COLLECTIONS

PROCESS MANUAL

UTKARSH SMALL FINANCE BANK LIMITED

Registered Office: S-24/1-2, 1st Floor, Mahavir Nagar, Orderly Bazaar, Varanasi, Uttar Pradesh,
PIN -221002
 TABLE OF CONTENTS

 INTRODUCTION TO COLLECTIONS…………………………….………………….………………Page 2-3

 OBJECTIVE………………………………………………………………………………………………Page 3-6

 COLLECTION ACTIVITIES…………………………………………………….....……………..……..Page 6-7

 COLLECTION STRATEGY……………………………………………………………………………..Page 8-9

 ALLOCATION LOGIC AND PROCESS…………………………………………………...…………..Page 10-12

 BOUNCE AND PENAL COLLECTIONS………………………………………………..…….……….Page 12-14

 COLLECTION SYSTEM AND QUEUE MAINTENANCE…………………………………………...Page 14

 CALL CENTRE PROCESS………………………………………………………………..……………Page 15-18

 FIELD COLLETIONS PROCESS………………………………………………………..……………..Page 18-19

 RECIEPT BOOK MANAGEMENT AND AUDIT PROCESS…………………………………………Page 19-23

 TRAIL UPLOAD PROCESS…………………………………………………………………………….Page 23-25

 PAYMENT MANAGEMENT………………………………………………………………...…………Page 26-27

 COLLECTIONS PERFORMANCE AND REVIEW PROCESS……………………………………….Page 27-28

 VENDOR MANAGEMENT SELECTION/RENEWAL CRITERIA…………………………………...Page 28-32

 SPECIAL E MANAGEMENT SKIP , DECEASED & FRAUD POLICY……….……………………..Page 32-34

 RISK MITIGATION TOOL SETTLEMENT AND FORECLOSURE POLICY…………………..……Page 34-35

 LEGAL PROCESS………………………………………………………………………………………Page 35-38

 DEBT COLLECTIONS STANDARDS (CODE OF CONDUCT) ……………………………………..Page 38-45

 ANNEXURES …………………………………………………………………………………………….Page 46-54

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COLLECTIONS

Past due or non-collectible loans are part and parcel of the financial sector. As past-
due rates surpass expected limits, though, this piece of the credit cycle can become
a true problem.

While often seen as a final step in the lending cycle, collections actually play a
integral role in the overall process. In recent years’ Financial institutions need to have
more effective strategies for collections. This increased attention to collections is in
part due to an industry-wide emphasis on credit promotion and analysis as well as to
the changing and increasingly competitive environments in which Financial
Institutions are operating.

The Role of Collections

Collections at Utkarsh Bank is an important service that helps to maintain clients and
free up money for lending again. A strategic process is key to generating
good habits and a payment culture among clients.

It can also be seen as a business activity whose primary objective is to generate

returns for the institution, converting losses into income. Utkarsh Bank views
collections as an essential piece of the credit cycle, not just the final step.

During the collections process, we receive feedback on policies and activities within
each sub- process of the lending cycle: promotion, evaluation, approval, and
disbursement

Collections is an integral part of the credit cycle

The process of “collections” in the scope of this document addresses broadly all
activities taken to encourage or persuade the customer to make repayments for the

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debts owed to our Bank. Collections, is an important and essential part of the credit
cycle, especially given the segment the Bank services. It ensures that credit rating of
the customer is protected and this enables the company to extend the relationship in
terms of services and products offered to the customer.

If a customer does not or cannot make a payment by the stipulated due date
collection activity may commence to encourage the customer to avoid repayments
defaults that may occur.

Past-due or non-collectible loans are part and parcel of the financial sector. As past-
due rates surpass expected limits, though, this piece of the credit cycle can become
a true problem.

While often seen as a final step in the lending cycle, collections actually plays a much
more integral role in the overall process. In recent years Banks and Financial
institutions have sought to develop new and more effective strategies for collections.
This increased attention to collections is in part due to an industry-wide emphasis on
credit promotion and analysis as well as to the changing and increasingly
competitive environments in which Banks and Financial Institutions are operating.

OBJECTIVE:

The objective of the collection manual at USFBL is to establish awareness of

collection policies and practices. It is also aimed at ensuring consistent collection
practices across the board to ensure adherence to established and accepted policies
and procedures of collection follow-up. The adherence to the processes mentioned
in this manual is mandatory for all Collections officers of Utkarsh Small Finance bank.

The Collections Methodology:

The collections process is defined as the set of coordinated, appropriate, and timely
activities aimed at full collection of loans from customer.

The process is intended to convert the Bank’s receivables into liquid assets as quickly
and efficiently as possible, while at the same time maintaining the goodwill of the
client in case of future transactions.

As such, the collections process requires significant interaction with the customers,
beginning with a careful analysis of the client’s situation and continuing through
timely and frequent contact over the duration of the loan.

Customers should be offered payment alternatives that are timely and appropriate to
each situation, and all collections activities should be recorded to facilitate
continuous monitoring and follow-up as well as control of client compliance with
negotiated agreements. Some typical collections activities are described below,
followed by a flowchart illustrating the collections process:

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  Customer Analysis before contact: Who is the client? What is his situation?
What were the original loan conditions? Why did the loan fall past-due?
Consider internal and external sources of information such as credit bureaus
and bad-debtor lists, Bounce Reasons and number of bounces since disbursal
etc.

 Contact with the client: What information does the client provide? Where is
the client located? What actions were taken previously?

 Assessment: What problem is at the root of the current delinquency? What

type of client are we dealing with?

 Suggesting an alternative: What are the possible solutions? The objective

here is to sell the benefits of paying on time in order to foster a positive
payment culture with the client.

 Securing payment commitments: The Field officer must clearly identify that
when, where, how, and how much the client will pay and must remember, for
example, how a client in a situation of over-indebtedness or decreased
income will prioritize the payment of his bills. Are we able to get the customer
to commit to prioritizing repayment of this loan?

 Compliance with payment commitments: Did the client pay on the agreed-
upon date? Does the client demonstrate a desire to repay the loan? The
objective here is to demonstrate consistency throughout the collections
process. It is not enough to reach an agreement and depend on the client’s
apparent goodwill and positive attitude; collections staff must follow up on
payment commitments.

 Recording collections activities in Daily Collection Report (DCR): Are

collections activities carried out in a coordinated manner? Put yourself in the
position of the staff member next in line for collections activities with that
client. All follow-up details are to be recorded in a DCR and in Collections
system as a trail for future references and records.

 Follow-up on the case: Are we aware of the client’s situation and the
collections activities the case has been subject to? Our follow up has to be
regular and consistent.

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 Bounce
Report

CUSTOMER
ANALYSIS &
CONTACT
Successful Unsuccessful
Contact Contact

Negotiation Search

Success Failure
Pays PTP Refuse

Meets Does Not Meet

Commitment Commitment
Legal

No Capacity No Willingness
to Pay to Pay

INTENSIFY COLLECTIONS FOLLOW UP

N0 SETTLEMENT
SETTLEMEN
T
Success Failure

Loss

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Intensification of collections activities: What is the best action to secure collections
of the loan in the most immediate manner? What assets does the client possess?
How much can be collected through legal action? The sole objective when a past-
due loan reaches this point is collections, even if it means losing the client.

At Utkarsh Small Finance Bank Limited (USFBL), the collection activities are follow-up
done with a customer who has gone overdue on his repayment obligation. The basic
methods of establishing contact with the customers to persuade them to make good
their obligations are:
 By telephone
 By field visit
 By letter (in this case, general legal notices/ loan recall letters)

The objective of the above activities is to start collection activities in very early stages
of the account being overdue and persuade the customer to repay the overdue
installments and prevent the customer from going into a greater state of default.

The customers repay their loan either through postdated cheques made in favor of
Utkarsh Small Finance Bank at the time of taking the loan; else they can make a
payment via /Cheque/DD or NACH favoring “Utkarsh Small Finance Bank Limited.
The methods by which these collection activities are pursued and tracked are
covered in later stages of the collection manual.

COLLECTIONS PROCESS FLOW :

 Retrieval of PDCs of Old Book & NACH/SI by CPC for presentation into the
Bank. Since some of the old book disbursals (Till 31st dec-17), were being
done with PDCs, so currently all such live loans where customer submitted
the PDCs for presentation of EMIs are being presented by Ops for EMI
presentation, but after 1st Jan-18, we have moved to NACH & SI. For legal and
initial hassles in NACH processing, we are collecting 3 SPDCs to secure the
loan from initial delinquency in exceptional circumstance to safeguard the
interest of the organization.

 Awareness Calling by the USFBL Call Centre is done 4 days before the
presentation due date. Informing the customer to keep sufficient balance in
their accounts for clearance of their respective Loan EMIs on due date.

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 ** all references to PDC in the Note pertain to PDCs obtained and held on
record for existing customers.

 Presentation of cheques in batches on 5th, 15th and 20th of every month

respectively as per the cycle in which the Customer’s account falls. In case of
ACH advise sent by Ops to Clearing Banker

 Clearance and Bounce Reporting is done post receiving the status from the
clearing bank. The details of the PDC/NACH/SI presentation bounce database
is shared with the Business & Collections as clearing and Bounce Report
periodically by the central team. Later the same will be uploaded in the
Collection System, which is under development with the Indus Team.

 Bounce Calling by the Call Centre teams is initiated immediately after the
bounce reports, informing the customer about their bounces. Pick Ups and
Field Referrals are generated on daily Basis. Which are then allocated by the
MIS executive at branch level on daily basis for collections from the
customers accordingly. On every bounce calling the Tele-Callers has to
mandatorily inform the customer about the Bounce Charges and penalty
applicable on each bounce.

