Banks Seek Sherlock Holmes For Bad Loan Borrowers

BENGALURU: Bad loans haunt banks at all times. When a borrower fails to repay the loan by the scheduled date, it becomes a bad loan or a non performing asset (NPA). Recovering bad loans is not just a never ending and tiring process but also creates loss to the banks in long run. All the banks are not well equipped with man power for recovering bad loans; therefore they are now seeking the help of detective agencies for recoveries as their last resort.  

Banks hire detective agents to reduce their burden of searching for defaulters. They track down the whereabouts of the NPA loaner. Indian Bank is one among such banks to recently hire detectives for the purpose. Chairman and Managing Director of the Indian Bank TM Bhasin said, "We are using such services for old cases. It's the last effort undertaken before the final decision of write-off is taken."

Recovery procedure commences once a suite is filed against the defaulter and recovery certificate is obtained. And if the security provided by the borrower is lower than the loan amount, the bank looks to attach other assets of the borrower/guarantor. This is when the private investigators come into play. So far, the bank has had 105 such cases with the amount totaling Rs. 55 crore where the recovery certificate has been issued.

These efforts made by the detective have mostly proved fruitful. So far, the bank could recover Rs 150 crore from a particular account through sale and attachments of properties. Bhasin said, "While tracking the whereabouts of the borrower, the private operative found out that he had utilized the banks funds not for his business but to set up another factory in his son's name. This helped establish the money trail and consequentially the fund diversion." Efforts are still under process to recover it completely.

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