Professional Documents
Culture Documents
Collection Policy
February 2017
Corporate office Address:
Grape Garden, No. 27, 3rd A Cross, 18th Main
Koramangala 6th Block, Bengaluru 560 095
This document is for Internal Uses only and may not be reproduced in any form without the consent of
Ujjivan Small Finance Bank Ltd
Confidential
Policy Approval Committee
Samit Ghosh Chief Executive Officer & Managing Director
Sneh Thakur Head of Credit and Collections -‐ Microfinance
Arunava Banerjee Chief Risk Officer
Srikumar Vadake Varieth Head of Legal
Premkumar G Chief Vigilance Officer
Alagarsamy A P Head of Audit
Carol Furtado Head of HR & Service Quality
Sridhar Mallu Head of Credit -‐ Housing & MSE
Proposed by
Sneh Thakur Head of Credit and Collections -‐ Microfinance
Sridhar Mallu Head of Credit -‐ Housing & MSE
Vijay Kumar National Collections Manager
Detailed WF.xlsx
...................................................................................................................................... 105
26.1. ANNEXURE 5: IC4 Auto Report formats ................................................................................ 107
accounts.
► The Loan Review Mechanism to be triggered on detection of early warning signals to ensure
account, towards the collection, recovery and resolution of loans through rehabilitation,
compromise settlements etc.
The repayment schedule for any loan sanctioned by USFBL is fixed taking into account repayment
capacity and cash flow pattern of the borrower. The USFBL explains to the customer upfront the
method of calculation of interest and how the Equated Monthly Instalments (EMI) or payments
through any other mode of repayment are appropriated against interest and principal due from
the customers. The USFBL expects the customers to adhere to the repayment schedule agreed to
and approach it for assistance and guidance in case of genuine difficulty in meeting repayment
obligations.
The USFBL’s Security Repossession Policy aims at recovery of dues in the event of default and is
not aimed at whimsical deprivation of the property. The policy recognizes fairness and
transparency in repossession, valuation and realization of security. All the practices adopted by
the USFBL for follow-‐up and recovery of dues and repossession of security are in consonance with
the Law. The security repossession procedure is set in motion only after all attempts by the USFBL
to discuss with the borrower the ways and means to overcome the financial hurdles/default in
payment have failed. As an exception, it is to be noted that the USFBL has the right to possess
► Ujjivan's recovery procedure shall be based on good manners, impartial treatment and
persuasion.
► Ujjivan shall treat its defaulters with respect and dignity.
► All communications to the customer are in writing, by telephone or through personal visit. The
customer is contacted by telephone on the numbers (residence/work place/mobile) provided
by him/her in the application form filled in at the time of taking the loan/modified
subsequently as intimated to the USFBL. If the customer is not responding/not reachable over
telephone or not paying even after telephonic request, the USFBL's representatives make
personal visits to the customer's residence/workplace during reasonable hours of the day.
► Ujjivan shall contact people other than the Borrowers only to locate the borrower
► The USFBL staff or any person authorized to represent the USFBL in collection of dues or/and
security repossession identifies himself / herself and displays the Identity card/authority letter
issued by the USFBL upon request.
► Representatives of Ujjivan will not harass or abuse borrowers with threats or offensive
mannerisms /language at given time
► The USFBL is committed to ensure that all written and verbal communication with its
borrowers are in simple business language and the USFBL adopts civil manners for interaction
with borrowers
► Ujjivan shall follow only ethical practices and will not resort to unduly coercive tactics in the
process for recovering NPAs.
► Normally the USFBL’s representatives will contact the borrower between 0700 hours and
1900 hours, unless the special circumstance of his/her business or occupation requires the
USFBL to contact at a different time.
► Tele callers of call-‐centres will ensure simple business language, decorum and persuasion
while making follow-‐up calls
► Borrower’s requests to avoid calls at a particular time or at a particular place are honoured as
far as possible.
► The USFBL documents the efforts made for the recovery of dues, as far as possible and the
copies of communication sent to customers, if any, are kept on record
► All assistance is given to resolve disputes or differences regarding dues in a mutually
acceptable and in an orderly manner
► Inappropriate occasions such as bereavement in the family or such other calamitous occasions
are avoided for making calls/visits to collect dues
► Up-‐to-‐date details of the recovery agency if engaged by the USFBL are displayed at its website
1.5. Collection Organization Hierarchy: Micro Finance GL & IL & Housing &MSE
1
Refer to the SFB’s Risk Management Governance Policy for further details on the RMCB
Nadonal Manager
Collecdon & Recovery
Cluster Manager-‐
Collecdons
Officer-‐ Collecdon
2. MICRO FINANCE-‐ GROUP LENDING
CROs are primarily responsible for both sales & collections of JLG loans. They are the 1st point of
contact to all group lending borrowers. The supervisory structure from CRM to AM shall get
involved in the collection process at various default category stages. Accountability, customer
follow ups &co allocation of accounts have been explained in detail in this section.
• CRM should collect a request letter from the customer along with the claim documents
If the customer wishes to settle her loan through insurance settlement
1. Customer will not be forced to pay the immediate outstanding EMI due. The EMI falling
due on the subsequent month will be collected at the center meeting as per the existing
process. The overdue EMI will reflect as an overdue till the tenure of the loan. However if
the customer wishes to clear the previous overdue or close the existing loan, she may do
so at her convenience.
2. On intimation from the insurance company, the cheque issued by the customer will be
sent for clearing by the insurance team.
3. On realization of the cheque the loan account will be closed.
4. If the cheque is dishonored then the insurance team will intimate the concerned branch
supervisors by email
5. On receipt of intimation the branch team will follow up with the customer for collection of
outstanding loan amount.
6. If the branch team is unable to recover they will input appropriate remarks against the
customer in Indus Collection software (IC4), which will require authorization by the CRM.
