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UBI to Speed- Up Recovery of Bad Loans through Automated Solutions

CIO Insider Team | Tuesday, 26 April, 2022
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Union Bank of India (UBI) is planning to speed up recovery of bad loans by using a first-of-its-kind stressed asset recovery automated solution (SARAS) that helps the bank enforce securities, track recoveries and enhance monitoring of stressed assets.

Ashok Chandra Chief general manager, Union Bank of India says, “the automation will eliminate errors and cut time taken to initiate recovery from months to a few days. Over the years, we had noticed that the time taken to file cases for recovery, initiate the process and then monitor the cases wasted precious man hours and eroded value of assets. In 2020, after the amalgamation of Andhra and Corporation Bank with us, it was felt that a system to track all these accounts will help a great deal. We have now developed an automated model for willful defaulters, track cases with advocates, enforce collateral securities and check valuations.”

UBI, the fifth largest public sector bank with close to Rs. 11 lakh crore in assets, had Rs. 77,787 crore of gross non-performing assets, which was 11.62 percent of its total loan book. The bank had issued a tender to automate its recovery process and selected US based Speridian Technologies last year. It plans to complete the process by the end of June. Chandra says that UBI is open to share the system with its PSU peers, according to reports.

Chandra says, “the bank can now assign and track cases to its 10,000 empanelled advocates or initiate willful defaulter proceedings though artificial intelligence-based software linked to its core banking system.”

As this system matures, it will create a repository of data which can used more efficiently. It will ensure stage wise timely movement of all recovery actions

“There have been instances when it used to take months to initiate defaulter proceedings. It was difficult to even track cases in various courts across the country. Now both these are updated in the system. Lawyers will now have to fill in details of their cases through this app including reasons delays or adjournments so we can also track performances,” Chandra adds.

“As this system matures, it will create a repository of data which can used more efficiently. It will ensure stage wise timely movement of all recovery actions. It has an inbuilt alert system with escalations to regional, zonal or corporate head offices for action,” Chandra says.

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