Wednesday, 27 July 2016

Suggestions on takeover of loan accounts: A.K. Roychoudhary (Director of Sun Capital Advisory Services & Ex Banker PNB)


The present guidelines issued by banks for takeover of account by another bank is causing lot of hardships to SME segment
SME client wants to shift his account from his present banker for various reasons as given below;
·         With the change in manager of the branch he suffers on account of rigidity in the approach of new manager on genuine issues. Now that the new manger is going to be here for next 3 years he wants to avoid wasting his time in visiting branch for every small or big issue.

·         For customers with large facility, with the change in set up at RO/CO/ZO he is again at the mercy of new Senior officers who are not very supportive- say his genuine request for enhancement in facilities is not agreed to by RO/CO/HO. his request for some ad hoc/concessions in charges/ reduction in interest etc are not considered.
There can be many other reasons also for shifting of the bank by the customer.
A number of present guidelines come in the way for shifting of these clients to a new bank. Due to lack of support, the customer suffers and in our opinion due to rigidity on the part of local branch manager or a new Regional Manager the account ultimately slips into NPA category.
I would therefore suggest as under to take care of genuine difficulty in takeover cases:

1.    That banks should be free to take accounts from other banks especially in respect of SME segment.
2.    Presently shifting of accounts from ex-banks where from either CMD or ED’s have come to new bank is not allowed. The above rule at best may be applied where the account is over Rs.100 Cr. 
3.    The power to take over account for SME segment be permitted by the Manager of the new bank, in whose power it falls. Presently next higher authority is required to give permission. 
4.    When a manager can sanction a fresh loan to any new customer who is yet to start business and whose track record is not known, it is not understood why higher officer has to permit the takeover case when party’s track record is already available by going through the conduct of account from his ex bank. 

5.    Presently the permission of higher ups is not required if the customer pays off his limits with ex-bank and waits for three months to take limit from new bank. Knowing the fact that banks take generally longer time to sanction limits, this stipulation (3 months period) should be reduced to ONE month.

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