Code for Collection of Dues and Repossession of
Security
1. Introduction:
The Debt Collection Policy of the Bank is built
around dignity and respect to customers. Bank does not follow
policies that are unduly coercive in collection of dues. The policy
is built on courtesy, fair treatment and persuasion. The Bank
believes in following fair practices with regard to collection of
dues and repossession of security and thereby fostering customer
confidence and long-term relationship.
The repayment schedule for any loan sanctioned by
the bank will be fixed taking into account paying capacity and cash
flow pattern of the borrower. Bank will explain to the customer
upfront the method of calculation of interest and how the Equated
Monthly Installments (EMI) or payments through any other mode of
repayment will be appropriated against interest and principal due
from the customers. The Bank would expect the customers to adhere to
the repayment schedule agreed to and approach the bank for
assistance and guidance in case of genuine difficulty in meeting
repayment obligations.
Bank'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. The repossession procedure would be set in motion only
after attempts by the bank to discuss with the borrower the ways and
means to overcome the financial hurdles have failed. All the
practices adopted by the bank for follow up and recovery of dues and
repossession of security will be in consonance with the law.
2. General Guidelines:
All the members of the staff or any person
authorized to represent our Bank in collection or/and security
repossession would follow the guidelines set out below:
1. 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.
2. Identity and authority of persons authorized
to represent bank for follow up and recovery of dues would be made
known to the borrowers at the first instance. The bank staff or any
person authorized to represent the bank in collection of dues or/and
security repossession will identify himself / herself and display
the authority letter issued by the bank upon request.
3. Bank would respect privacy of its borrowers.
4. Bank is committed to ensure that all written
and verbal communication with its borrowers will be in simple
business language and bank will adopt civil manners for interaction
with borrowers.
5. Normally the bank's representatives will
contact the borrower between 0700 hrs and 1900 hrs, unless the
special circumstance of his/her business or occupation requires the
bank to contact at a different time.
6. Borrower's requests to avoid calls at a
particular time or at a particular place would be honored as far as
possible.
7. Bank will document the efforts made for the
recovery of dues and the copies of communication sent to customers,
if any, will be kept on record.
8. All assistance will be given to resolve
disputes or differences regarding dues in a mutually acceptable and
in an orderly manner.
9. Inappropriate occasions such as bereavement in
the family or such other calamitous occasions will be avoided for
making calls/visits to collect dues.
3. Giving notice to borrowers
While written communications, telephonic
reminders or visits by the bank's representatives to the borrowers
place or residence will be used as loan 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 to
the defaulting borrower. Bank will issue demand notice with
acknowledgement to the defaulting borrowers and guarantors, calling
upon them to discharge their dues within 30 days from the date of
notice, failing which the bank will proceed to take possession of
the asset. If the customer deliberately avoids acknowledging or
establishing contact with the bank, then the bank will be free to
proceed with the repossession of the security. Bank will follow all
such procedures as required under law for recovery/repossession of
security including recovery of bank's dues under SARFAESI Act, 2002.
4. 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 realization 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 for ensuring the safety and security of the property
after taking custody, in the ordinary course of the business.
5. Valuation and Sale of Property
Valuation and sale of property repossessed by the
bank will be carried out as per law and in a fair and transparent
manner, after giving due notice of the time, date and venue of the
auction to the borrower/mortgagor. The bank will have right to
recover from the borrower the balance due if any, after sale of
property. Excess amount if any, obtained on sale of property will be
returned to the borrower/mortgagor after meeting all the related
expenses provided the bank is not having any other claims against
the customer. The bank's right to general lien and its implications
would be adequately made clear to the customer at the time of
availing loan.
6. 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
realization of its dues as the last resort and not with intention of
depriving the borrower of the property. Accordingly, if the bank's
dues are cleared in full, the bank will hand over possession of
property to the borrower at the earliest, but not later than 15 days
from the date of clearance of bank's dues in full. If satisfied with
the genuineness of 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
installments in arrears. However, this would be subject to the bank
being convinced of the arrangements made by the borrower to ensure
timely repayment of remaining installments in future.
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