 Parallel Branch Collection Efforts are also initiated immediately post Bounce
information is provided to the Collections Department for necessary follow-
up.

 For cases where the cheques have returned, Collections Department of

USFBL allocates the bounces to the respective branches as well as the Call
Centre for quick follow up for collections.

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  Bounce Charges are to be debited to the customer account post PDC/NACH
bouncing is received from Operations & the customers would be informed
accordingly with the reason of cheque bounce. Promises are generated to
collect the dues from the customer, which includes the EMI due and the
Charges due on their account. Bouncing and Penal charges are a part of our
Income. Collecting EMIs without charges shall be considered as income
leakage. Any waiver on charges must be approved by the respective authority
as per the defined grid, which has been shared later in the manual

 Legal Action on Non Cooperative Borrowers: At USFBL, Legal action is

initiated in parallel on the non-cooperative borrowers thru various legal
notices like Demand Notice, Loan Recall Notice, Sec-138 Notice, Arbitration
notice etc. for influencing their defaulting behavior and bring them to a
settlement stage legally for loan recovery.

COLLECTION PROCESS & STRATEGY

At USFBL, the Collections methodology is used according to the type of customers

& Reason for default. Not all customers are the same, nor are their reasons for
delinquency as well. An effective collections Strategy should be based on customer
segmentation, which results primarily from identifying the cause of delinquency
and classifying the client based on attitude, capacity to pay, solvency and location.

An Effective customer segmentation is not achieved early as classification is a

difficult task, which is why it is important to follow up with customers and monitor
their number of days past-due. As the number of past-due-days increases, strategies
should change as the collections officers come to know the client better. At the
beginning the focus is on retaining the client, but as the number of days past-due
increases the focus changes to recovering the entire loan funded.

At USFBL, we use a simple classification/ Segmentation strategy as the following:

Clients who are willing and able to pay require simple collections activities. In
many cases effective negotiation of new payment conditions is enough to recover
the past-due amount and maintain the client. These individuals are usually clients
who forgot to pay, did not receive the awareness calls for any reason or asked
someone else who did not follow through to deposit their payment for them.

Clients who are willing but unable to pay require feasible alternatives and options.
In these cases, the most effective negotiating involves changing the loan conditions
(restructuring, refinancing as per the Policy). Depending on the payment behavior
after re-negotiating the conditions, this client could also be a candidate for renewal.
Generally, these clients have experienced an unforeseen emergency, are going
through a difficult situation, are victims of an investment gone bad, or are
outspending their income etc.

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Clients who are able but not willing to pay require a different treatment and
assessment on their REASON FOR DEFAULT (RFD) as being a lack of payment due
to problems with the quality of service offered to this client? If the answer is “yes,”
such problems must be immediately resolved. If the answer is “no,” collections
must involve an immediate and more intensive strategy. If the new strategy is
unsuccessful, then immediate legal action is recommended. It is not unusual to
discover that these clients initially received erroneous information, that they
disagree with the loan conditions or that payments were made but were not
applied because of operational error

Clients who are neither willing nor able to pay require immediate legal action.
Generally, these are fraudulent clients with a bad credit history or poorly
evaluated/approved credits. However, before moving forward it is important to
determine their degree of solvency—that is whether the clients possess sufficient
assets to obtain repayment. If they do not, any actions taken could go un-
productive. The Collection Manager must evaluate the cost/benefit of any action
taken with these clients.

Clients who have not taken any loan need immediate escalation to the Vigilance/
FCU department to check the possibility of a Fraud in such cases be handed over
from collections to vigilance as and when appropriate.

Clients who are either skip or absconded after loan disbursal need a separate
tracking as Skip customers. The early MOB skips to be informed to Business &
Credit & Vigilance as well. All the Skip and absconded customers need to be
assigned to a skip branch or the respective branch RO for establishing contact
again. Parallel Collections follow up will remain continue on such accounts as well.

It is evident from this segmentation that there is a direct relationship between the
client’s intention to pay and the probability of recovering the loan—as the client’s
intention to pay diminishes over time, so does the probability of loan collections.
For this reason, action must be taken immediately on past-due loans in order to
increase the effectiveness of collections.

At USFBL, Our Collection strategy focuses the collection efforts on the front end
and to organize collection follow-up for all workable delinquent accounts in a cost-
effective manner, specifically focusing the accounts in the early bucket and on high
risk accounts to minimize the follow-through and losses.

Tele-calling Activity:

At USFBL, our tele-calling is primarily restricted to awareness Calling & bounce

Calling only, but it could be extended to Collections across buckets and Write off as
per the changing business requirements accordingly. In order to make the 90+
collections more effective, we are using Tele- calling setup as per the requirement.

At USFBL, all cases in buckets 0-29,30+, 60+ & 90+, are also allocated to the Call
Centre for parallel and rigorous follow up, which helps us in early resolution of
collection s & increase the roll backs and normalization at a better rate.

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At Utkarsh Small Finance Bank Limited, business has reviewed its collection
strategy and the necessity to outsource the activity and subsequently obtained an
approval for the same for 90+ Portfolio as of now.

ALLOCATION LOGIC AND PROCESS:

At Utkarsh Small Finance Bank Limited, our Collection Strategy is linked to

Allocations by way of the table indicated below.

In addition to this Allocation logic for the month is reviewed and approved by the
Collection Manager designated by the Zonal Collections Head at a location level
as there could be some variances given the geographical spread of business
presence and in view of constraints that could be location specific.

Segment Strategy and Allocation

Allocated to the tele-calling team, focused on establishing

customer contact and detail verification. The call is a welcome
Awareness call and provides details to the customer regarding loan
Calling number, presentation date of installments and the EMI amount
(4 days Before Presentation
date) & informing them about the NACH/SI presentation dates and ask
them to keep sufficient balance in their accounts.

Allocated to tele-calling to perform first bounce calling. The

customer is contacted and requested to ensure that the overdue
payment is made on the promised dates with charges.
Post Bounce Accounts could be referred for field visits if no contact with the
Calling customer has been established, customer has requested for
(After Bouncing report of pickup of payment, customer promised to pay but subsequently
every cycle)
did not keep up the commitment. Call Centre will send Pickups
and Field Referrals as per the customer response and contacts
status accordingly.

Allocation is done to the Branch Collections Team. The

Bucket 1
importance here is to ensure that the customer is contacted
(1-30)
quickly and the account prevented from ageing further.
All cases here are allocated to the Branch Collections Team.
Field visits are important to ensure communications lines are
open between the customer and company so that assessing
Bucket 2
financial health of the customer is easily facilitated. In this
(30-59)
bucket we focus on collecting all the overdue EMIs along with
the Charges and Penalty to discourage the bouncing behavior of
the defaulter
Allocation of all cases is to Branch Collection Team. The
Bucket 3 objective here is to reiterate the importance of the customer to

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 ( 60-90) make payments from further ageing and escalation of collection
activity. Loss mitigation is initiated in this segment. Selective
use of customer correction tools like demand notices is an
option, if the customer satisfies the necessary criteria and
shows a willingness to bring his account back on track. Field
collections can be coupled with legal notices and if necessary
filing of Sec 138 can also be initiated at this stage for proper
legal messaging and pressure building on the defaulters with in
the legal boundaries.

Allocation of all cases is done to Branch Collection Team. The

key objective is to contact the customer, specialized activities
like skip tracing need to be done to track down defaulting
Bucket 4 customer This is the pre-charge off segment and loss mitigation
(90+ Pool, excluding write- tools like offer of a structured payment plan under One Time
off)
Settlement (OTS) is used to motivate customers to pay off their
financial obligations to the company. Legal action goes on in
parallel for better influence on customer behavior.

Once the account has reached the 120+ dpd stage then follow
up intensity is increased. Branch has some senior officer who
are allocated the higher buckets collection for better results.
Allocation in the write-off portfolio is done Branch Collection
Team and money recovered from these accounts are treated as
Write-off
recoveries. Tele-calling also may be used to assist field
collections and on small balance write-off accounts as a cost
effective method of recovery. We may also use our call center in
the locations where the Branch team is not effective or there is
scarcity of resources at some location.

Based on the treatment of the segments indicated in the grid the collection activity is
carried out by tele-collections & by way of the field collection method and broadly
classified into three segments on the methodology use to carry out the collection
activity:

Type Follow up action Criteria

1 – 90 dpd Tele-calling/In-House-Follow-up EMI Collection
90+ Pool & Call centre + In-house + Recoveries &
Write off Legal action Settlements

Allocation is a crucial activity of the whole collection cycle. Following points are to
be noted for allocation:

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Ensure rotation of cases wherever possible. It is done particularly where delay in
payment or non-payment happens, allocations may need to rotate amongst the
Collection officers after completion of a month. However, considering the spread of
business, this will be actioned on a “best effort basis”

During the course of collection cycle, frequently reviews and based on collector
feedback, decide and determine course of action to be adopted and if necessary
reallocate cases.

Allocations in USFBL happen on a monthly basis to ensure good results and the
Collection Manager is responsible for this crucial activity.

The allocation logic adopted by the Collection Manager is on the basis of:

 Past performance of the branch/ In-House Officer.

 Number of cases & collection officers at the branch/ Branches.
 Special skill sets with the respective collection officers.

In addition to the above the Collection Manager would ensure adequate rotation of
non-paying customers by having different collection resources with different skill
sets manage different segments wherever possible. E.g. Accounts in bucket 1
handled by one officer and accounts in bucket 2 handled by another. This method of
sandwiching allocations (No continuous Bucket allocation) allows for better follow-
up and control on the activity.

The sandwich logic approach to allocations needs to be done in all locations on best
effort basis, where there are >500 collectable accounts in bucket 0-90 in any
product.

