Union Bank of India looking to digitise recovery processes

According to a tender document released by Union Bank of India, the lender wants to digitise and automate its recovery processes.

Union Bank of India looking to digitise recovery processes
According to a tender document released by Union Bank of India, the lender wants to digitise and automate its recovery processes. It has invited bids from vendors to incorporate and manage the software solution for the next five years.

“The bank plans to incorporate a software solution for digitising and automating the recovery portfolio, as well as a single platform database solution that can handle the modules… The bidder must develop, execute, and maintain the entire software solution for a five-year term, according to the contract.

Proceedings under the 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 are among the modules the bank aims to digitise.

For example, if the bank initiates a corporate insolvency resolution process (CIRP), the solution must be able to issue a template-based permission note allowing the branch to file an NCLT application with the appropriate authority via the respective office.

It should be able to handle items like routing communications from the branch to the advocate, as well as capturing the hearing date-by-date movement of the case and any recoveries made during the case’s pendency.

The solution should capture all such NPA accounts in the vehicle loan NPA module, as well as any vehicles used as collateral protection. Following that, it should allow system-based auto generation of notices to borrowers according to the specified timelines, as well as sending reminders to branches as required.

PSBs have been digitising more time-consuming and non-profit-generating processes in recent years. The State Bank of India intends to overhaul its entire operating set-up for lending to SMEs with the aim of improving processing time and customer service while reducing bad debt.

Union Bank has recovered NPAs worth Rs 3,523 crore in the first nine months of FY21, compared to Rs 5,174 crore in the first nine months of FY20. The bank expects a recovery of around Rs 5,000 crore in Q4FY21, according to Rajkiran Rai G, MD & CEO. “About half of that could come from this NCLT resolution account, which has at least two accounts that are really similar to resolution,” says the expert.

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