7. All cases reported as Intentional defaulters will get allocated to Collections team
automatically on Indus Collections software (IC4).
Customers will be eligible for a repeat loan in accordance with the existing credit policy
guidelines. It is important to note that the repayment history of the customer’s previous loan
(during the demise of the spouse) shall have no bearing on the sanctioning of her new loan,
provided pre-‐closure or repayment has happened in accordance with the above defined process.
The primary responsibility of overdue collection lies with the branch staff. Cases are co-‐allocated
to other functions based on reasons/criticality of each case as authorized by the distribution
supervisors:
Overdue
Activity Responsibility Monitoring Account allocation in IC4
Bucket
All overdue accounts
Day 1 CRO/LO CRM CRO,CRM
appear in IC4
CRM to monitor the
1 to 7 days collection and visit the CRO/CRM CRM/CBH CRO, CRM, CBH
customer.
Nonstarter cases CRO, CRM, CRM, Cluster
Day 8 allocated to field Field Credit Credit CRO,CRM , FCO
credit team Officer (FCO) Manager
Auto escalation made
8 to 30
to next 2 supervisory CBH/AM AM CRO, CRM, FCO, CBH, AM
days
levels based on reason
> 90 Days
Officer-‐ Area CRO, CRM, field credit
with >75% Allocation to field
Collections manager-‐ team, CBH, AM, Collection
of OSP Collection team
Micro finance Collection team
cases in GL
Legal Legal action initiated Collection RVM CRO, , CRM, , field credit
For difficult accounts multiple reminder notices can be sent to the customers as below. The
branch team can raise a request in IC4 and regional office will send across the notices to the
customer.
Reminder Notice GL
First reminder notice 8 to 30 days
Second reminder Notice 31 to 60 Days
Final reminder notice 61 to 90 days
► Individual defaults
► Technical defaults
► Defaults caused by Fraud and Mass Defaults
Type of Default Action Plan Person Responsible
Individual Defaults
Temporary repayment Cause shall be investigated and LO and CRM
problem Constant follow-‐up with
1. Late receipt of salary borrower/co-‐borrower shall be
2. Illness of a family conducted to collect the dues.
member
3. Sudden cash needs
Long – term repayment LO shall investigate the cause and LO and CRM
problem escalate to CRM.
1. Death of an earning CRM shall analyse the situation
member and keep in constant touch with
2. Loss of job or the customer until his/her
Accident leading to situation improves.
permanent disability And depending on the actual
of an earning situations also provide an option to
member reschedule the loan.
3. Serious illness of a
family member
4. Natural calamity
leading to loss of
assets
5. Multiple borrowings
6. Major business
downturn including
crop loss, Cattle
1 to 7 Days ! ! 3 ! ! X X X X X X X
8 to 30 Days ! ! ! ! ! X ! X X X X
31 to 60 Days ! ! ! ! ! ! ! ! ! X X
61 to 90 Days ! X ! ! ! ! X ! ! X X
91 to 180 Days X ! X ! ! ! X ! ! ! !
>180 Days X ! X ! ! ! X ! ! ! !
• Abscond cases and sub-‐lending/ ghost loans/mass default can be allocated to collections
immediately if authorized by distribution supervisor within 15 days of default in IC4; else
auto allocation on Day 15
• All cases >30days DPD will be allocated to field collections in IC4
• Deceased Spouse Insurance Settled cases, If nominee is a willful defaulter, it can be
allocated to collections
Different types of legal actions will be initiated as follows -‐
4.1. Introduction
A Loan Officer (LO) shall represent Ujjivan in collection and secured assets repossession. The
process would follow the guidelines set out below:
► The customer would be contacted ordinarily 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 persons authorized to represent ujjivan for follow up and recovery of
dues would be made known to the borrowers at the first instance. Ujjivan staff or any person
The recovery mechanisms for retail products like LAP, Individual/Personal Loans will be as
mentioned in section 4.4 of this policy
The recovery mechanisms for MSEs will include Rectification & Restructuring and in case these
options are seen as not feasible, due recovery options will be resorted to as stated in section 4.4
of this policy
When Ujjivan prefers to utilize the services of recovery agents for collection of dues and
repossession of securities, Recovery agents will be appointed as per the regulatory guidelines6
issued in this regard in this respect:
4
Master Circular on Wilful Defaulters
https://www.rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=9044
5
"Agent" in this Policy would include agencies engaged by the SFB and the agents / employees of the concerned agencies.
6
RBI Circular on Recovery Agents engaged by Banks
https://www.rbi.org.in/commonman/English/Scripts/Notification.aspx?Id=347
7
RBI Master Circular on Wilful Defaulter
https://www.rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=9044
8
Refer RBI Master Circular on Wilful Defaulter
Hence, the above scheme is a very important tool which can be effectively used against the
willful defaulters of Ujjivan, to persuade them to settle their dues.
10
As per RBI Master Circular on Wilful Defaulters RBI/2015-16/100 DBR.No.CID.BC.22/20.16.003/2015-16 dated July 1, 2015, the
“Committee will be headed by an Executive Director or equivalent and consisting of two other senior officers of the rank of GM / DGM”.
https://www.rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=9907
11
RBI Master Circular on Wilful Defaulters RBI/2015-16/100 DBR.No.CID.BC.22/20.16.003/2015-16 dated July 1, 2015
Ujjivan shall use any of the following broad methods for management of problem accounts:
The rehabilitation approach will generally be adopted provided Ujjivan is satisfied that:
► Eligibility criteria and regulatory guidelines with respect to restructuring are fulfilled
► The loan has become an NPA due to factors other than lack of integrity on the part of the
promoters.
► Genuineness of the obligor and viability of the proposal is established
► There is prima facie case for considering such a proposal.