Instances where the sandwich logic cannot be maintained due to constraints of

availability of collection expertise in the marketplace, cost dynamics etc. may vary
from location to location.

The allocation logic adopted for the month needs to be documented and approved
by the Zonal or National Collection Head.

BOUNCE AND PENAL COLLECTION:

Bouncing and Penal charges are a part of our Income. Collecting EMIs without
charges is treated as income leakage. All the collection officers must try and
collect the BCC/LPC due on each and every account as per the accrual. Any
waivers will require an approval with valid reasons.

 Bounce calling:

In order to ensure that customers are aware of the all the charges due on their
delinquent loan accounts the Calls are made to customers whose PDC’s/NACH
have not been cleared in central presentation, with bounce reasons. Purpose of
the call is to make the customer aware that his PDC has been returned by his

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 bankers and will not be presented again & customer has to make a Cash
payment on a particular date along with the EMI over dues. The customer is also
informed about the charges as per the accruals.

The main purpose of calling early is to assess the customer from time to time and
at a very early stage in the relationship between the customer and company. This
is fundamental to relationship management of the customer and by talking the
customer early we have the ability to assess if the customer is undergoing any
liquidity issues or facing financial constraints rehabilitation of the customer
begins early.

Information obtained during the course of calling on the customer should be

recorded on the Collection system for future reference, as Tele-calling may also
be required in higher buckets and Write off.

 Bounce Charges are to be accrued and must be debited to all the customer
account on CBS Post every PDC/NACH bouncing is received from Operations
with the bounce reason & the customers would be informed accordingly with the
reason of cheque bounce. Promises are generated to collect the dues from the
customer, which includes the EMI due and the Charges due on the same for
bouncing and late payments. All such customers whose bounce reason is
“Insufficient funds” must be informed the BCC & LPC charges along with the
EMI amount due from them. This helps in influencing the bouncing behavior of
the defaulter at later stage & helps in reducing the bouncing % of the portfolio.

The approved Bounce and Late payment charges rate as per the product
policy is as follows:

 BOUNCING CHEQUE CHARGES (BCC) = Rs.300/- Per Bounce + GST.

 LATE PAYMENT CHARGES/PENALTY(LPC)= @ 2% per month + GST
(The above-referred charges are governed by the Schedule of Charges approved by the Board
of Directors and as displayed on the Bank’s website.)

If Bounce reason is mentioned as “SIGNATURES PROBLEM “we can ask the

customer for BCC of Rs.100/- per bounce/per month + GST. But in exceptional
cases where customer disputes on his signatures, then the respective officer can
waive off Rs.100/-after discussion with the RCM/ZCM.

Waiver on BCC/LPC: At USFB, competent authority/ies for waiver of charges are

defined in the Board Approved Delegation of Financial Powers (DFP) Matrix – the
last such DFP Matrix being approved by the Board on July 21, 2018. Cases
where some customers are found to be financially incapable or there is a dispute
in the case due to which that customer is able to pay the EMI only, but not the
charges, waiver of BCC/LPC on such case must be approved by the respective
authority as per the Latest approved DFP Grid.

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 Waiver Process: All the Cases for a month where there is a part of full waiver on
charges in a month, one single consolidated list of such accounts to be
approved on mail by the Designated authority as per the approved DFP Grid
only.

Our Collections MIS officer will prepare the consolidated list in consultation with
the respective RCMs & ZCMs who will validate the data for their respective
Regions/Zones.

MIS officer consolidates such list and sends to the HOC for further
recommendations to the DFP Authority accordingly for final approvals.

This approval mail has to go before 7th day of the next month for the previous
month’s waiver. That means we will take the Consolidate charges waiver for a
month after & within 7 days from the closing date of that month.

Waiver on Principal: At USFBL we do not promote waivers on Principal Amount

as a policy. But in exceptional cases during the collection follow up for EMI and
BCC/LPC a customer is found financially incapable or there is a dispute in a case
due to which that customer is unable to pay in full, but can pay in part which
does not cover the principal outstanding. In such cases the Principal waiver on
may be considered to resolve the matter & it must be approved by the
respective authority as per the Latest approved DFP Grid for Principal waivers. A
Separate approval has been taken from the respective authorities to include the
Principal Waivers in the approved DFP Grid of the Bank.

**This is an auditable action and is in 100% compliance on all the

BCC/LPC/Principal waiver. The waiver grid is only for managing waiver s, it
should not lead to high waivers at all.

COLLECTION SYSTEM AND QUEUE MAINTAINENCE:

Utkarsh Small Finance Bank uses a Manual collection system as of now, which is
Excel based. However, a Collection system is under construction to ensure
smooth management of collections from the delinquent customers.

A dedicated Collection system will allow us for queuing the structure. There is a
primary queue where data for all delinquent cases from the lending system will
be captured on the collection system, and secondary queues.

The primary queue is used for reconciliation related activities done at the
beginning of the collection cycle to ensure data integrity on the collection
management system.
The secondary queues are populated based on allocations done at location
levels as governed by the allocation process.

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Reconciliation between the collection system and IT Reports are done on a
monthly basis by a dedicated Collection MIS officer and Final MIS published by
the system.

The various capabilities of the system like reports based on user driven
parameters, retention of collection notes will be managed by the Collection
system, which is under development as of now. Till then an excel based daily
Collection reporting is being done at Branch & HO level by the respective
Collection managers.

CALL CENTRE PROCESS

Tele-collections is one of the methods adopted by Utkarsh Small Finance Bank

to contact the customer and facilitate in the loan repayment process.

Tele-collections is an effective method of establishing contact with a large

number of customers in a reasonably short span of time.

The tele-collections strategy is treated separately in the “Call Centre Strategy

Document, which indicates in detail the activities pursued by the Call Centre and
the timelines and treatments associated with this particular collection method.
This Call Centre Strategy Document will also need to be reviewed by the
Collection Head periodically and modify as per the Business requirements with
approvals in place.

The call center facilitates all the calling activity under “one roof” so that it would
help both in terms of control both for collections management as well give
management a first cut understanding of the portfolio.

The call center would also allow for implementation of new calling strategies in a
more efficient and controlled manner than if it were based out of branches. The
call centers work as a “hub and spoke” model given the linguistic hurdle and
spread of business, it also ensures coverage of new branches, remote locations
where training and developing the collection skill set at the branch level would
take some time.

The activities currently associated with collection calling are:

TYPES OF TELECALLING

AWARENESS CALLING
BOUNCE CALLING
( before PDC/NACH
( After Bounce Report)
Presentation)

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  As per the overall collection strategy tele-calling will be done in for
the two main activities indicated above in addition to this it could
also be adopted in the soft range and may also be done on a
restricted basis in the midrange.

Awareness calls – These are calls made to let the customer know his due date,
confirm installment and remind the customer to make funds available in his
account for the installments so that he/she can ensure that their credit rating with
the company remains intact. These calls are as indicated done before the
presentation of EMI claims to the customer’s account. This may also be used as a
verification call as it is made to customers whose loans have been disbursed.

The purpose is to establish contact with the customer, educate the customer on
loan details, and resolve issues/ customer queries if any, and also provide the
customer service numbers for future reference.

Awareness Calling Script:

“Good Morning / Afternoon / Evening, Sir / Madam, I Am Calling On Behalf Of

Utkarsh Small Finance Bank.”
“Can I Speak with Mr./Ms…..
(If right party….)
“Sir / Madam”,
“You have got a Product Loan from us. For which we would like to provide you some important details”.
“But before we move forward could you please confirm me your residence and office address & phone no’s….
“thank you so much”
“You must have received the asset/Chq. by now”.
“Your New Loan Reference No. Is ……………………
“The EMI amount for the same is ……………………..

“Your installment cheques would be presented on the 5th / 15th / 20th day and shall appear in your account by the 5th
/15th / 20th of the month. In Case of any queries please feel free to contact our customer services following
numbers…… (AS PER LOCATION).”

Sir this is to inform you that in Case your cheque/NACH gets returned due to not maintaining sufficient balance in
your account, every return from the bank your account shall be debited for Rs.300/- per Bounce as Bounce Charges
+ 18% GST therefore it’s not in your interest to bounce your cheques and would request you to please get it cleared
in the first presentation always.

In case the payment is not received within 24 hours of bouncing then there would be additional Late Payment
Charges due on your account @ 2% per month + 18% GST on the total overdue.

“Please mention your loan account number, so that we can serve you better.”
“Looking forward for a mutually rewarding relationship with you.
“Thank You and Have A Nice Day.”

Bounce calls - Calls made to customers whose EMIs have not cleared in the
cycle date presentation & now customer has to pay the same in /Online along
with the charges & Penalty applicable. Purpose of call is to make the customer
aware that his EMI has been returned by his bankers and will be not be
presented again customer has to make a Cash payment on a particular date. The
customer is also informed about the bounce cheque charges & Penalties to
influence his behavior of further bouncing.

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 The main purpose of calling early is to assess the customer from time to time and
at a very early stage in the relationship between the customer and company. This
is fundamental to relationship management of the customer and by talking the
customer early we have the ability to assess if the customer is undergoing any
liquidity issues or facing financial constraints rehabilitation of the customer
begins early.

 Information obtained during the course of calling on the customer

should be recorded on the Collection system for future reference, as
Tele-calling may also be required in higher buckets and Write off.

 The tele-caller will check for the following:

Details that can be confirmed are:

 Name of Customer - surname, first name & middle name.

 Phone number - residence/Office.
 Residence/Office address.
 Pin code.
 Date of birth
 Mother’s Maiden Name.

If the Customers information on the system matches with that got from
the Customer over the phone the information can be discussed with the
customer.

