Union Bank of India is looking to digitise and automate its recovery processes, according to a tender document issued by the lender. It has sought bids from vendors to implement the software solution and maintain it for five years.
“Bank intends to implement a software solution for digitising and automation of recovery portfolio and creating a single platform database solution which should be capable of handling the modules… Bidder needs to design, implement and manage the entire software solution for the period of five years,” the document said.
The various modules which the bank plans to digitise include proceedings under Securitisation and Reinforcement of Financial Assets Act (SARFAESI), debt recovery tribunals (DRTs), the Insolvency and Bankruptcy Code, civil suits, Revenue Recovery Act, Lok Adalat, valuation, insurance, engagement of recovery agents and vehicle loan non-performing assets.
For instance, in case of a corporate insolvency resolution process (CIRP) initiated by the bank, the solution must be able to issue a template-based permission note for filing an NCLT application from the branch to the appropriate authority through the respective office. It should be able to take care of things like forwarding the communication to the advocate from the branch as also to capture the hearing date-wise movement of the case and recovery made during the pendency of the case.
In the vehicle loan NPA module, the solution should capture all such NPA accounts and wherever vehicles have been taken as collateral security. Thereafter, it should enable system-based auto generation of notices to the borrowers as per the timeline prescribed and to send reminders to branches, whenever required.
PSBs have of late been moving to digitise more time-consuming and non business-generating processes. State Bank of India plans to revamp its entire operational set-up for lending to MSMEs with a view to improve turnaround time and customer experience while keeping bad loans in check.
In the first nine months of FY21, Union Bank has recovered NPAs worth Rs 3,523 crore, as compared to recoveries worth Rs 5,174 crore in the first nine months of FY20. Rajkiran Rai G, MD & CEO, told analysts that the bank expects recovery of about Rs 5,000 crore in Q4FY21. “Out of that, about 50% may come from this NCLT resolution account, at least two accounts which are very close to resolution,” he said, as per the transcript available on the bank’s website.