The following steps can be taken to rehabilitate the unit so that it may gain enough strength to
service the borrowings over a period of time:
4.13.2.1.Repayment holiday is a special provision which shall be given to customers who are
exposed to economic losses caused by natural or man-‐made disasters; eg: demolition
drives from the Govt, flood or fire destructions or sudden strikes or bandhs. As an instant
relief measure, customers shall be allowed to skip a maximum of 90 days depending on
the extent of distress caused to the customer and the surroundings.Corrective Action
Plan for MSEs13
Rectification-‐ This approach will be adopted by Ujjivan after:
► Obtaining a commitment, specifying actions and timelines, from the borrower to regularize
the account so that the account comes out of the SMA status or does not slip into the NPA
category.
12
Further details contained in the Credit Policy Manual of loan products
13
Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs)
https://rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=10304
Details of MSME account monitoring and subsequent CAP are covered in the Credit Policy
14
Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs)
15
Master Circular on Wilful Defaulters
https://www.rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=9044
16
Details of the committee as required by the RBI Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises
(MSMEs) are covered in the Credit Policy
► Freeze the exposure at the existing level after serving due notice
► Impose cut-‐backs on regular credit
► Modify margin requirements to reduce drawing power
► Enhance the security cover by insisting on additional collateral, personal guarantees of
promoters etc.
► Opt for settlement of the exposure, if necessary at a discount
► Sell down to Asset Reconstruction Company (ARC) / other entities
18
Refer RBI Guidelines on One-Time Settlement Scheme for SME Accounts, RBI/2005-06/153 RPCD.PLNFS. BC.No.39 / 06.02.31/
2005-06 dated September 3, 2005
It is also an established practice in Banking Industry to Sell NPAs on portfolio-‐basis/segment-‐wise
viz., Retail Credit advances such as: Housing Loans, Vehicle loans etc. Individual accounts under
these segments though small in value but very voluminous in nature warranting valuable time of
Ujjivan for follow-‐up and recovery.
It is also observed recently that there are situations where majority of the lenders have classified
the accounts as NPA with a few lenders classifying the said account as Standard Assets. There are
also situation where majority of the lenders have classified financial assets as SMA-‐2 which is
reported to Central Repository for Information on Large Credit as per RBI guidelines19 and is
expected to become NPA within a short period. In order to reap higher return from ARCs, RBI is
encouraging banks to consider sale of such assets at the initial stage and has offered incentive by
spreading the losses over a period of two years.
The basic strategy underlying the approach to management of problem accounts is to focus on
initiation of appropriate preventive corrective action at the right time. All stressed accounts shall
be closely and continuously monitored.
For proposals backed by Govt. sponsored schemes, waiver of legal action shall be obtained from
one level higher than the sanctioning authority
Write-‐offs for Housing and MSE loans shall be approved by the Head of Credit -‐ Housing & MSE.
All cases identified as fraud by Regional Fraud Management Committee with POS >Rs 100000
shall require approval from CEO & MD.
The moment a SARFAESI proposal is approved by NCM as recommended by Collection Manager:
Authorized Officer (AO) from Legal department shall be identified who should assume ownership
of the account. It is the responsibility of the AO to ensure that the time frame for taking the
SARFAESI proceedings forward are strictly adhered to.
Steps that shall be followed while invoking the SARFAESI are:
20
http://www.drat.tn.nic.in/Docu/Securitisation-Act.pdf
All legal actions / recovery actions shall be approved by the designated approval authorities as per
the Delegation of Authority of the USFBL. In cases of willful default, (e.g. diversion and siphoning
of funds), fraud and malfeasance on the part of the borrower, legal action may be the first and
only option for recovery, as any other option of recovery would not be appropriate.
The following steps can be initiated in respect of such borrowers.
5.1. Guidelines on seizure / repossession of assets hypothecated to Ujjivan
All assets hypothecated to Ujjivan may be seized / repossessed subject to the following:
21
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
http://www.drat.tn.nic.in/Docu/Securitisation-Act.pdf
22
Refer Order XXXVIII, Arrest And Attachment Before Judgement, The Code Of Civil Procedure, 1908
Criminal proceeding under section 138/Sec 25 of NI act 1881 & 2002& Section 25 in The Payment and
Settlement Systems Act, 2007
A drawer (customer) would have committed an offence under this act which is punishable by law provided
a cheque/ECS issued by him to the payee USFBL in discharge of any debt or liability is returned unpaid
(bounced) by the drawee (customer USFBL) for insufficient funds in the customer account or the cheque
amount exceeds the arrangement the customer has with his bank to honor the cheque.
Procedure
Steps Description
• If the EMI cheques/ECS presented for payment towards loan
Initiation
liability on behalf of the customer returns unpaid from the bank
due to insufficient funds or exceeds arrangement, then a cause
• Promissory Note executed in one State may be presented in another State in India with
the stamp bearing on the promissory note. No additional stamp duty need to be paid
• PN has TIME validity. The Promissory Note is valid for only 3 years from the date of
execution
• Upon default by the customer, a formal notice to be send giving 7 days’ time to repay the
due
• If the customer doesn’t pay within 7 days of notice receipt, then based on the delivery
acknowledgement of notice received by the company, immediately civil suit will be filed in
the court by our empaneled advocate
• After filing of the case, a date is fixed by the court for verification/sworn statement of the
complainant in relation to the complaint. The Power of attorney holder (which is a
company official i.e. the Legal manager/officer) gives a statement confirming the facts of
the case in court w.r.t case. The key confirmations are existence of debt, cheque returning
unpaid due to insufficiency of funds, adequate notice & time given to customer for
payment on demand which has not been honored.
