efforts made for the recovery of dues and the communication copies sent to the borrower, if any, will be kept on record.

• All assistance will be given to resolve the disputes or differences regarding the dues in a mutually acceptable and orderly manner.

• Inappropriate occasions such as death in the family or such other difficult situations will be avoided for making calls/visits to collect the dues.

• The Bank will also adhere to the existing regulatory guidelines on Fair Practices Code for Lenders, Outsourcing of Financial Services, Code of Bank's Commitment to Customers and Recovery Agents engaged by the Bank.

3. Engagement of recovery agency:

The Bank may utilise the services of the recovery agencies for collection of dues and repossession of securities. Recovery agencies will be appointed as per the regulatory guidelines issued in this regard. In this respect:

• The name and address of all the Recovery Agencies on the Bank’s approved panel will be placed on the Bank’s website for information.

• Only recovery agencies from the approved panel will be engaged by the Bank.

• Employees of the recovery agencies, after completing the mandatory Debt Recovery Agent (DRA) training, will be issued valid ID Cards authorising them to collect dues from the Bank's borrower.

• In case the Bank engages the services of such recovery/ enforcement/ seizure agency for any recovery case, the identity of the agency will be disclosed to the borrower.

• The recovery agents engaged by the Bank will be required to follow a code of conduct governing their dealings with the borrower.

4. Giving notice to borrowers

While written communications, telephonic reminders or visits by the Bank’s representatives to the borrower’s place or residence will be used as recovery follow up measures, the Bank will not initiate any legal or other recovery measures including repossession of the security without giving due notice in writing with a provision for acknowledgement. Bank will follow all such procedures as required under the law for collection of dues/repossession of security. The number of days to be given as notice needs to be mentioned and it should stipulate the minimum time that will be given to the borrower to pay the debt failing which possession of the security will be taken by the Bank. However, if the borrower deliberately avoids acknowledging or establishing contact with the Bank then the Bank will be free to proceed with the repossession of the security.

5. Repossession of Security

Repossession of security is aimed at recovery of dues and not to deprive the borrower of the property. The recovery process through repossession of security will involve repossession, valuation of security and realisation of security through appropriate means. All these would be carried out in a fair and transparent manner. Repossession will be done only after issuing the notice as detailed above. Due process of law will be followed while taking repossession of the property. The Bank will take all reasonable care to ensure the safety and security of the property after taking custody, in the ordinary course of the business and necessary cost will be charged to the borrower.

6. Valuations and Sale of Security

Valuation and sale of property repossessed by the Bank will be carried out as per the law and in a fair and transparent manner. The Bank will have the right to recover from the borrower the balance dues if any, after the sale of property. Excess amount if any, 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. The Bank will give a notice before proceeding with the sale. Giving notice before taking possession of the property should not be construed as notice for sale.

In the case of hypothecated security, after taking possession, a pre-sale notice is sent to the borrower providing 7 days for the payment. If no payment is received within 7 days of pre-sale notice, the sale of the hypothecated security will be arranged by the Bank, in such manner as deemed fit by the Bank. In respect of cases under SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act, as per the provisions of the Act, a notice will be issued to the borrower providing 30 days for the payment. When sale by public auction (e-auction or other modes) is anticipated as per the SARFAESI Act, a notice will be published in two leading newspapers out of which one would be a local vernacular newspaper. The secured assets possessed under the SARFAESI Act, will be displayed and updated on the Bank’s website on a monthly basis.

7. Opportunity for the borrower to take back the security

As indicated earlier in the policy document, the Bank will resort to repossession of security only for the purpose of realisation of its dues as the last resort and not with the intention of depriving the borrower of the property. Accordingly, the Bank will be willing to consider handing over possession of the property to the borrower any time after repossession and before concluding the sale transaction of the property, provided the dues are cleared in full. If satisfied with the genuineness of the borrower’s inability to pay the loan instalments as per the schedule, which resulted in the repossession of security, the Bank may consider handing over the property after receiving the instalments in arrears. However, this would be subject to the Bank being convinced of the arrangements made by the borrower to ensure timely repayment of the remaining instalments in future.

If the amounts are repaid, either as stipulated by the Bank or dues settled as agreed to by the Bank, possession of seized security will be handed back to the borrower after permission from the competent authority of the Bank or Court/Debt Recovery Tribunal (DRT) concerned if recovery proceedings are filed and pending before such forums.