[sbinews] SBI Kicks Off Bad Debt Drive Via Circle-level Recovery Cells (Financial Express)

  • From: "Rajendra S. Pai" <rspai9@xxxxxxxxx>
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Tue, 15 Jun 2004 20:50:58 -0700 (PDT)

SBI Kicks Off Bad Debt Drive Via Circle-level Recovery
(Financial Express) 
KOLKATA, JUNE 13:  The country?s biggest commercial
bank, State Bank of India (SBI), has decided to go all
out on a country-wide bad debt recovery drive, by
setting up circle level debt recovery cells in all its
14 circles. 

The drive has been initiated with an aim to fulfil SBI
chairman, AK Purwar?s target to bring down the bank?s
net non performing assets (NPAs) as a percentage of
total assets to below two per cent by March 31, 2005.
During the fiscal to March 31, 2004, SBI reduced its
net NPA to 3.5 per cent from the previous fiscal?s
figure of 4.5 per cent. 

Sources in SBI told FE that initially the bank decided
to set up a centralised recovery cell at its head
office in Mumbai, which was supposed to monitor the
process of non performing asset recovery throughout
the country. However, they added, the management
itself at a later stage found that operating such a
centralised cell will be difficult in view of the vast
branch network of SBI spread across 14 circles. 

Accordingly, the SBI management has decided to set up
14 circle-level recovery cells in all the 14 circles
of the bank. According to preliminary planning, each
of these circles might be headed by a senior SBI
official in the rank of deputy general manager.
However, SBI management is in favour of total
decentralisation of the debt recovery process and the
state level recovery cells will set targets of
recovery for the individual modules in each circle. 

On an average, there are around five modules in each
circle of SBI. These modules, in due course, will set
targets for the individual regions, which will again
set targets for the individual branches. The target
set at every level will be time-bound. 

Sources indicated that initially SBI appointed
external debt recovery agencies through open
advertisements, a formula which has not worked out
much to the benefit of the bank. The main problems
faced in this regard were lack of coordination at the
branch level with these external agencies, as well as
high rate of service bills furnished in some cases by
these agencies. 

?Although these external agencies had recovered some
amount of bad debts, the cost effective factor
equation had not been in much favour with the bank,?
an SBI official averred. He also noted that
large-scale objection from the staff and officers?
associations in SBI was yet another reason for the SBI
management to reconsider its decision. 

The SBI Staff Association general secretary, Ashoke
Kumar Dutta, welcomed the decision. ?We have been
objecting to the appointment of such outside agencies
since the very beginning. I personally wrote a letter
to the top management pointing out that the
appointment of outside agencies was unnecessary, when
the associations have readily come forward to help the
management in their recovery venture and also in
marketing of different SBI products,? Mr Dutta stated.

He also assured full cooperation on part of the
association in any kind of debt recovery drive
undertaken by the management.

Web Address: http://rspai.tripod.com

Do you Yahoo!?
Read only the mail you want - Yahoo! Mail SpamGuard.
Mailing list (sbinews@xxxxxxxxxxxxx) related information:

News/articles about SBI and Banking related matters published  in the print 
media, Internet etc will be circulated through this Mailing List. 

The messages in this list will help in improving awareness of SBI and its 
activities vis-a-vis the happenings in the Banking industry. This should be of 
help to all staff members of SBI, particularly those who are preparing for 
promotional written tests/interviews/group discussions. Subscription to this 
Mailing List is simple and FREE. Please check the procedure below. Please share 
this information with other colleagues/branches that could be interested in 
subscribing to this Mailing List. 

The messages circulated here should not be deemed to have the official 
endorsement of the SBI or any of its employees. The correct factual position 
may be ascertained from official sources. 

To join this mailing list, just send an email to sbinews-request@xxxxxxxxxxxxx 
with the word 'subscribe' without the quotes in the subject of the email 

To leave this mailing list, just send an email to sbinews-request@xxxxxxxxxxxxx 
with the word  'unsubscribe' without the quotes in the subject of the email 

Archives (old messages) are available for viewing at:
Click on the month-year at the lower left corner to view messages posted during 
that month. 

This is an announcements/newsletter type mailing list i.e. only the Moderator/s 
can post messages to the list. 

This mailing list is maintained and moderated by Sri. R.S.Pai, currently 
working as Chief Manager(IT-Internet Banking), SBI, Corporate Centre, Mumbai. 
Visit http://rspai.tripod.com for some useful Banking, Reference and Utilities 

Other related posts:

  • » [sbinews] SBI Kicks Off Bad Debt Drive Via Circle-level Recovery Cells (Financial Express)