5.5. LokAdalat
LokAdalat is a system of alternate dispute resolution. The lokadalat (people’s court) settles
dispute through conciliation and compromise. The courts will be presided by sitting judge or by
retired judge, social activists, or members of legal profession if so designated by competent court
or by state government. However, it does not have jurisdiction on matters related to non-‐
compoundable offences.
Procedure:-‐
Steps Description
Making an application in case of Any party to a dispute will, before the dispute is
brought before any Court, make an application to the
existing litigation Permanent LokAdalat for the settlement of dispute. It
is written statement with all the facts of the case &
nature of dispute and is submitted with all necessary
proofs. Dates for lokadalat are fixed at locations
Making an application in case of pre Any party, which is aggrieved by some action of non-‐
performance of some act as per the agreement, will file
litigation: necessary application duly signed by the Power of
Attorney holder for referring their dispute to a
LokAdalat. A single application also will be filed where
there are a number. of opposite parties/customers.
The application is filed before the District Judge or The
Secretary, District Legal Service Authority.
Claim petition and issue of summons Notices are to be prepared by the Counsel on the
format prescribed by the authority for all the
customers against whom the proceedings are
intended. Thereafter all the notices shall be stamped
and signed by the concerned officer of the authority.
Dispatch of notices to the defaulters is done through
speed post, courier, police personnel, and even by
Procedure: -‐
• The tribunal consists of one person who is the presiding officer appointed by the
government.
• The USFBL will make an application to the tribunal within local limits of jurisdiction where
the customer is residing or carrying on business. Other banks may also join the application
if it has to recover dues from the same party.
• Tribunal will issue summons to the customer on receipt of application asking him to reply
within 30 days as to why relief requested by the bank/institution should not be granted.
• The defendant (customer) will file a written statement within the stipulated time in his
defense including making a counter claim.
• The applicant (bank) will have the right to file a written statement in reply to the counter
claim of the defendant.
• The Tribunal has the right to pass an interim order (injunction or attachment) ordering the
customer not to transfer or dispose off assets without permission of the tribunal. In some
cases, it will ask the defendant to furnish some security to satisfy recovery of debt.
• The tribunal after hearing the appeal of defendant and will pass a final order.
• The presiding officer will issue a certificate for debt recovery based on the final order to
the tribunal recovery officer.
• The aggrieved party will appeal against the DRT order to the debt recovery appellate
tribunal (DRAT) within 45 days of receiving the order.
• Appeal to DRAT is allowed only after depositing 50/75% of the dues as decided by the DRT.
• On receipt of the order, the recovery officer of the tribunal will recover debt either:-‐
(a) By attaching and sale of the movable or immovable property of the defendant;
(b) By arresting the defendant and his detention in prison;
The guidelines related to the Collection mechanisms for loan products offered by Ujjivan are as
stated below:
6.4. Opportunity for the borrower to take back the secured assets
• Ujjivan shall resort to repossession of secured assets only for the purpose of realization of
its dues as the last resort and not with intention of depriving the borrower of the secured
assets.
• Ujjivan shall be willing to consider handing over possession of secured assets to the
borrower after repossession and before concluding sale transaction of the secured assets,
provided Ujjivan dues are cleared in full.
• If satisfied with the genuineness of borrower's inability to pay the loan installments as per
the schedule, which resulted in the repossession of secured assets, Ujjivan may consider
handing over the secured assets after receiving the installments in arrears. However this
would be subject to giving an undertaking by the borrower to repay the remaining
installments / dues in future and to maintain the loan account as performing asset until
closure of the account as per the terms of the loan agreements(s) to the satisfaction of
Ujjivan.
• If the amounts are repaid, either as stipulated by Ujjivan or dues settled as agreed to,
possession of seized assets shall be handed back to the borrower within 15 working days
Workflow:
Introduction:
Non-‐starter Definition:
A Non-‐starter is a customer who intentionally fails to repay one or all of the first four
installments.
Other Points:
• **Occurrence of non-‐starters is defined as follows: Number of loans in default with first
four installments yet to be fully recovered. Eg: Second account appears in non-‐starter
when the first non-‐starter is yet to be regularized/is partially collected.
• *Employee will start receiving incentives from the month the accounts get regularized.
(previous month incentives shall not be paid out as arrears)
Non-‐starter loan under Secured and unsecured individual lending:
Lending Loan Originator Non-‐Starter Actions
Type occurrence**
All individual records of persons originating the loan/conducting house visit and GRT will be
tracked in CBS and Credit and HR will be responsible to initiate disciplinary action through HR
Regional committee
^Important Note: Any severe negligence (Conditional) leading to loss of reputation or monetary
shall be considered for recovery of loss amount from employee FFS.
Recovery of the loss amount from the employee final settlement shall be conditional^.
Financial distress caused by death of earning member, natural calamities or act of nature /
accidents caused by fire & any other act that has an impact on livelihood of the customer and
business.
Mass default caused by community issues or any other such external factors
9. COLLECTION STRATEGIES FOR MASS DEFAULT BRANCHES
Mass Defaults are cases of defaults encouraged by local stakeholders in society such as religious
heads, caste based organizations and local politicians etc. These are often initiated by local ring
leaders. They can potentially get together customers not to repay by spreading false rumors
regarding the lending institutions and or deliberately instigate customer not to pay on religious,
caste or political grounds.
• CRO/LO should update this information in collection software and which will be
immediately notified to the Branch manager.
• CRM should visit the area which is possibly affected by mass default and talk to the
customers and understand the situation. CRM should update his remarks in IC4 confirming
the mass default situation and inform his next 2 level supervisors
• CBH (Cluster Branch Head) and AM of the branch to thoroughly discuss the situation with
branch team and authorise the mass default remarks in IC4.