 Check for previous payment history and inform Customer of his

credit history if the customer desires. This information can also be
used to assess the customer behavior and should be kept in mind
when eliciting a promise to pay from the customer. If the customer is
a chronic defaulter, inform him that his credit rating is affected.

 Start the conversation by wishing the Customer and end the

conversation by wishing the Customer.

 The case, if not resolved or if the customer wants to get the payment
picked up, are referred for field visits.

Bounce Calling Script:

“Good Morning / Afternoon / Evening, Sir / Madam, I am calling on behalf of

Utkarsh Small Finance Bank.”
“Can I Speak with Mr./Ms…….
“This is regarding your loan from Utkarsh Small Finance Bank, before I go ahead could you please confirm your Date
of Birth……
“Thank you so much”
“This is about your postdated cheque/NACH dated ……………issued in our favor towards installment for the month
of ………………….has been returned by your banker due to …………….(reason).”

“The installment amount is Rs…………. You are requested to kindly make the payment with charges by mode of
Cash immediately. Please confirm by when shall you be visiting the Bank Branch or shall we send our officer to
collect the same from your Residence or Office as per your convenience.

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“In case of any queries, please feel free to contact our Customer Services at the following numbers…….( RCM
Number AS PER LOCATION ).”

For every such return from the bank has debited your loan account for Rs.300/- per Bounce as Bounce Charges +
18% GST therefore you are requested to kindly pay the bounce charges along with the EMI overdue on your
account. it’s not in your interest to bounce your cheques and would request you to please get it cleared in the first
presentation always.

In case , the payment is not received within 24 hours from the bounce date, there would be a Late Payment Charges
due on your account @ 2% per month + 18% GST. You are requested to pay the late payment charges additional in
case you are not paying within 24 hours from bounce date.
“Thank You & Have A Nice Day”.

CALL MONITORING:

Call evaluation is a critical aspect of assessing the overall quality of call being made
and this would also provide grounds for specific feedback to be given to the
respective caller so that he/she can make the requisite improvements.
The goal would be to assess the effectiveness of a caller based on various
parameters that have been considered as important during the course of the call
based on the objective of the call being placed. The proposed call evaluation process
works on a scoring model, built around weights assigned to each parameter in the
call. The score-sheet based on the type of activity has various parameters that would
need to be assessed during a call. The parameters are graded/ assigned weights
based on the objective of the call and ranked in that order. The rank is a weight that
gets converted into a score depending on whether the caller passes or fails that
particular check. The call evaluation sheet will be viewed in conjunction with call
volumes of the particular tele-caller. The supervisor or call center head will be
responsible for providing feedback to the caller and documenting the same on a
regular basis.

FIELD COLLECTIONS

Field collections is a method of collection activity that uses an authorized Bank

Collections officer or an authorized branch of the company to visit the customer &
establish a contact. This method could be time consuming but is extremely effective.

Field collections, is largely done by In-house Collection teams at branches only.

Given below is a broad set of guidelines on the collection process for in-
house cases at branches.

 Cases proceeds on collection calls after the cases have been

allocated by the respective collection Manager. This is done on the
basis of a pre-decided/approved Allocation Logic. The branch does
follow up activity on accounts allocated to them on the basis of
Information provided to them over the mails.

 The collectable accounts are allocated on the basis of following

parameter

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  The past performance of the collection officers.
 Payment due, both in terms of amount and days past due date.
 The number of collection officers available in the Branch.
 Types of Collection follow up required (Settlements/Closures).

 Care needs to be taken to ensure that load balancing is done and that
cases allocated to the branch/branch should ensure that the Account
to collector ratio (ACR) are in line for the location/product.

 All payments collected by the Branch in terms of cash, demand draft,

cheques, pay-order, banker’s cheque are being deposited and
updated in customer account within 24 hours.

 The payment received from the branches are being deposited in the
branch. The acknowledged copy of the hands-off has to be filed by
collection staff as proof of payment deposited in their respective
payment files in the branch & the same needs to be acknowledged
by the respective branch CSO.

RECEIPT ISSUANCE PROCESS:

 Payments collected are in the form of Cash /DD/pay order/cheque.

All the s ensures that the Customer Loan account number is clearly
mentioned on the Receipt.

 All payments received are being acknowledged by a receipt.

 All receipts are being issued in Triplicate

COPY 1
(Customer Copy)

COPY 23
COPY
To be submitted COPY 3
Branch
while Copy
depositing
payments at the Returned to UTKARSH
branch with SMALL FINANCE BANK
Cash/cheque hands- when the receipt book is
off. over or when the book is
( Operations Copy) returned to the branch.
( Book Copy)

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  Payment are not being held back at the Branch for more than 24
hours from the time of receipt being issued. All payments are being
handed over to the respective Branch CSOs on the same day. Any
exceptions, due to unforeseen circumstances, are being informed to
the immediate supervisor & all delayed deposits and posting being
supported with the approval from HOC.

 In case, there is any problem while collections process is in progress,

the same is being informed to the local Regional/ Zonal Manager
before any further action is taken.

RECEIPT BOOK MANAGEMENT :

The issue of Receipt Book and its audit takes place in the following steps:

 All receipt books are being centrally printed and are governed by a
serial number control. Each receipt book is assigned a receipt book
number and these receipt books have a specified number of receipt
sets, which are also serially numbered for control purposes. The
process of printing is being managed by Admin Department & and
issue of receipt books to the branch is controlled by a Central MIS
officer under the supervision of RCM/ZCM/HOC.

 The receipt books are issued to the branches only on receiving the
formal requests from the branch by way of a request mails only.

 At a branch the receipt books received from the HO are entered into
a receipt book stock tracker at the branch and kept under lock and
key by the respective CSO.

 Persons other than the CSO will not have access to receipt books at
Branch/Branch.

 The receipt books at the branch are tracked by way of a Receipt Book
Control Register/ Stock Tracker in excel, which tracks the receipt
books that have been received by the branch. All branches send the
status of earlier stock along with the request for fresh stock on the
mail itself to the Collection MIS officer, who tallies the same from the
master tracker and in case of any gaps in Recon, escalates the same
to the concerned branches and seniors.

 The branch CSO then issues these books to its’ collection officers.
The officer wise receipt book audit checks and controls are
maintained at branch level & HO simultaneously.

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  A receipt has to be issued to a customer against collections received,
irrespective of the payment mode. Each receipt set contains three
copies:

 Copy 1: Customer Copy to be handed over to the customer as

a proof of payment received.
 Copy 2: Operation Copy to be handed over to the company
with acknowledgement in form of a Payment hands-off sheet
operations will update the payment on the basis on this copy.
 Copy 3: Book Copy to be returned along with the receipt book
when the book is completed

 In the event of a replacement of a completed receipt book, the

respective branch will raise a request the branch or centralized
collections for issuance of a replacement book. A receipt book return
letter/mail and a subsequent request/ replacement letter accompany
the return of a completed book.

 As per the Standard Receipt book management process, all the

receipt books with the branch, whether used or unused, completed
or still having empty unused receipts will have to be returned to the
branch on completion and Expiry. E.g. Every completed receipt book
issued out in the beginning of a month need to be returned at the
beginning of next month before the start of the next collection cycle.
All requirements in terms of a covering letter with all receipt books
have to be obtained from the collection branch. The Branch Manager
will be responsible to ensure that this process is adhered to strictly
and there are no deviations to this.

 The Collection MIS officer receives the old book(s) from the branches
by courier and a mail confirmation of dispatch with details. The MIS
officer then tallies the receipt books returned against the issuance. If
there is a gap, then he reconciles the same with each branch
separately & updates his master Receipt Tracker accordingly.

 Each receipt has to be filled with all the relevant details and carry the
customer’s signature. Filling all the details required in the receipt
issued is mandatory, however entering the denominations of the
monies collected has to be stressed to the concerned officer using
receipt books, however this will be captured on a “best effort” basis.

 At the beginning of every month a receipt book audit needs to be

conducted by an independent auditor /CPA firm for all receipt issued
out. Post the audit the auditor/CPA firm will issue out a formal audit
report, which will detail the findings of the audit, conducted for all
the receipt books. This is for both, internal & branch receipt books,
affiliated to the risk department. This is under process right now.

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 Currently we are doing a daily Receipt Leaf recon on excel on the
basis of Daily Branch reports and the daily Transaction files from IT.

 Post month end the branches return all the relevant receipt books to
the HO with the designated MIS officer for the same.

 The Receipt Book Audit will be conducted on a monthly basis is fairly

detailed and checks all receipt books in circulation as well as the
receipt books in stock at the branch. The receipt book auditor also
checks for discrepancies like delays in deposition of monies
collected, break in series for receipts issued, wrong reference
numbers mentioned in Cash/Chq summary etc. The Audit reports will
be issued in triplicate.

 All issues highlighted in the receipt audit report needs to be closed

out by the respective branches with in the stipulated time duration as
mentioned by the auditor.

In case a receipt book is lost, then the following steps are to be taken:

 Branch will report the loss of books to the HO over a formal mail
and will lodge a complaint with the nearest Police Station.

 Branch will also ensure that the Lost Receipt Notification gets
published in 2 Local Newspapers as well in vernacular language
thru the communication departments of USFBL.

 A fresh receipt book is issued to the branch/.

 Bank will ensure that no further payments are received against the
receipts misplaced.

RECEIPT BOOK RECONCILIATION & AUDIT PROCESS:

RECONCILIATION:

 Reconciliation of receipt Books and Receipts is carried out on Excel by the

Central MIS officer. Later we will do it on the Collection system which is under
construction right now.
 IT department sends a Daily Transaction File, which is the Payments dump of
the previous day, but without Receipt details as CBS does not have the option
of Capturing the receipt details as of now. So collection has to manage the
Daily recon & Track the Receipts & Receipt Books manually on Excel sheets.

