Saturday, February 24, 2018

How to conduct bank adalat

                    Today it has been very common that the banks are conducting adalats through different agencies to recover the dues from the defaulters by reducing the interest burden on the borrowers. Adalats are mainly targeted at the unsecured loans and are good in numbers. Adalat helps bank to settle a number of loans in a short period of time. Some banks conducted Adalats everyday while some conducted adalats every quarter. Here I am not going to waste your time through blah blah. Lets focus on How to conduct bank adalath.

Procedure for conducting Bank Adalat:
  1. Strategy Development
  2. Data Collection
  3. Field Work
  4. Data Addition
  5. Setting of Adalat Counter
  6. Bargaining
  7. Follow Up  

 1. Strategy Development

               This is the stage at which algorithm of the adalat is developed. The major decisions taken include:
  • Date of adalat
  • Time for data collection and field work.
  • Number of staffs and number of days available
  •  Settlement condition
  • File suit or revenue recovery
  • Cost of Adalat
  • Content of the adalat notice
  • Promotion - advertising mediums 
  • While preparing notice, bear in mind we should mention full payment on the date of adalat. This will reduce the workload on followup stage.
2. Data Collection

                This is the most time consuming process in the beginning, but it will save your time to a great extend in the future days. Here the data of the borrowers are collected from the loan documents and Core Banking System. Usually these data includes - Name, Account Number, Limit, AUCA/NPA/SMA,  Address, Locality, Village, Mobile Number, Suit Number, Revenue Recovery Filed Number, Photo etc.
For this purpose I use Excel. While feeding data into excel sheet, data entry in vertical direction seems to be easier than that in horizontal. I have created an excel file in which data is fed in one sheet in the vertical direction is stored in another sheet through a macro program.
These collected data can be used for field work, printing notice, bargaining.

3. Field Work

             It is the most difficult but crucial part in the adalat. Using the data collected I usually create a format using excel which contains borrower data with their photo. A printout is taken and taken to field work which helps me spotting the borrower's house easily. Talk to the borrowers politely and tell them about the consequences of default. But do not spend more than 2 minutes per borrower.
Including a lady staff and ex service man in the team will help you to avoid unnecessary arguments with the borrowers. This will help you later. Keep some blank revival letters with you. Getting sign from the borrowers will make the documents live. Also gather maximum details about the borrower from the nearby people. Borrowers are classified into 4 as shown below. Write in which segment each customer belongs to.

  1. CW- Capable and Willing to Pay
  2. NW- Not Capable but Willing to Pay
  3. CU - Capable and Unwilling to Pay
  4. NU - Not Capable and Unwilling to Pay

4 Data Addition

             Everyday after returning from the field, you will have the gathered data with you - willful or non willful default, capable or non capable to repay, whether the party has went to abroad etc. These details are added to the earlier collected data. In future, this data will help us to proceed with legal actions against willful defaulters.

5. Setting of Adalat Counter

              Everybody who came to the bank for adalat wants to know how much amount the bank has reduced to the person who settled before him. If the amount offered by the bank to this person was above than that of the earlier person,he won't settle. To avoid this, the counters are arranged in such a way that the borrowers who came in and go out will not communicate inside bank premises.Keep a register for registration for every adalat. This is a proof showing customer has came to adalat.

6.  Bargaining

                Here we must not say the bottom limit set by the bank instantly. Add a small amount and let them bargain. This will induce positive response from borrower to settle the loan. This stage is one of the hardest part even though it seems to be simple.

7. Follow Up

                 We have to contact all those who settled but not closed till their end date. This will increase seriousness among the borrowers and also try to settle the loan before next call.

These are the things that have I learned from the adalats I have conducted in past years. The process seems to be lengthy but only for the first time. The adalat should not be conducted in short intervals. One in every quarter is enough.