• RBM, RCM, RVM, RRCM Head of Microfinance & Branch Banking and Head of Credit and
Collections – Microfinance shall be notified immediately and action will be taken on a case
to case basis
Status of all mass default branches with action plan should be discussed in RLTs. RBM & RCM to
present the summary of affected branches to management as part of monthly business
presentation.
10. REPAYMENT MODE
Modes of repayments:
Customer can opt for any of the following mode of payments.
• All payments collected by the collectors in a day must be handed over to the cashier on
the same day.
• If the overdue is collected within 7 days of due date the relationship officer needs to
update the transactions in handheld device.
• All greater than 7 days overdue collection needs to be handed over to Cashier.
• All the collection entries posted in the Core system will be supervised by the branch
manager.
For all the cash payments collected in a day, the collector must deposit the cash with Branch on
the same day. All Cheque / DD’s collected by the collector needs to be deposited with the Branch
with proper acknowledgement, record of which needs to be filed at the DCA/ IC4
Receipt Audit:
Periodic audit on receipts shall be done by the internal auditors of Ujjivan. Any discrepancies
found will be highlighted to the Distribution supervisors/Collection Managers for corrective
actions.
11. RECEIPT BOOK PROCESS – for field collections
Regional/ Collections Manager will be responsible for the indent and record maintenance.
PROCESS FLOW:
3) Numbers of receipt books issued, should be tracked collection officer-‐wise
4) Concerned staff should obtain signature of Cashier/CRM on the book copy of each receipt
while handing over cash for the overdue amount collected on the field
5) Concerned staff should send the details of issued receipt numbers as per the format in
ANNEXURE I to the respective Regional collections Manger every month
6) The used receipt books should be handed-‐over to Collections Manager at their respective
offices for custody and should be made available during audit period
12.1. Introduction
• Indus collection system (IC4) is Ujjivan’s collection management system. The collection
system will have pre-‐configured workflows to manage a variety of collections processes
like pre-‐emptive dunning, Tele-‐calling, Field visits, write off, repot viewing etc. In Addition,
IC4, as a system has both Mobile and Web Interfaces with field staff using the Mobility
platforms and Supervisory/back-‐end teams using the Web Interfaces
CRO/LO/RO will get to see accounts mapped to them with complete details
Collection Officers will get details of all cases allocated to them centrally
Designation Responsibilities
CRO/LO/RO • Should mandatorily log in to the mobile IC4 app at the start of
the day
• Fetch current overdue data from menu button after log in
• Study the Customer follow up history in the Stat Card prior
visit
• Input reasons for Overdue during the visit (Standard reasons
Annexed)
• Updated contact number and/or address to be captured in
case of changes
• Immediately after the visit, mark complete in the main menu
and synch data
• Data synch is mandatory at the end of every business day
CRM/ACRM • CRM can access overdue details on Mobile as well as web
• CRM will get an automated email every day morning from IC4
with the following details
Collection officer • Responsible for collection of GL, IL & Critical cases as per
allocations made on Indus by the Collections Manager
Cluster/collection • Ensure monthly allocation of accounts to Collection Officers,
manager monitor efficiency and co-‐ordinate with the legal team for
legal cases
Tele-‐calling Team • Call CRMs and CROs for cases not updated in IC4
• Call Individual Lending Customers >7 days and input remarks
in IC4
• Resolve technical overdue, if any, as reported by the branch
team in IC4
• Collection reminder notices to GL & IL OD clients through IC4
as requested by the Branch. Pop ups will appear as per the
matrix shown in product wise work flow
• Prioritization of pop-‐ups during Tele-‐calling will vary with the requirement of the Tele-‐
calling phases. During the normal Tele-‐calling period, the aim will be to maximize
coverage/contacts, elicit Post Pones and follow-‐up on accounts requiring call back. The
priority of pop-‐ups during the period will be:
Field collection Officers– Collections >30 Days DPD 1 CO for 70 accounts
Cluster Manager –
Field collection All Buckets 1 CCM for 6-‐7 CO
Collections
Area Manager-‐
Field collections All Buckets 1 ACM for 6 – 7 CCM
Collections
Field collections Regional Manager All Buckets 1 RCM for every region
Any exception approval on charges waive off shall require approvals from Credit Policy
committee.
Head of Credit and Collections – Microfinance shall be the final approval authority for writing off
all loans in Microfinance GL & IL. However cases identified as Fraud by regional fraud
management committee with POS greater than Rs 1 lacs requires final approval from CEO & MD.
• Cases that exceed > 180 days can be recommended for Write off
• Death (Not claimable)/Suicide can be written off before 180 days
Step 2: Field credit officer to visit customers and submit a recommendation to the Credit Manager
Step 3: Based on the FCO recommendation, Credit to send the final list of write of cases to the
branch.
Step 4: CRM, FCO, CBH/AM/DM to visit customer and complete “write off Memo.”
Following documents to be verified and copies submitted to RO along with form:
Death: Verify with group members / relatives / neighbors. Collect death certificate
•
Over indebtedness: Copy of Loan Cards of all live loans
•
Daily Collections Report: Attaching a copy of the DCR with the form is mandatory (Not
•
required if the trials are available in IC4)
Step 5: Regional Credit Department to verify documents
Step 6: RBM to verify documents and sign off the form
Step 7: RCM will then verify all the recommendations and take a decision & sign off. It is then sent
to the Business Heads and Head of Credit and Collections – Microfinance.
Step 8: Head of Credit and Collections – Microfinance has the ultimate Authority to take final call
on write off loans.
Credit will pass on the write-‐ off memos to Operations and ensure appropriate entries are passed
in the respective General Ledger to close the customer’s account.
Backend process for write offs:
1. CRM/ Branch head to initiate the write off for >180 days cases. Write off process can be
initiated before 180 days under special circumstances.
2. Initiation request from CRM/ Branch head shall be authorised by next 2 level supervisors
in distribution.