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  Besides this, MIS officer Receives a Daily Branch File from the branches in
which the CSO captured the daily payments details with Receipt details on
daily basis.
 On the basis of that file Collections come to know the Daily Payment status
with Receipt details on daily basis for every branch
 MIS officers matches off the payment details on his master Tracker with the
above 2 MISs and will escalate any gaps noticed in the Daily Receipt Recon.

Additional Control ( Maker- Checker):

To counter the probable gaps in the reconciliation, we have initiated an additional

check on the same.

Our RCMs are also additionally maintaining a Daily Payment File in Excel.
Wherein they are capturing the details of daily payments with Receipt details viz.
Receipt No, Receipt date and Receipt amount for all the s of the respective branch
and sending this daily payment file to the respective RCM/ZCM and Central MIS
Officer on daily basis for daily recon.
 MIS Officer, will maintain a Daily Receipt Recon Tracker for every month and
publish it every day on the next morning by 11.00 o clock to all the RCMs,
ZCMs cc to NCM.
 In case of any gap found on matching off the IT Transaction File, Daily Branch
File and the Daily Payment file sent by the BCI, he will raise the same to the
respective BCI/RCM on daily basis with CC to ZCM and NCM on the spot.
 RCM and BCI have to ensure that any payment gap raised by MIS officer get
reverted and closed on the same day before EOD. All the branches with
Receipt Recon Gap will be marked in Red in the Daily Receipt Recon Tracker.
 Any branch showing for more than 3 Reds in a month will have a RCM/ZCM
joint call/ visit mandatory and report the issue and resolution given to the
NCM on the next day & record on mail as well.
 Local Conveyance and incentives of the problematic branches/RCMs may
attract penalties for more than 3 defaults in this process in a month.
 Similar Process is being followed for the Branch Receipts Control as well.
RCMs are taking daily payment files from the agencies and sending it to the
MIS officer for daily reconciliation of the payment records receipt wise.

RECEIPT BOOK AUDIT :

 As a Standard Process, a Receipt Book audit shall be carried out after every
month end.
 Receipt book audit is to be done either by Internal Auditors of the company or
an External Auditor appointed for the same.
 Generally, in case of large volumes of Receipts, this kind of audit is carried out
by professional CPA Agencies, who have specialized staff for the same and
relevant software to carry out such audits.
 Receipts and Receipt Book are the most important document of the
organization. It is the sole proof of the Payments being collected and

23 | P a g e
 deposited in to the customer’s Loan Account & may be misused by Internal
staff or outsourced branch staff of the company
 Any Discrepancies in the Receipts Issuance or Receipt book Process for the
previous month must be audited & reported by the audit team before 15th day
of the next month, so that the corrective action could be taken by collections
and discrepancies be resolved with in due course of time.
 In the absence of a strong Audit Policy for Receipts/ Receipt books, collection
anomalies may remain un-noticed & Un-attended, which may lead to a
Cash/Payments related fraud at later stage and might get escalated by the
affected customers at later stage.
 Collections of money through Receipt Books is a High Risk process and must
be governed and controlled with a Strong Audit and compliance Policy and
Process.
 All Branches and Agencies are answerable to revert and resolve any
discrepancy which gets raised during such audits.
 It works as a Maker- Checker on the end user of the Receipts and Receipt
Books.

FEEDBACK MEHCHANISM

The Branch wise feedback is captured through Daily Collections Reports (DCR).
The data from DCRs is reviewed by the RCM/ZCM periodically. The DCRs are
updated using the contact mode and response codes depending on the contact
mode applied and response obtained. Later we will do the Trails upload through
a Collection system & Handheld machines, which is under development right
now.

The contact codes and response codes to be used in the DCRs are listed below
for the purpose of quick reference and also to assist in the DCR upload process
with minimal error.

All Branch s are responsible to ensure that collectors use these codes while
preparing DCR

Contact Mode and Description

BRANCH BRANCH VISIT

FV FIELD VISIT
LETTER LETTER
LG LEGAL NOTICE
OTHERS OTHERS

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PHONE PHONE CALL
POST LETTER POSTED
TC TELECALLING – OUTGOING
TI TELECALLING – INCOMING

Response Code and Description

CASH CASH PAID

CHQCLEAR CLAIMS CLEARANCE
LM LEFT MESSAGE
NEGATIVE NEGATIVE FEEDBACK
ASR ACCOUNT STATEMENT REQUEST
BPP BROKEN PROMISE TO PAY
CB CALL BACK
CD CHANGE OF ADDRESS
NPR CHECK/NACH NOT PRESENTED
FCLR FORECLOSED
INS INSURANCE CASE
NA NOT AVAILABLE
NC NO CONTACT
NOC NO OBJECTION CERTIFICATE REQUEST
NOREPLY NO REPLY
OS OUT OF STATION
OT OTHER

PTP PROMISE TO PAY

PREPQ PREPAYMENT QUERY
REPOS REPO SUCCESSFUL
REPOU REPO UNSUCCESSFUL
SI SERVICE ISSUE
DISP DISPUTE
WI WRONG INFORMATION

PAYMENT MANAGEMENT PROCESS

The respective RCMs/ZCMs need to ensure that branches and collecting

money from the customer on behalf of Utkarsh Small Finance Bank Limited are
deposited on time at the designated branches only.

The management of this cash will then be the responsibility of the branch cash
desk. Collections will not be involved in the cash management process at the
branch and will also not be involved in the preparation of Cash/cheque
summary report that is sent to Centralized Operations to be updated into the
respective customer accounts. The collection officers are required to be aware

25 | P a g e
of the cash deposit process as per the Branch process, but CSO is authorized
to deposit the daily cash at the branch counter along with the system update
and publishing a daily summary of branch collections done.

 All Cash/Payments which have been collected by the In-House teams

within the Business Hours have to be deposited on the same day.
 In case of a delay in deposit with in the working hours, the Cash in hand
has to be submitted in the Cash Vault of the respective branch and the
same has to be informed to the respective RCM. RCM will report the
incidence to his supervisor who will raise an approval request to the
ZCM/NCM for delay in deposit.
 All Cash payments which have been collected by the In-house team’s
members after the Business Hours and branch gets closed for the day.
The respective officer will keep the collected Cash in his own safe
custody till the next morning and inform his immediate supervisor on
the spot before leaving for the day by mode of a phone call or a
message. RCM will take an approval from ZCM/HOC in the next
morning for delay in deposit with clear mention of this incidence &
ensure that such delayed payment gets deposited in the next morning
as normal process.
 Cash Lost in Transit: In case of an exceptional incidence of Cash lost in
transit due to an unavoidable problem like Road Accident, Snatching,
Medical reason or other. The Respective officer will report the incidence
to the RCM/ZCM with in due course of time (24 hours). RCM will
document the incidence on mail and inform to the ZCM & HOS
accordingly. A Police information is to be done at the respective local
Police station within 24 hours. If the receipt Book has also been lost in
such incidence than along with the Police Complaint, a News Paper
publication in 2 major newspapers in English and Local language needs
to be done for restricting the misuse of the lost Receipt Book in such
incidence. In case of an incidence due to medical reason, a medical
examination of such officer is also mandatory to confirm the facts
within 24 hours only. The risk of cash loss in Transit for all locations is
covered under the terms and conditions of the Fidelity Insurance policy
taken by the Bank.

 All the collected payments for the day in a branch is handed over by the
collection officers to the Branch CSO on daily basis.

Payment Accounting and Posting:

All the payments posting is done by the respective CSO at branch level only.

26 | P a g e
  EMI Posting: CSO posts the EMI entries on CBS via ELNREPAY for all
the EMI payments. ELNREPAY mode works on CIP logic (Charges-
>Interest-> Principal). That means on EMI posting, CBS first adjusts the
charges then, interest portion & then Principal.
 Write off payment Posting: All the payments and settlement payments
of Write off accounts are posted through the ETRAN module on CBS. In
this module CBS follows the PIC that means Principal-> Interest->
Charges. In this module CBS will first adjust Principal, then Interest and
then charges against the write off accounts.

COLLECTIONS PERFORMANCE MANAGEMENT AND REVIEW SECTION

After collection cases are allocated to a Branch, area wise allocations to

collectors are done by the respective RCMs. Officers start their follow-up
on the cases in the descending order of Principal Outstanding of the
Allocated accounts.

The Collection Manager ensures that the number of accounts allocated

to an officer are limited by the Allocation to Collector Ratio (ACR)
decided upon by the Collection Manager and Regional Collection
Manager based on the product handled, ageing of the account/bucket,
Geo Limits and product and in line with the location requirement.

Post the Allocation of cases regular performance reviews need to be

done by Branch Manager.

Reviews done on a regular basis:

Branch/Branch performance is tracked using the Branch/branch

performance tracker which is an MIS that lists out Branch/branch
performance by way of roll forwards, roll backs and stabilized
accounts expressed in units, value and also as a ratio to total cases
allocated by way of product.

Broken promise report: This report lists out promises taken from a
customer but not converted for any reason.

Contacted but no PTP report lists for the Collection Manager, the
accounts where contacts have been made with the customer however
the collector has been for some reason unable to convert these into
promises to pay.

The Regional/Zonal Collection Heads will review:

 The Branch-wise Performance report and his one down’s to track

performance at a product level for locations under their span of
control.

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  The Collection Comparison Report is used to assess current month
performance as compared to last month same time. This is under
construction.
 Trail intensity report measures the effort of the collection branch on
the accounts allocated to them in terms of attempts, contacts,
promises to pay and promises kept.
 PAR MIS for Pre- Write off and Post Write off Pool to check the PAR
increase or decrease status
 BCC/LPC Collections MIS to control income leakage.

