Union Bank of India To Digitise & Automate Its Loan Recovery Process

According to a tender document released by Union Bank of India, the lender wants to digitise and simplify its recovery processes. It has invited bids from vendors to incorporate and manage the software solution for the next five years. According to the document, "Bank intends to implement a software solution for digitising and automation of recovery portfolio and creating a single platform database solution which should be capable of handling the modules... Bidder needs to design, implement and manage the entire software solution for the period of five years."

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 representatives, and vehicle loan non-performing assets are among the modules the bank plans to digitise. For example, if the bank initiates a corporate insolvency resolution process (CIRP), the approach must be able to issue a template-based approval statement enabling the branch to file an NCLT application with the relevant authority via the relevant office. It must be able to do things like forwarding 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 collect all such NPA accounts in the vehicle loan NPA module, as well as any vehicles used as collateral security. Following that, it should allow system-based auto-generation of reminders to borrowers according to the stipulated timeline, as well as sending reminders to branches if appropriate. Union Bank has recovered NPAs worth Rs 3,523 crore in the first nine months of FY21, opposed 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. According to the transcript available on the bank's website, he further added that "Out of that, about 50% may come from this NCLT resolution account, at least two accounts which are very close to resolution."