Debt Recovery for NPAs
As of Now Banks and Financial Institutions are suffering heavy loss due to their bad loans and therefore, keeping in line with the international trends on helping financial institutions/banks recover their bad debts quickly and efficiently, The Debts Recovery Tribunal have been constituted by the Government of India under an Act of Parliament. The Debts Recovery Tribunal (DRT) enforces provisions of the Recovery of Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993 and also Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002, still the Banks/Financial Institutions are suffering because of dishonest nature of most of many debtors. In most cases people cry to take loan to ease their financial difficulties but later on they fail to refund the dues and finally try to hide themselves to face the consequences and ultimately put their bankers in a troubled boat to sink.
But, we are there to help those bankers / financial institutions to recover their dues from hiding/invisible/ absconding debtors. Our professionalism is our pride, our specialized expertise are well versed to tackle any challenging task; they are the bravest veterans retired from the Indian Armed Forces and are highly skilled professionals in the fields of Investigation, Detection & Spying operations. Being so it’s our profession we do nab the culprits / absconding Debtors/ Defaulters easily and reach out to their inner secretly hidden treasuries to know deeply about their financial stability and ultimately grab the authentic proof of their presently owned properties /wealth, which can be attached by law (DRT) to recover the losses caused to the Bankers / Financial Institutions. Our law advisors (Advocates) are ever ready to fight for the rights of our clients in the court of law (DRT) to win the possession of the properties for recovering the losses.
Banks are required to classify non-performing assets into the following three categories based on the period for which the asset has remained non-performing and the realisability of the dues:
1. Sub-standard assets: It is classified as NPA for a period not exceeding 12 months.
2. Doubtful Assets: It remained NPA for a period exceeding 12 months.
3. Loss assets: It is a loss identified by the bank, internal or external auditor or RBI inspectors. But the amount has not been written off, wholly or partly. All those assets which cannot be recovered.
About us:
1. Dexterity of Debt Recovery: We feel that a straightforward, professional approach to debt collection produces better debt recovery results than the strong-arm tactics. The unique approach and strategy used by our debt collection negotiators produces quicker payment from debtors. If debtor is still in business, we feel you have a 75% chance of recovering your money. The account that may seem hopeless or destined for lengthy litigation may be resolved amicably through persuasive communication and with valid reasons. It can be easy to threaten legal remedies, but it’s knowing how and when to use this action that demonstrates our talent.
2. Work Based Payment: We work on a performance basis; when we perform, we get paid. Our motivation is to get your money back in your hands, where it belongs. We know that until we do so, we will not be paid. Accordingly, our motivation is propelled by mutual success and is result oriented.
3. No Debt Collection Contracts: Our debt collection program is set up on a per-account basis. Unlike many, we do not require you to lock yourself into a binding annual contract, require you to submit all your accounts to us at a certain stage, or even commit to sending them all to us exclusively. When you have an account that you are ready to place for collection, simply send them to us. We will earn your loyalty through our performance, not through a contract.
4. Debt Recovery System: Along with our two in-house debt collection attorneys, that provide us with on-site legal expertise, we have established working relationships with collection attorneys in every major city in India. Their job is to assist us with a more localized collection of difficult accounts. When reason and negotiation fail, they are able to litigate and execute the claim for us.
5. Immediate course of Action: When we receive your account we begin immediately to collect your money. We use a proven combination of letter and phone communications designed to persuade your debtor to honor their obligation. We begin our collection efforts immediately and make sure to be in-touch with your debtor within 24 hours of receiving the account.
6. Negotiators / In-house Attorneys: Our talented negotiators and attorneys bring a healthy and imaginative approach to collecting your debt. We are able to resolve any legitimate dispute or reason for delay and create workable solutions to recover your money.
7. Searching / Nabbing of Debtors: When needed, we can sue your debtor wherever they are located. Not only do our collection attorneys litigate your account, but they execute the judgment afterward. They are very aggressive in their approach and help bring the legal ramifications of non-payment to bear against your debtor.
8. Property Search Investigations: For those difficult-to-find debtors we have our own specialized and expertise spy wing to find your debtors and their presently owned assets which can be attached to recover the dues through DRT.
9. Feedback on Recovery Process: We make sure our debt collectors have ample time in their scheduling to allow them the opportunity to go the extra mile and provide you with the personal touch needed to make our relationship work. We believe in getting feedback from you as quickly as possible, instead of mailing you a form/ letter that generalizes a dispute your debtor may have with you, we call, fax and/or E-mail right away to detail the situation for you and receive your instructions. This immediate feedback is not only informative, but it is essential to collecting your debt. We have learned the importance of quick and decisive action. The quicker we respond, the better our chances of recovery.