Reviews done on a monthly basis:

The reviews are done on a monthly basis with the Branch Collection
teams for target setting and performance reviews. These are done in the
beginning of the month:

 Analyze branch performance on the accounts allocated the previous

months as against the target set.
 List areas of concern/focus.
 State the target for the coming month. This could also be covered by
way of the allocation letter for the current month along with the
target decided on.

Annual review:

An annual performance review is done for collection team and is often

during the time of annual appraisals & at the beginning of the new financial
year.

All regular collector trainings will be the responsibility of the RCM/ZCM.

They conduct planned branch Collections training on a quarterly basis and
document the same for the respective branch in the Standard Training
Memo format. It is necessary that every collection branch should have a
training conducted once in every quarter at a minimum.

VENDOR MANAGEMENT SELECTION/RENEWAL CRITERIA:

Process Involved in Recruiting Collection Vendors.

 New Vendor to send proposal/write up to Utkarsh Small Finance

Bank Limited
 Utkarsh Small Finance Bank Limited Officer to Visit Vendor Premises
and fill in Site verification report and get same approved by the
respective authority.
 The respective regional & Zonal Collection Manager to fill in Vendor
Business Background Report and send to Seniors for further
approval process.

28 | P a g e
  Fraud Control Unit/ Vigilance check needs to be positive. Deviations
may be permitted post recommendations and approvals from the
HOD with clearly documented reasons.
 Request for empaneling the branch to be approved by HOD on mail.

a) Post identification of the vendor based on the search and selection process
the following checks and documents need to be obtained:
 Vendor Profile
 Resume of proprietor/partners or directors as the case might be
 Site Verification report.
 CPV and TVR
 FCU Check
 Dedupe/CLS check
 Copy of last 6 month’s bank statement
 Latest Income Tax Assessment Order
 Annexure A
 Annexure B
 Due Diligence Checklist
 PAN CARD/ ADHAAR/GSTIN NO copy
 Service Tax No. Copy/ Service Tax Regn. Certificate
 PF Regn. *
 ESI Regn.
 Proposed Billing grid for the new branch
 Memo for approval from HOD.

The above-mentioned list of checks could change and are dependent on

requirements circulated by the Legal and Compliance Team of Utkarsh Small
Finance Bank. In that case, the necessary changes need to be incorporated and
checks done to ensure vendor adherence to the same.

b) Once the above documents have been compiled in a file. The respective
manager will inform the ZCM & HOC/HOD and seek approval to proceed with
the hiring process.
c) The original physical file will be sent to HO with the above-indicated
documents.
d) The RCM/ZCM will keep a copy of the file sent with them. This is the
responsibility of the respective RCM & ZCM.
e) The file will be forwarded to legal and Compliance team to do a document
sufficiency check with the objective of having the file included into the AVL
on receipt of a signed copy of the agreement.
f) If the document sufficiency has been met VMU will indicate the same else
provide a list of pending documents.
g) The coordinator will follow-up with the branch for the pending documents.
h) On receipt of the pending documents if any the file will be considered
completed.
i) The file will be then reviewed by both the HOC and HOD.
j) The sign-off will be obtained on the approval memo. Format enclosed.
k) Post approval and document fulfillment met as indicated above the file will be
given to VMU.

29 | P a g e
 l) Legal team will then print an agreement along with the grid and have the
same sent to the vendor to be signed off by the vendor only.
m) Post sign off by the vendor ,they will send the agreement back to HOC, who
will get the agreement signed off from the respective authority ( HOD)
n) Post receipt of the signed copy of the agreement, Legal team will send a copy
of the signed agreement to the respective RCM/ZCM and the vendor as well.

 No cases to be allocated to the vendor, for collections, till the above

outlined process is completed.

 Vendor Staff Hiring Process:

Staff Hiring shall be subject to following guidelines:
o Staff to be an Adult Indian Male / Female
o Staff Profile along with One photograph
o Staff will be issued a valid id card carrying a photograph of the
collector ( if visiting customers)
o Police Verification for staff
o Two references from the staff.
o The staff will have to be trained on the Code of Conduct
by the respective RCM and ZCM and will have to sign the
Code of Conduct which should be available in the vendor
file.

**Police verifications as indicated in done by the law enforcement branch of the

country and therefore the onus of response is on the police. In view of the difficulties
faced due to this reason it has been decided that this process will be initiated as part
of the due diligence process and proof of having initiated this will be recorded. To
however assess the character of the collector two references will be taken from the
collector and these references will be verified

Additionally, on the management side of the vendor the RCM/ZCM needs to

ensure that the following are tracked properly as per the existing process
and approved policy.

 Receipt books & ID Cards.

 A Case Level Feedback process.
 Timely Payment hand-off & deposits, if any.
 Regular visits to the vendor.
 Vendor performance tracking is to be done on a monthly basis of
targets set for that month by the Branch Manager.
 Stat Cards given to the branch for collection follow-up are
returned back at the end of the collection cycle and subsequently
destroyed.
 All collectors adhere to the Code of Conduct at all times during
customer interactions.
 Periodic Training on CCOC for new and old Officers of the
branch.

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 Renewal of an existing vendor:

The following documents need to be forwarded in a file to the designated co-

coordinator
a) Three annual performance letters sent to the branch (if the previous
agreement was for three years) else the latest annual performance letter in the
required format.
b) Vendor evaluation report the last three years (if pervious agreement validity was
for three years) else latest evaluation report duly filled.
c) Branch Renewal request memo format enclosed in the attached file.
d) Proposed payout grid
e) Both NCM and the CREDIT and RISK HEAD will review the file once received.
f) On approval and sign off by the above the file will be sent to VMU for
processing the new agreement.
g) VMU will then print an agreement along with the grid and have the same sent to
the branch to be signed off by the vendor only.
h) The signed agreement will be sent to VMU, VMU will have the agreement signed
by the designated Senior.
i) AVL to be updated.

SPECIAL CASE MANAGEMENT

SKIP POLICY

“SKIP” customer is a customer who has shifted residence and office/company also
and the respective contact phone numbers, if any, are invalid.

Following checks need to be completed before classifying a customer as a skip:

 Both residence and office address have been checked for confirming the
customer’s presence and it has been found that the customer is missing.
 References, if any, have been verified and customer has not been traced /
no clue about the customer has been received.
 Loan documentation of the customer has been checked and not lead is
coming from the same.
This activity needs to be carried out by collections officer / skip tracing officer/
Branch. This is a critical activity as skips moving to higher buckets would be probable
write-off cases hitting the NCL.

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Once a skip is confirmed, the skip tracing action on the cases would begin through a
dedicated skip-tracing branch. In such locations where such specialized services are
not available or the volume of such cases is small, normal collection agencies may
perform this function.
However, in higher buckets the Cases may be allocated to Senior, in order to
increase focus on such cases and to verify the effectiveness of skip tracing cases.
Once traced, skip will be treated as Skip Traced Case and appropriate action as per
collections strategy shall take place.

Skip Tracing process

Following process is being followed during the SKIP trace:
The respective Officer may make use of following techniques in order to skip trace
such customers:

 MTNL/ BSNL CD-ROM check (if the MTNL CD-ROM is available)

 Check References from the original application form, contact them.
 Check Residence and the neighboring area.
 Check with employers (office check)
 Check with the local real estate branch, Gas & transport authorities etc.
 Check with the local post office.
 Online Check on Facebook, Google, True-caller, Job sites and other relevant
apps.

Skip tracing activities may be difficult to perform on small balance accounts like
personal loans and sales finance loans. The reasons being that the success rates
in these segments have proved to be lower than in the bigger ticket segments.

Locations where account volume is high and depending on the availability and
feasibility of skip tracing vendors, the collections department should try and make
use of this opportunity. In locations where this skill set is not available or feasible
then the collections unit will make use of the call centre as and when the same is
fully functional, associated with that location to run the necessary detection
process of a “skip” customer.

Leads obtained by the call centre will be then sent to the local collections unit for
subsequent follow-up. Ideally the call centre will have a team of collectors trained
in skip tracing customers through the phone. They will review the customer file
and pick leads from these documents and use these leads, including references
provided by the customer to try and track the customer.

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 Some of the methods that would be used by the call centre:
a. Calling of references provided by the customer
b. Numbers called in telephone verification report
c. Speaking to previous employers for any details or contact addresses left
by customer.
d. Permanent address and contact numbers if provided by the customer.
The call centre team will document it’s attempts by way of trails on the account
and by and large this method of skip tracing will be adopted for the small ticket
personal loans and sales finance portfolio.
The effectiveness of this approach will over course of time be reviewed against
the results of effectiveness of skip tracing agencies wherever present to
understand if any synergies could be developed to derive an optimal solution.

CUSTOMER DECEASED POLICY

When a customer expires and the loan is running with Utkarsh Small Finance Bank,
cases have to be handled very carefully. This is primarily on the account of sensitive
nature of such cases. As per Indian Legal system, all liabilities of the deceased shall
be passed on to his/her legal heir.

Following shall be our policy with respect to deceased customers:

- In the Case of Personal Loan where average ticket size is fairly low than r30000
or under Loan Insurance, such cases shall be charged off immediately in the
month where deceased has been identified, subject to the necessary
documentation and approvals being received by operations. However, where
credit shield has been sold to the customer, process of claiming the credit
shield amount from the insurance company shall be initiated.

Detailed below is the process related to the Customer Deceased Policy:

Non- Insurance deceased customer account closure

For all non-credit shield deceased customer cases, following documents are
required:

 Foreclosure request sheet.