3. Authorised write off requests will appear to area collection manager who will assign the
cases to final visit from a collection officer.
4. Collection officer to visit the case and provide his remarks
5. Area collection manager to review the write off request and approve the case for next
level approval.
6. The write off request to go through the following approval authorities
a. RBM
b. RCM
c. NCM
d. Business Head
e. Head credit.
7. Final approvals: Head credit will be the final authority in approving all write off requests.
Post Head credit approvals a write off trigger will be send from IC4 to core system.
8. Operations team to pass the write off entries in system as per the write off trigger
received in core system
Post recovery of written off accounts, entries are passed in the system using “Write off recovery
module” which is available in the software. The current system allows passing the entries of
written off account post recovery to the written off Loan ID only thereby eliminating the earlier
procedure of posting entries to the GL account.
When a bad debt is recovered post write off, the write off recovery module of Br.Net shall be
used to pass customer specific entries.
• Loans write offs are done through module Loan write off in the software post August,
2012.
• Reasons for write offs should be selected from the drop down available in the module.
• Select “Is recoverable” screen in the module if the due is recoverable post write offs.
• Only the OSP amount will be written off.
Loans which are recovered post write off post, recovery amount will be posted in the module
“Write off recovery” account ID wise(Only for loans which are written off post August 2012
through Loan write off module) eliminating the earlier procedure where the postings were done
through GL account.
Introduction
With the increasing numbers of staff loan ODs, the present recovery process will be followed for
effective supervision and control of staff loan ODs.
Objective:
The basic objective of the process is to establish practical guidelines to be followed by the related
parties/ relevant departments in the event of reporting of staff loan OD. The revised process also
aims at originating preventive steps by the company before the actual OD is reported in the
books.
Responsibility:
The primary responsibility in recovering the over dues lies with the Regional HR Department.
However, the Regional HR Department will work closely with the Regional Collections & Vigilance
Department for cases beyond 60 days for initiating Legal actionable and closure thereof.
Classification of Staff Loan ODs:
Staff Loan ODs generally arises on account of any of the following reasons and can be broadly
classified as Pre and Post staff Loan ODs:
1. Employee Resignation
2. Female Employee on Maternity Leave
3. Employee Death
4. Employee Termination/ Employee abscond/Employee Fraud/willful default by Employee
Unsecured Loans
Asset classification
Days past due
GL
IL
MSE Unsecured Loans
Standard asset 0-‐ 07 days Min 0.65% Min 1% Min 1%
Standard asset 8-‐ 30 days 5% 5% 5%
Standard asset 31-‐ 60 days 30% 30% 30%
Standard asset 61-‐ 90 Days 50% 50% 50%
Substandard asset 91-‐ 180 days 80% 80% 80%
Substandard asset 181-‐360 Days 100% 100% 100%
Substandard asset >366 Days 100% 100% 100%
Rescheduled Loans 50% 50% 50% 50%
Total minimum Provisions on total portfolio 1% 2% 1.5%
Secured Loans
23
Please refer Ujjivan NPA Policy for details.
___<Insert Address line 1>_______________ Branch < Insert Branch ID& Name >
Customer ID < Insert Customer ID>
___ <Insert Address Line 2>______________
Loan Account No < Insert Account ID >
__<insert Sate and Pin code>_____________ Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
This is to bring to your notice that, your above said loan account is showing an overdue of Rs<Insert
Overdue Amount> from <insert Installment Due date>which is due and payable.
Please arrange to make payment of this account on or before <Insert deadline date>, if you cannot make full
payment at this time, please contact us to make a payment which is mutually acceptable.
Please note that, we are required to share your credit history to Credit Bureau agencies authorized by the
RBI (Reserve Bank of India) and this may impact your ability to avail credit facilities from any other financial
institutions in future. We wish to hence inform you to pay the necessary dues in a timely manner in order
to maintain a clear credit history and enjoy benefits of other financial products.
If the payment has recently been made, please accept our acknowledgement and ignore this memo.
With regards,
Ujjivan Financial Services Ltd
Authorized Signatory
ANNEXURE – B
GL -‐ 2nd Reminder Notice
To,
Date < Insert Notice generated date>
__<Insert Customer Name>______________
Branch < Insert Branch ID& Name >
___<Insert Address line 1>_______________ Customer ID < Insert Customer ID>
___ <Insert Address Line 2>______________ Loan Account No < Insert Account ID >
Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
__<insert Sate and Pin code>_____________ Current outstanding (Rs) < Insert loan outstanding>
We are sorry to note that despite repeated requests, tele-‐calls and personal visits you have defaulted and
failed to repay the monthly installments on their respective due dates.
Please note that, we are required to share your credit history to Credit Bureau agencies authorized by the
RBI (Reserve Bank of India) and this may impact your ability to avail credit facilities from any other financial
institutions in future. We wish to hence inform you to pay the necessary dues in a timely manner in order
to maintain a clear credit history and enjoy benefits of other financial products.
___<Insert Address line 1>_______________ Customer ID < Insert Customer ID>
Loan Account No < Insert Account ID >
___ <Insert Address Line 2>______________
Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
__<insert Sate and Pin code>_____________ Current outstanding (Rs) < Insert loan outstanding>
With reference to our earlier reminders to settle the arrear amount of Rs<Insert Overdue
Amount>which was due to be paid on <insert Installment Due date>, remains unpaid despite of repeated
requests, tele-‐calls and personal visits.
We demand that the payment of the full amount should be made to us on or before <Insert deadline date>.
In the event of non-‐settlement of outstanding, Ujjivan reserves the right to commence legal proceedings to
recover the debt without further notice to you, and you may be responsible for any associated legal fees or
collection costs.
