Home/ News / India/  Union Bank of India to digitize loan recovery processes

State-owned Union Bank of India is looking to digitize its loan recovery mechanisms and create a single platform database for different routes to deal with delinquent loans.

The lender has sought bids from vendors to procure a software solution that can handle recovery modules such as Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi), Debt Recovery Tribunal (DRT), Insolvency and Bankruptcy Code (IBC) and civil suit, among others.

For instance, in Sarfaesi cases, the bank wants the software to alert the system of eligible accounts; alert reminders if demand notice not issued within 15 days of account becoming non-performing; generate demand notice under section 13 (2) of Sarfaesi Act based on editable templates provided.

In case of IBC accounts, the lender wants that the software solution to be able to generate template-based permission note for filing National Company Law Tribunal (NCLT) application from branch to appropriate authority through the respective office. It should also be able to sanction communication from the sanctioning authority to branch and other respective offices, among other things.

“The proposed solution shall be hosted on the bank’s on-premise hyper-converged cloud in Red Hat Linux 7 or higher / Windows Server 2012 or higher. However, solution should have capability to migrate to any other platform as per the bank’s requirement," it said.

That apart, the successful bidder will need to design the solution with high availability and secure infrastructure in data centre and disaster recovery site as per industry-accepted security standards, it added.

In the nine months to 31 December, the bank has recovered delinquent loans of Rs3,523 crore and upgraded loans worth Rs2,301 crore to the standard category. However, this was lower that what it did in the first nine months of FY20. The bank’s gross bad loan ratio stood at 13.49% in the December quarter, down from 15.51% in the same period of FY20.

Shayan Ghosh
Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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Updated: 05 Apr 2021, 12:30 PM IST
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