Credit portfolio management is coupled with the management of Non-Performing Assets (NPA). NPA brings down the average yield on advances, and reduces staff productivity because more human resources need to be allocated to preparing returns, statements, audit compliance reports, and case filing. Following up of bad advances leads to neglecting routine monitoring of good advances, which, in turn, leads to such accounts also turning bad — therefore increasing the number of NPAs. This has a significant impact on the banks’ growth and reputation.
In fact, a significant amount of funds need to be blocked for making NPA account provisions. But to keep pace with schemes that expand credit, banks need a system for post-disbursement follow-up and monitoring of advances and recovery. Prompt action is usually not initiated when accounts start showing irregular repayments or operations. A time lag between the first defaults in repayment makes overdue recovery difficult later. Adding to these challenges is fluctuations in the market scenario, which have a direct impact on loan returns.
The competence of a lending institution is benchmarked by its capability to manage the loan lifecycle. Institutions must be able to judge customer credentials in a focused way when originating a loan process. Banks — and other institutions that deal with asset management — need a robust, scalable, comprehensive solution that handles these challenges while delivering increased operational efficiency and strong loan management processes.
Techno Brain provides Loan Origination and Legal Recovery Systems to address the twin problems of correct loan origination and legal redressal in case of default. The Loan Origination solution supports the creation of flawless documentation and prompt service to customers. The Legal Recovery Solution on the other hand, is an automated, workflow-driven, and collection solution that addresses the issuance and follow-up of NPAs and defaulting accounts. It assists in monitoring and following-up of loan accounts, and giving warning signals that prevent an account from becoming an NPA. The solution is persuasive - assisting in loan recovery and appropriately initiating legal action.
These two solutions help financial institutions maintain the quality of their loans and assets. We make it possible to identify the default risk of borrowers — whether public firms, private firms, or individuals.
The Loan Origination solution is browser-based and work-flow driven; it delivers scheduled alerts through SMS or email. Different workflow parameters can be set for different loan products; the workflow logic translates business requirements into enforceable processes. In addition, the solution caters to retail as well as commercial lending scenarios. It automates all stages of loan origination, management, and repayment tracking.
The Legal Recovery solution restricts slippage of standard accounts, ensures effective post-disbursement follow-up, as well as tracking of advances monitoring. The solution handles appropriation and re-appropriation of receipts, reversals and re-presentation of cheques, rescheduling for part prepayment, changes in interest rates/tenures, and changes in instalment change requests. It also enables forced recovery after 90 days of default. The Legal Recovery solution provides a list of cases against which arbitration proceedings have been initiated and status of recovery on initiation of various forms of legal action.