Fear of credit slipping into non-performing assets (NPAs) has triggered the State Bank of India (SBI) to make 5 lakh outbound calls a month from its three recovery centres to remind its customers to repay their retail loans on time. 

The urgency has intensified with the third wave of Covid-19 sweeping across the country. The calls from the centers at Bengaluru, Kolkata and Vadodara are made 20 days, 10 days and three days before the due date of EMI to the new delinquent accounts in personal and home loan segments as well as on accounts which have a tendency to slip into special mention accounts (where the principal or interest is due from the first day itself). The data is based on analytics and artificial intelligence (AI). 

SBI has restructured Rs 30,312 crore of loans under the special restructuring window that the Reserve Bank of India (RBI) allowed to stave off the Covid stress on the borrowers. Only 1.55% of retail loans of the bank was restructured under this scheme, with the major chunk being from the small and medium enterprises (SMEs). In the home loan segment, majority of those who availed the restructuring came from the salaried class. 

“The tele-calling agents at the call centres contact delinquent borrowers through auto dialer system by using our in-house developed collection application, LAMS (loan account management system), for follow up and recovery,” SBI deputy managing director in charge of retail assets Saloni Narayan told Indianbankingnews.com. 

Apart from this, the bank also has an analytics team to shortlist the accounts for soft recovery calling, based on customer segmentation and product differentiation to improve effectiveness of the application. 

Stressed assets in SMA-0 and SMA-1 category accounts in personal, home and SME loan segments are being followed up daily by the tele-calling agents. The daily dialer file containing account details of the delinquent borrowers are used by the agents for follow up and upgradation. 

“About 52% of the home loan borrowers who opted for restructuring  are from the salaried class,” Narayan said. Most of the borrowers have availed the facility as a cushion to overcome the likely financial obligations due to impact of continuous lockdown during Covid-19 and also to temporarily postpone the repayment obligations, she added. 

SBI had a home loan book of Rs 5,18,703 crore at September-end, 2021. Of this, just 0.97% of the loans were delinquent. Only for the personal and the auto loan segments the delinquency levels are higher at 1.52% and 1.03%. But the gross NPAs of the retail book stood at just Rs 8,656 crore at September-end, 2021. 

“Our tele-calls are mainly for making soft recovery,” Narayan said. “The delinquent customers are requested to pay up their dues by explaining the impact defaults could have on their CIBIL score and other consequences. This is supplemental to our regular recovery efforts at branches and other channels, including follow up by business correspondents and sending of regular text messages, both at pre and post delinquency stages. 

The improvement in collection efficiency through LAMS and continuous follow up of accounts from SMA-0 level has helped SBI to keep its NPA levels low in all segments, especially in retail loans. Introduction of early warning signal based on AI and machine learning model predicts the probability of turning an account into SMA and NPA. It provides all alerts in red category so that they can be attended to in a timely manner and suitable corrective actions be taken.

“With the mass vaccination campaign across the country and also with the opening up of the economy, improvement in business levels in major sectors is observed. Income generation capacity has been regained by a majority of the borrowers and some of them in the retail segment who have availed restructuring facility, are now making pre-payments to reduce their burden,” Narayan added.