 Termination report.
 Credit and risk head’s approval is required.
 Original or attested copy of death certificate.

Customer account closure with Loan Credit Insurance

For all the death cases covered under Loan Credit Shield Insurance, we need to raise
a claim on the respective Insurance Company. For this purpose, Insurance

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Companies have certain mandatory documentation requirements (detailed below),
which need to be fulfilled for successful admission of claim. In view of this, we need
to ensure that at the time of closure of all Death cases covered under credit shield
the docs mentioned below are sent to the Proc-Closure team along with the closure
request. This is a compulsory requirement and we can entertain no deviations
specifically because non-adherence can lead to financial loss due to rejection of
claim.

Please note that scanned copies of the claim documentation would not be
acceptable, since some of the claim documentation required such us death
Certificate/proof of age/identity should be either submitted in original or an attested
true copy should be submitted. Therefore, we would need the hard copies of the
same to be sent to us, which would in turn forwarded to the insurance company for
processing of claim.

The documentation criteria for processing of claims for credit shield cases specified
by the Insurance Companies is as follows:

Claims (outstanding POS at the time of death) ≤r 30000.

 INSURANCE Claim Form Notification of a Death Claim (CLAIMANT’S

STATEMENT)
 Original or Attested copy of the Death Certificate by Municipal Authority
 Original or Attested copy of Photo Id card with proof of age

Claims (outstanding POS at the time of death) ≥r 30001 (>$60)

1. Participation > 2 years

 INSURANCE Claim Form Notification of a Death Claim (CLAIMANT’S

STATEMENT)
 Original or Attested copy of the Death Certificate by Municipal Authority
 Original or Attested copy of Photo Id card with proof of age

2. Participation ≤ 2 years

 INSURANCE Claim Form Notification of a Death Claim (CLAIMANT’S

STATEMENT)
 Original or Attested copy of the Death Certificate by Municipal Authority
 Original or Attested copy of Photo Id card with proof of age
 Original or Attested copy of the Death Certificate by Doctor
 Original or Attested copy of the Autopsy Report
 Physicians Statement
 Original or Attested copy of the Discharge Card of hospital
 Copy of FIR may be required in some cases, depending on the cause of
death.

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Please note that the participation of the loan is defined as " The period for which the
coverage is provided to the customer i.e., From the Date of Authorization to the
Date of Demise of the Customer ".

Besides the above-mentioned documents, which are required for insurance claim,
we need additional documents for closure of the Case on system.

 Foreclosure request form to ensure tracking of death cases being closed

has requisite documentation for claim in place prior to closure.
 Checklists for documents completed in all respects & documents as
specified on the same.
 Credit and risk head’s approval is required.

RISK MITIGATION TOOLS:

SETTLEMENT AND LOAN CLOSURE POLICY:

Settlements may be done in order to ensure early realization on loans which if not
closed currently may have to be charged off completely at a future point of time.
Settlements are a loss mitigation exercise carried out by the organization and all
settlement losses need to be charged off at the time of settlement.

Settlements involve waiver of some part of the dues receivable from the customer to
the company, and hence a deliberate approach to this is necessary. The settlements
need to be approved on the basis of the amount that has to be waived off as per the
total dues indicated on the account, and approval has to sought as per the latest
approved DFP grid.

Settlements can be offered to customers in these circumstances:

 If the customer has expired and proof has been provided to us by the next of
kin/heirs of the customer in the form of a death certificate/medical certificate.
 The customer has filed a legal Case against the Bank and has agreed to settle
outside the court with an undertaking to withdraw the same.
 Utkarsh Small Finance Bank has filed a legal Case on the customer and
through legal pressure the customer has agreed to settle with us.
 There is an insurance claim pending on the asset. In the Indian context
insurance cases take a fairly long time to settle and hence a settlement may
be done
 In collection cases where the Collection Manager is convinced that the Case
needs to be settled in the best interests of the organization. These would be
cases perceived to have long term financial problem, contacts of negative
nature due to which repossessions may lead to risk on the
personnel/infrastructure/ reputation of the organization.

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The following will need to be done at the branch level to ensure that the all details
are captured and requisite approvals have been sought before an NOC is issued to
the customer.

The process to be followed is:

a) Settlement request sheet to be filled up format detailed in Annexure

b) Waiver approval as per the latest DPF waiver approval grid

c) The monies collected will be processed as per the Cash/chq process.
d) In the Cash and cheque summary this amount will be indicated as Settlement.
e) Operations will check and post receiving of clear funds from the bank will
close the account on the system and authorize the branch to issue NOC to the
customer.
f) Customer Service department at the branch will do NOC issuance.

Collections will not be able to close the loan nor will be authorized to issue NOC
for cases settled/foreclosed.

LEGAL PROCESS:

For purposes of recoveries in difficult collection cases, the legal process may be
resorted to, as per Collection strategy formulated from time to time. All tie-ups with
Law Firms and Legal Counsels to be done through exchange of letters only. The
following legal action may be initiated against customers as required:

DPD O/S LEGAL ACTION LEGAL INITIATOR PROCEEDER Legal Strategy

1-30 All None NA NA NA
ZCM will send the requirement to the Legal
31-90 ALL Demand Notice In-House Legal In-House Legal manager, who will send the Demand Notices as
per the requests from Collections.
On low ticket cases, we will initiate the low cost
90+ <10k LRN/Lok Adatalat/Conciliation In-House Legal In-House Legal legal actions & push the customers for
settlements.
As per the Agreement Clause & applicable
90+ >10k Sec-138 NI, Arbitration,DRT/ SARFAESI In-House Legal Advocate
Statutes.

 Civil Recovery cases

 Cases u/s 138 of Negotiable Instruments Act, 1881

CIVIL RECOVERY SUIT

 For initiating any Civil Recovery Suit care must be taken to send a
Loan Recall Notice (LRN) on Legal Counsels’ letterhead through
Registered A/D post, asking for payment of the complete account
outstanding within 7 days.

 Apart from the above the following need to be handed over to the
legal counsels, while requesting them to initiate action:
- Loan Application/ Hire Purchase /Loan agreements/Sanction
letter (original or photocopy, as required by counsel).

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 -
Ensure that the same are completely filled up and signed by
UTKARSH SMALL FINANCE BANK Officer(s)of relevant vintage (as
per date mentioned on agreement).

 Irrevocable Power of Attorney.

 Promissory Note duly filled up.
 Detailed Statement of Account.
 Copies of Loan Recall Notices / General Legal Notices (with
postal receipt attached).
 Disbursement Proof (if required by Counsel).

Ensure that a UTKARSH SMALL FINANCE BANK Officer, holding a

Power of Attorney signs the applications being filed in the Courts.

Case U/S 138 OF NEGOTIABLE INSTRUMENTS ACT

 Case u/s 138 of Negotiable Instruments Act (Section 138), may be

filed against chronically delinquent customers who have bounced
multiple cheques / PDCs. Bounced PDCs / Cheques, for each
customer, need to be retrieved and represented within 30 days,
together as this makes the Case filing exercise very cost-effective.

 The Legal process takes place in the following steps:

Legal Process can be initiated for cases greater than Bucket 2 except
in non-starter and frauds.

 PDC/NACH/SI should be within 6 months of validity.

 Sec138 notice to be sent within 30 days of the memo date of the

PDC.

The customer is given 15 days to pay the due amount from the date the
letter is sent to the customer. Case can be filed within 30 days from the date
of GLN sent to the customer.

 Once PDCs/NACH/SI get returned dishonored, the following need to

be sent to the legal counsels for sending notices u/s 138 of N.I Act
giving the customer(s) 15 days in which to pay up:
-Original Bounced Cheques
-Original Return Memos
-Customer Reference #
-Customer Name Customer Addresses (all addresses as per system –
so that notices can be sent to all the addresses).

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  Reason for bounce in the above Return Memos should not be any of
the following:
-Payee’s endorsement required.
-Payee’s endorsement irregular.
-Payee’s endorsement in language other than English or the local
regional language required bank’s confirmation.
-Cheque irregularly drawn.
-Collecting bank’s confirmation requires clearing bank’s
authentication.
-Crossed to two banks.
-Specially crossed to _______ Bank.
-Drawer’s signature required.
-Drawer’s signature differs from specimen on record.
-Drawer’s signature incomplete.
-Withdrawals from account stopped by drawer’s
death/insolvency/lunacy.
-Operation on the account suspended under court’s restraint
order/attachment under of IT authorities.
-Amount in words and figures differ.
-Alteration in date/figures/words requires drawer’s signature.
-Cheque /pay draft/order is multi-dated/postdated/out of date.
-Cheque /pay draft/order is multi-dated, requires bank guarantee.
-Cross entry either incorrect or illegible.
-No account.
-Amount/name of payee differs from that on advice.
-Wrongly delivered.
-Drawing contrary to savings bank rule.
-Not payable as Cheque contains extraneous matter.
-Drawee’s bank’s funds with the …. (Name of the sponsor banks).
-Payee’s receipt incomplete.
-E.C.D Form A-7 approved by the exchange control required.
-Drawer’s signature authority to operate on the account not received
at this office.
-Weekly off of bank.

 If the above customer(s) do not pay up within specified number of

days, legal counsels to be asked to file case against these customers

 Ensure that the Officer filing these cases has a Power of Attorney
from the Utkarsh Small Finance Bank.

Legal Strategy:

Since the legal remedy involves a cost component, it is therefore utilized according
to the case value. Like cases above Rs.20,000 of Outstanding only are being pursued
for recoveries through legal tools, whereas cases below Rs.20000 of value shall be
continue for collections actions as a standard procedure and low cost legal actions
like Lok Adalat etc.

