Indian Bank has set up an online loan accounts monitoring department to stem the rot of NPAs (non-performing assets).
The department is headed by a general manager at the central office level.
The department generates ‘auto alerts' of the loan accounts, where the instalments are falling due in the next seven days. These early alerts are then pushed to branches and zonal offices concerned to expedite recovery. The objective is to ensure that these don't slip into ‘special mention accounts' and further to “non-performing assets category after 90 days”.
According to T.M. Bhasin, Chairman and Managing Director, the online borrower account tracking system “has proved useful and successful in stemming the rot of NPAs.”
Mr. Bhasin said the bank had a total exposure of Rs.2,022 crore as on date to the commercial real estate segment. He said the bank held two to three times assets and collateral securities in these accounts. He claimed that the repayments of instalments of principal and monthly interest by the borrowers in this segment were timely.
Since the bank had migrated to CBS system-generated NPA identification from June, it had totally removed subjectivity and obviated the chances of suppression of NPAs by field functionaries, he added.
He said the bank had recovered and upgraded NPA accounts worth Rs.550 crore during the first eight months of the current financial year as against Rs.382 crore in the same period last year. SARFAESI (Securities and Reconstruction of Financial Assets and Enforcement of Security Interest) notices had also been issued to all 10,156 eligible NPA accounts, he added. [The SARFAESI Act empowers banks/financial institutions to recover their non-performing assets without the intervention of the court.] Mr. Bhasin said that “there is neither systemic failure nor any such risk in the banking system.” He claimed that the preventive and punitive vigilance administration in Indian Bank ``is strong, robust and effective.”