With regards,
Ujjivan Financial Services Ltd
Authorized Signatory
ANNEXURE – D
SHL/IL/MSE -‐ 1st Reminder Notice
To,
Date < Insert Notice generated date>
__<Insert Customer Name>______________
Branch < Insert Branch ID& Name >
___<Insert Address line 1>_______________ Customer ID < Insert Customer ID>
___ <Insert Address Line 2>______________ Loan Account No < Insert Account ID >
Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
__<insert Sate and Pin code>_____________
Current outstanding (Rs) < Insert loan outstanding>
Subject: Notice for payment of overdue amount
This is to bring to your notice that, your above said loan account is showing an overdue of Rs<Insert
Overdue Amount>from <insert Installment Due date>which is due and payable
Please note that due to delay in payment of monthly installment, it has attracted bounce charges and
other contractual charges, which add up to Rs<Insert OD Amount including Charges>. Please arrange to make
payment of this account on or before <Insert deadline date>, if you cannot make full payment at this time,
please contact us to make a payment which is mutually acceptable.
ANNEXURE – E
SHL/IL/MSE -‐ 2nd Reminder Notice
To,
Date < Insert Notice generated date>
__<Insert Customer Name>______________ Branch < Insert Branch ID& Name >
___<Insert Address line 1>_______________ Customer ID < Insert Customer ID>
Loan Account No < Insert Account ID >
___ <Insert Address Line 2>______________
Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
__<insert Sate and Pin code>_____________ Current outstanding (Rs) < Insert loan outstanding>
With reference to the letter dated <1ST Reminder notice date>this is to bring to your notice that, your
above said loan account is showing an overdue of Rs<Insert Overdue Amount>from <insert Installment Due
date>which is due and payable
Please note that due to delay in payment of monthly installment, it has attracted bounce charges and
other contractual charges, which add up to Rs<Insert OD Amount including Charges>. Please arrange to make
payment of this account on or before <Insert deadline date>, if you cannot make full payment at this time,
please contact us to make a payment which is mutually acceptable.
If the payment has recently been made, please accept our acknowledgement and ignore this memo.
With regards,
Ujjivan Financial Services Ltd
Authorized Signatory
ANNEXURE – F
SHL/IL/MSE -‐ Final Reminder Notice
To,
Date < Insert Notice generated date>
__<Insert Customer Name>______________ Branch < Insert Branch ID& Name >
___<Insert Address line 1>_______________ Customer ID < Insert Customer ID>
Loan Account No < Insert Account ID >
___ <Insert Address Line 2>______________
Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
__<insert Sate and Pin code>_____________ Current outstanding (Rs) < Insert loan outstanding>
With reference to our earlier reminders to settle the arrear amount of Rs<Insert Overdue
Amount>which was due to be paid on <insert Installment Due date>,remains unpaid despite of repeated
requests, tele-‐calls and personal visits.
We demand that the payment of the full amount should be made to us on or before <Insert deadline date>.
In the event of non-‐settlement of outstanding, Ujjivan reserves the right to commence legal proceedings to
recover the debt without further notice to you, and you may be responsible for any associated legal fees or
collection costs.
Please visit our branch office nearest to your area as a matter of urgency and settle your account before
the above date.
If the payment has recently been made, please accept our acknowledgement and ignore this memo.
With regards,
Ujjivan Financial Services Ltd
Authorized Signatory
ANNEXURE – G
SHL/IL/MSE -‐ Company Notice/Guarantor Notice
To,
Date < Insert Notice generated date>
__<Insert Guarantor Name>______________ Branch < Insert Branch ID& Name >
___<Insert Address line 1>_______________ Customer ID < Insert Customer ID>
Subject: Payment of remaining overdue amount of your guaranteed customer
Ujjivan hereby would like to bring to your notice that -‐ you have agreed to be the Guarantor for
the loan taken by < Insert Customer Name>agreement dated < Insert Loan Disbursement Date>with your own
With reference to the above subject, this letter is to inform you that your Guarantee’s Individual Loan
taken for the purpose < Insert Loan purpose> from Ujjivan Financial Services Ltd. is overdue from <insert
Installment Due date> to the extent of Rs.<Insert Overdue Amount>. The total outstanding balance of your
Guarantee’s loan is Rs.< Insert loan outstanding>. In this regard you are requested visit < Insert Branch ID& Name
>Ujjivan branch office and pay the overdue amount before <Insert deadline date>, in one shot or in
installments. In the event of any further delay, we will be forced to inform any credit bureau, financial
institution or any agency authorized by the RBI (Reserve Bank of India) as per the loan agreement between
us.
Also failing to this we will be executing legal case against you as per the agreed terms and conditions in the
deed & guarantee signed and submitted by you.
With regards,
Authorized Signatory
ANNEXURE – H
PRAGATHI LOAN -‐ 1st Reminder Notice
To,
__<Insert Customer Name>______________
Date < Insert Notice generated date>
___<Insert Address line 1>_______________ Branch < Insert Branch ID& Name >
___ <Insert Address Line 2>______________ Customer ID < Insert Customer ID>
Loan Account No < Insert Account ID >
__<insert Sate and Pin code>_____________
Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
Current outstanding (Rs) < Insert loan outstanding>
Subject: Notice for payment of overdue amount
Please arrange to make payment of this account on or before <Insert deadline date>, if you cannot make full
payment at this time, please contact us to make a payment which is mutually acceptable.
Please note that, we are required to share your credit history to Credit Bureau agencies authorized by the
RBI (Reserve Bank of India) and this may impact your ability to avail credit facilities from any other financial
institutions in future. We wish to hence inform you to pay the necessary dues in a timely manner in order
to maintain a clear credit history and enjoy benefits of other financial products.
Your prompt attention to this matter would be greatly appreciated. If you have any queries regarding this
account, please contact our branch office nearest to your area.
If the payment has recently been made, please accept our acknowledgement and ignore this memo.