10. Made-to-Order & Prompt Service: We enjoy knowing the clients we represent. The way to do that is speak with you often and recover your money. We do all the right things to maintain your loyalty. We maintain your loyalty by offering effective, personalized, courteous and prompt service.
Types of cases we undertake:
1. Interest or installment of principal remains overdue for a period of more than 90 days in respect of a term loan.
2. The account remains ‘out of order’ in respect of an Overdraft/Cash Credit (OD/CC).
3. The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted.
4. The installment of principal or interest there on remains overdue for two crop seasons for short duration crops.
5. The installment of principal or interest there on remains overdue for one crop season for long duration crops.
6. The amount of liquidity facility remains outstanding for more than 90 days, in respect of a securitization transaction undertaken on securitization Acts 2006.
7. In respect of derivative transactions, the overdue receivables representing positive mark-to-market value of a derivative contract, if these remain unpaid for a period of 90 days from the specified due date for payment.
8. All NPA accounts, including technically written off accounts in Micro, Small and Medium Enterprises as defined in MSMED Act 2006.
9. Accounts which are likely to be declared as NPA in current financial year and there is possibility of recovery whether the bank has filled suits or obtained decree or have taken action in SARFAESI Act 2002.
Our step wise Process of Recovery:
· Account is placed for debt collection ; client sends information on the debt including supporting documentation.
· Claim is reviewed and the data is entered into our debt collection program.
· Demand letter is sent to debtor via mail and or email and an acknowledgment letter is sent to the Client.
· We attempt to collect payment. If we obtain payment commitment we work to ensure the payment(s) materialize.
· If debtor fails to cooperate in resolving the debt we make final pre-legal collection attempts.
· We send our update to the Client, including details on forwarding claim to affiliated attorneys.
· The Client authorizes forwarding the claim and we send it to our affiliated attorneys that located near the debtor.
· Attorney sends update and recommendations. If they recommend initiating legal action they will provide us with their suit requirements.
· When we receive suit requirements from the Client, the lawsuit is prepared and filed by our attorney advocate. If the client is unwilling to litigate, then will work on claim for another 60 days then close it.
· The complaint is served in case of litigation process and a trial date is later set.
· If a judgment is awarded in our favor, attorneys file for a Writ of Attachment.
· Attorneys initiate bank levies/ garnishment orders/ liens/ etc. to satisfy the judgment.
· Time frames are purposefully omitted because of uniqueness & handling /recovery of each claim.
· We provide timely updates on claims as there are developments in process to the clients.
· With regard to payment, when the payment is received by the Client directly, the Client notifies us immediately and we send them an invoice for our commission. When we receive payment, we remit to the Client within 15 days of the funds clearing in our company account.
Our Terms and Conditions:
· We have to execute Collection Agreement/ Submitting claims on-line, bankers authorizes Direct Recovery Associates (DRA) to perform debt collection services, according to these rates and terms & conditions on all accounts placed for collection, including reporting all debtors to the Bankers.
· Authorized DRA to receive and endorse, for the purpose of debt collection, any funds in all forms received by DRA for the purpose of remitting said principal to Bankers less any fee due to DRA. Bankers agrees to pay DRA its full commission on amount collected and any waiver or forgiven amount or services returned or received in lieu of payment, or forgiven amount settled from any source after demand and for that payment has been made.
· Bankers agrees to pay DRA a 10% fixed fee in the event an account was placed for collection having already been paid by the debtor prior to placement.
· Bankers agree to notify DRA immediately of any direct communication or payment from Debtor. Bankers agree to pay DRA an additional 10% fee for any payments received directly by Bankers from Debtor that are not reported by bankers to DRA.
Our Quotation: [ We work on Performance Basis that is “NO Collection……NO Payment” ]
· 15% on collection value of NPA accounts less than 60 days from date of oldest invoice.
· 20% on collection value of NPA accounts less than 120 days from date of oldest invoice.
· 25% on collection value of NPA accounts less than 365 days from date of oldest invoice.
· 30% on collection value of NPA accounts exceeding 366 days from date of oldest invoice.
· 35% on collection value of NPA accounts for Individual/Consumer accounts, returned checks, Credit cards, Personal loan etc. and all accounts under Rs.35,000/-.
· 40% on collection value of NPA accounts forwarded to attorneys for collection/litigation are collected on a contingency basis, however, should litigation/execution be required, there would be additional charges. These charges (i.e. court costs, suit fees or any other fees or disbursements) would be in addition to the above rate and would be required in advance. Of course, they would not be incurred without your prior authorization.
· Making panchnama, pasting notice, taking possession of property , it requires additional charges as per the case.
· Collection of movable properties like Motor Bike, Vehicles, Machinery ect. incurs additional charges as per case.
· Protection of properties by providing Security and safety services attracts additional charges as per requirement.