It is very common for banks to get the loans given to people stuck. But when the loan gets stuck, it becomes very difficult to recover it sometimes. But five public sector banks have come together and formulated a strategy so that the stuck loan can be recovered. Five banks including SBI, PNB and bank of Baroda are working forward on a plan to form a common collection agency for the recovery of retail and MSME loans of less than Rs 5 crore.
Together step for loan recovery
According to a report by Economic Times, at present a firm will be formed by these five public sector banks - PSB Alliance Private Limited, which will be based on the proof of concept and will later join other banks. The purpose of forming it on the lines of National Asset Reconstruction Company Limited is that it will help banks focus on core banking activities. Especially in such cases when a single loan taker has taken money from many banks.
Now there will be a special way of loan recovery
At present, only three to four government banks are outsourcing for the recovery of stuck loans. In such a situation, once this agency is formed, it will help the banks to focus on the stuck loans of big defaulters instead of these small loans.
It is worth noting that many such cases have come to light, including the PNB fraud case, when the bank came to know about the fraud much later. In such a situation, if there will be a separate agency for the recovery of these small loans in time, then the bank will get a full opportunity to focus on its big loan takers. As soon as the agency starts working for these five banks, it is expected that in the future other banks will take its help.
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