Those who have borrowed from the public sector banks (PSB) may soon start getting regular SMS and phone alerts about the loan repayment dates and warnings on their loans turning into a non-performing asset (NPA).
This follows the finance ministry directives to PSBs to be proactive and intensify efforts in ensuring timely recovery of loans by continuously assessing the borrower?s cash flow position and sending them regular reminders about the due date, rather than wait for the prescribed 90 days to expire and treat the account as an NPA.
?We have asked PSBs to start paying attention to each of their borrowers instead of waiting for the 90 days (for treating the account as an NPA) to be over,? a senior finance ministry official told FE.
PSBs, however, say sending reminders is a part of their normal course of business and the ministry directive only reinforces the importance of recovery.
?We have asked our officers to contact each of our borrowers in person or through video-conference if personal meetings are not possible. We have also been regular in sending notices and SMSs on repayment,? said CMD of a leading PSB.
Recently, the parliamentary standing committee on finance had pointed out that gross NPAs of PSBs have gone up to R1,17,262 crore in 2011-12 from R74,664 crore in 2010-11 and R59,924 crore in the previous year.
The panel wanted the government and RBI to set up a high-level NPA Management Cell to look into the write offs and upgradation of accounts and restructured advances. The panel gave the government three months time to submit a report on the issue.
