This story is from January 29, 2015

Andhra Bank staff use 'Gandhigiri' to get back dues

Can loan recovery methods become case studies in B-schools? Not unlikely given some novel means used by banks and financial institutions.
Andhra Bank staff use 'Gandhigiri' to get back dues
CHENNAI: Can loan recovery methods become case studies in B-schools? Not unlikely given some novel means used by banks and financial institutions.
Loan recovery isn't a pleasant business, but financial institutions now are adopting innovative means to recover dues from their corporate clients.
From appointing detectives to track the whereabouts of borrowers whose loans have gone bad to getting bank employees to wage a 'silent protest' outside their premises, banks are trying it all.

On Wednesday, around 20 employees of Andhra Bank (from across various city branches) stood outside the offices of Jeypore Sugars Company in Gopalapuram demanding repayment of dues (including interest) of Rs 37.13 crore. Some employees sported black bands across their arm while others held placards which read, "We demand payment of loan."
By all accounts, it was a silent protest, inspired by Bollywood films. "This is 'Gandhigiri'. Through this, we want to attract the attention of the company management… more such protests against other defaulters will follow," general secretary of Andhra Bank Employees Union Madras Thamarai Selvan said.
According to officials who participated in the Wednesday protests outside Jeypore, Andhra Bank was part of a seven-bank consortium with Bank of India as the lead bank to which the defaulting company currently owes close to Rs 400 crore. "We had sanctioned Rs 32.75 crore to the company and it slipped into the doubtful NPA (non performing asset) category on September 30, 2013. Since then we have used all our persuasive skills including issuing a demand notice under SARFAESI (The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002)," Selvan said.

He added that the silent protest is a directive from the bank's head quarters and Andhra Bank branches in areas like Guntur and Vijayawada have resorted to such silent protests against defaulting borrower companies in the recent past. "The Chennai zone of the bank occupies fifth rank in gross NPA position of Andhra Bank and we are looking at all possible recovery measures by March end (year closing)," Selvan said.
The gross NPA to gross advances as a percentage for Andhra Bank stood at 5.99% at the end of the third quarter of FY 15 and in absolute terms it stood at Rs 6,884 crore as against 5.98% and Rs 6,827 crore during the quarter ended June 30 2014.
In the past, other institutions like Indian Bank have taken the help of private detectives to track the whereabouts of loan defaulters.
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About the Author
Aparna Ramalingam

Special Correspondent with Times of India, Chennai. Over 10 years of experience in journalism with a focus on business reporting and feature writing. Prior to moving to Chennai in 2007, worked in Delhi between 2000 and 2007.

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