With regards,
Ujjivan Financial Services Ltd
Authorized Signatory
ANNEXURE – I
__<Insert Customer Name>______________ Branch < Insert Branch ID& Name >
Customer ID < Insert Customer ID>
___<Insert Address line 1>_______________
Loan Account No < Insert Account ID >
___ <Insert Address Line 2>______________ Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
__<insert Sate and Pin code>_____________ Current outstanding (Rs) < Insert loan outstanding>
Please arrange to make payment of this account on or before <Insert deadline date>, if you cannot make full
payment at this time, please contact us to make a payment which is mutually acceptable.
We are sorry to note that despite repeated requests, tele-‐calls and personal visits you have defaulted and
failed to repay the monthly installment on the due date.
Please note that, we are required to share your credit history to Credit Bureau agencies authorized by the
RBI (Reserve Bank of India) and this may impact your ability to avail credit facilities from any other financial
institutions in future. We wish to hence inform you to pay the necessary dues in a timely manner in order
to maintain a clear credit history and enjoy benefits of other financial products.
Your prompt attention to this matter would be greatly appreciated. If you have any queries regarding this
account, please contact our branch office nearest to your area.
If the payment has recently been made, please accept our acknowledgement and ignore this memo.
With regards,
Ujjivan Financial Services Ltd
Authorized Signatory
ANNEXURE – J
To,
Date < Insert Notice generated date>
__<Insert Customer Name>______________ Branch < Insert Branch ID& Name >
___<Insert Address line 1>_______________ Customer ID < Insert Customer ID>
Loan Account No < Insert Account ID >
___ <Insert Address Line 2>______________
Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
__<insert Sate and Pin code>_____________ Current outstanding (Rs) < Insert loan outstanding>
With reference to our earlier reminders to settle the arrear amount of Rs<Insert Overdue
Amount>which was due to be paid on <insert Installment Due date>,remains unpaid despite of repeated
requests, tele-‐calls and personal visits.
We demand that the payment of the full amount should be made to us on or before <Insert deadline date>.
In the event of non-‐settlement of outstanding, Ujjivan reserves the right to commence legal proceedings to
recover the debt without further notice to you, and you may be responsible for any associated legal fees or
collection costs.
Please visit our branch office nearest to your area as a matter of urgency and settle your account before
the above date.
If the payment has recently been made, please accept our acknowledgement and ignore this memo.
With regards,
Ujjivan Financial Services Ltd
Authorized Signatory
ANNEXURE -‐ K
LOAN RECALL NOTICE AT 90 DPD
(on Ujjivan letter head)
To,(Name and address of the customer)
Dear Sir/Madam
Inspite of repeated reminders you have failed to adhere to the terms and conditions expressly agreed by
you vide the Agreement entered between us for the said loan and you have failed to maintain the financial
discipline required of you with the said loan. Thus we are constrained to state as under:
That pursuant to the rights vested with Ujjivan Ltd, your entire loan (principal and interest) is being
recalled forthwith.
You are required to make payment the whole of the amount due and outstanding’s by you, under the said
Agreement, to us and amounting to Rs ………… within 7 days from the date of postage of this notice.
In case of non-‐payment by the aforesaid date, we will be constrained to take legal recourse against you
entirely at your risk as to costs and consequences thereof.
No further notice will be given to you in this regard.
Thanking you,
Authorized Signature
ANNEXURE – L
Whereas
Sl Name of the Name of the Description of the charged/ mortgaged Amount O/S as Reserv
N Account & Borrower / property (All the part and parcel of the on date of e Price
o. Branch Guarantor
property consisting of) Demand
(Amt.
(Owner of Notice (Rs.) &
the property) Date of taking in
lacs)
possession
AT UJJIVAN, ………………………..
AT I UJJIVAN, …………………………..
1] Interested parties will send/submit their offers for purchase of the said property in sealed cover super
scribing as "Offer for Sale of Assets at -‐ (write the address of the asset) -‐ A/c. (write the name of a/c. &
Branch)" along with earnest money deposit equivalent to 10% (ten percent) of Reserve Price of the
property by Cheque/Demand Draft favoring the Authorized Officer, Ujjivan payable at ………, which is
refundable, if the bid/tender is not accepted. Offer should reach us latest by the ………….. at the above
mentioned address. Offers without earnest money deposit will summarily be rejected.
2] The successful bidder shall deposit 25% (Twenty-‐five percent) of the bid amount immediately by
Cheque/Demand Draft favoring the Authorized Officer, Ujjivan payable at ……, on the sale being knocked
down in his favor. In case, the successful bidder fails to deposit 25% of the bid amount immediately on the
3] The balance amount of the purchase money shall be paid to the Authorized Officer, Ujjivan on or before
the 15th (fifteenth) day of confirmation of sale in default of payment within the said period, the entire
deposit made by the bidder together with the earnest money shall be forfeited without any notice and the
properties shall be resold.
4] The defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it will
be subsequently sold.
5] All such payments to be made only in the form of cash or Cheques or Demand Draft drawn in favor of
the Authorized Office, Ujjivan.
6] The successful bidder would bear the charges/fees payable for conveyance such as stamp duty.
Registration fees etc. as applicable as per law.
7] The Authorized Officer will not be responsible for any charge, lien, encumbrance, property tax or any
other dues to the Govt. or anybody in respect of the property under sale.
8] The Authorized Officer has the absolute right to accept or reject any tender/bid or adjourn/postpone the
sale without assigning any reason therefor.
10] For Inspection of the property, the intending bidders will contact Ujjivan, …………..during office hours,
latest by …………..
This publication is also a notice of possession cum sale under the above Act to
borrowers/guarantors/mortgagers/owners of the property as mentioned above.
Date : ……
Place: ……….
Detailed WF.xlsx