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DEBT COLLECTIONS STANDARDS :

Utkarsh Small Finance Bank. - Code of Conduct

The Clients of Utkarsh Small Finance Bank. (hereinafter referred to as “Clients”) are,
inter-alia, engaged in providing of Consumer Finance products in India. The product
range consists of:

 MSME Loans
 Personal Loans
 Housing Loans
 Mortgage Loans
 Business Loans

This booklet contains policies on collection methods/practices. This booklet will

enable you to understand the following:

 Utkarsh Small Finance Bank’s debt collection policy;

 When you may attempt to call a customer;
 Where to contact a customer;
 Which language and mode of address you may use;
 How often the customer may be called;
 With whom the customer’s obligation may be discussed
 Appropriate conduct when dealing with the customer;
 When and where the customer may be visited;
 What may be done if the customer declines to pay;
 How to manage disputed accounts;
 The appropriate dress for meetings with customer.

1.0 Summary

The Clients must be treated with respect, dignity, courtesy and fairness in debt
collection efforts. Utkarsh Small Finance Bank believes this is not only the right thing
to do, but also the most effective.

It is imperative that all persons at USFBL, who are involved in collection related
activities, follow this policy. All must agree to abide by this policy and the detailed
policy described below prior to beginning collection activities with respect to the
Customers of the Bank. This policy applies to all employees of Utkarsh Small Finance
Bank Limited and/or its affiliates (Collection Agencies) that may be retained to collect
consumer debts on behalf of Utkarsh Small Finance Bank Limited.

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He/ She must read, understand and agree to abide by these guidelines prior to
commencing collection of debts owed by the clients.

Failure to comply may result in permanent termination of employment with Utkarsh

Small Finance Bank.

The following are the core underpinnings of the collection process. These are an
extract of the USFBL’s collection values:

1. Customers deserve to be treated with dignity. Collection Officers should always

remain professional during telephone conversations and visits. No written or
verbal threats, abuse or rudeness is permitted. Collection Officers should use
only acceptable business language, even if the other party does not.

2. Collection officers may refer the customer to a branch senior, or end calls when a
customer becomes abusive or threatening. Customers should be informed prior
to termination of such calls. All calls where the customer becomes abusive or
threatening should be appropriately documented.

3. Collection officers should always identify themselves and the company at the
beginning of every conversation with customer.

4. Customers are entitled to privacy. Privacy policies apply to all conversations with
third parties.

5. All collection activities should be consistent with the guidelines provided in this
document. All letters, telegrams and other communication must be in the format
approved by compliance and/or legal counsel.

6. Customers should be called only between 09.00 Hrs and 19.00 Hrs unless
exceptional circumstances described in this Code warrant deviation from this
timeframe & approved by supervisor.

7. Customers should be called no more often than is reasonable in the context of

the debt, and the conversations logged on the system.

8. Customer requests that calls/visits to place of work be stopped are to be honored

if he/she provides a suitable alternate where he/she may be reached during
collection working hour Such customers should be asked to provide an alternate
address/phone number where they may be reached in writing.

9. Customer’s questions should be answered in full. They should be provided with

information requested, given assistance and issues resolved. Accounts with
unresolved issues are to be escalated to management.

10. Customer or third party requests for supervisor names or requests to speak with
supervisor should always be honored.

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11. Collection Officers note in the DCR should be clear, concise, accurate and free of
editorial comments. All attempts, contacts, conversation and actions are to be
noted on the collection system.

2.0 Why you may contact a customer?

A customer is to be contacted for debt collection only under the following

circumstances:

 When not paying despite various calling & messages so may impose an
additional cost on the customer in terms of charges and penalty , which may also
impact the customer’s credit history/rating

 When the customer has not paid on payment date (including grace days) and
this is likely to impact the customer’s credit history and/or is likely to cause a
financial loss to the Clients.

3.0 When you may contact a customer?

It has been Utkarsh Small Finance Bank experience in India that individuals with full-
time employment routinely are awake by 07:00 hrs. in order to be at their jobs at the
time required. Accordingly calls must normally be limited from 07.00 hrs. to 19.00
hrs. A customer may be contacted at a time when the call is not expected to
inconvenience him/her.

Calls either earlier or later than normal hours, while effective in contacting the
customer, are also likely to be inconvenient to the customer and could be viewed as
harassment. Calls earlier or later than the prescribed time may be placed only under
the following conditions:

 When attempts to contact the customer have resulted in information that

the customer is normally only available outside these hours and no
alternate telephone number is available to contact the customer.

3.1 Where you may contact the customer?

The customer should ordinarily be contacted at his/her residence. However, should

the customer provide an office address as the mailing address, then attempts to
contact him/her may be made there.

4.0 What kind of language is to be used?

A Collection officer must use the language with which the customer is comfortable.
The officer must not attempt to force the customer to speak in English if he/she is not
comfortable. This may be offensive to some customer If the Collection Officer is not
comfortable with the language spoken by the customer, the account may be referred
to another Collection Officer or the conversation should be continued in
English/alternate language with the consent of the customer.

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4.1 What mode of Address is to be used?

Collection officers should use the formal mode of address in the language of choice
of the customer.

Customers deserve to be treated with dignity. Accordingly, officers must be

professional. As the situation requires, they may also be assertive and firm. In any
event, courtesy and respect are mandatory. Collection Officers may not become
abusive, visibly irritated or demean the customer in any fashion.

4.2 How often should the customer be called?

The purpose of a collection call is to bring to the customer’s notice the obligation and
to seek a commitment to pay on a specified date. Once a promise is elicited, the
customer may only be called on the day prior to the day committed to remind of the
commitment and on the date of the commitment for confirmation of payment.

In the event a commitment is not forthcoming or has been broken, calls may be
made at reasonable frequency, based on amount owed, product, aging of debt and
account history. Excessive number of calls or calls closely bunched together may be
construed to be harassment.

5.0 Can the customer’s debt obligation be discussed with anybody else?

Utkarsh Small Finance Bank. respects a customer’s privacy. The customer’s

debt/obligation may normally be discussed only with the customer.

The officer should verify the identity of the customer at the beginning of the call.

The customer’s debt may only be discussed with others, such as the customer’s
accountant, secretary or lawyer if the customer has previously permitted that
practice. A record of such permission or routine practice must be available on the
collection system and on the status. This situation occurs, for example, with self-
employed businessperson who asks the Collection Unit to resolve issues with their
accountants and with senior officers working in companies who delegate this task to
their secretaries.

Collection Officers may always communicate with a third party about the customer’s
debt when and to the extent doing so is necessary to enforce a decree obtained in a
lawsuit against the customer.

5.1 Leaving messages and contacting persons other than the customer

Calls must first be placed to the customer. In the event the customer is not available,
a message may be left for the customer. The aim of the message should be to get
the customer to return the call. Ordinarily, the message text should be restricted to:

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“Please leave a message that XXXXX (Name of officer) from Utkarsh Small Finance
Bank. and/or Collection Branch called and request him to call us back at ZZZZZZ
(phone number)”.

As a general matter, the message must not indicate:

 That the customer is overdue on his/her obligation; or

 That the call originates from the Collection Unit.

Therefore messages such as: “Please ask him to call back XXXXX at the Collections
Unit of…” or “ Please let him know that his credit payment is overdue and ask him to
contact XXXXX at…” are prohibited.

If the system trails show that the customer has not responded to a message in the
format mentioned above in the recent past, then it is permissible to indicate that the
call pertains to a credit /other obligation of the customer.
In situations where the customer has alienated the property financed/pledged, the
Collection Unit may discuss the fact that the customer has an overdue obligation with
the third party in possession of the asset. For example, if the customer has sold the
Asset financed/hypothecated to its Clients, to a third party, the person in possession
of the asset may be put on notice that its Clients have a prior claim on the vehicle.

Collection Officers may communicate with third parties to obtain customer’s location
information – home address, business address, home phone number and workplace
phone number. This may be done when the customer’s present location is either
unknown or uncertain. While obtaining such information the Collection Officer must
clearly identify himself/herself but not state that the customer owes a debt that is
overdue.

If the customer has provided a financial guarantee from a third party, the third party
may be called and the customer’s obligations discussed. In such a situation, the
guarantor may be treated as the borrower. Further, if the customer is deeply
delinquent (more than or equal to 2 months behind on his/her repayment) then
customer’s debt/obligation may be discussed with references provided, after
receiving approvals from the Supervisor.

6.0 No misleading statements/misrepresentation are permitted

Officers should not -

 Mislead the customer on the action proposed and consequences thereof;

 Mislead the customer about their true business or organization name, or
falsely represent or imply that the Collection Officer is an attorney
(lawyer), government official, officer of any court etc.;
 Threaten legal action when none is expected to be taken;
 Threaten repossession of pledged assets when such action is not
immediately planned;

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  Threaten with imprisonment or even mention imprisonment unless legal
action planned or currently underway could result in imprisonment;
 Threaten with arrest/detention by the police unless, prima facie, the
customer’s actions indicate criminal intent that could lead the police to
arrest/detain – for example, if a customer has sold the Asset financed or
has falsified documents at the time of application, the customer may be
prosecuted leading to arrest/detention.

7.0 Precautions to be taken on visits

 Residence

 should :
 Respect personal space – maintain adequate distance;
 Not enter the customer’s residence against his/her wishes;
 Not restrict the customer’s movement or restrain him/her from entering or
leaving the house/room;
 Not visit in large numbers. The may visit with supervisor if required – under
exceptional circumstances of disputes, large balances etc.
 Not remain in the customer’s house if he/she were to leave for any reason
including to collect money from a bank/elsewhere;
 Respect the customer’s privacy – do not embarrass the customer in the presence
of his/her neighbors;
 Not make visits at the customer’s residence if the customer –
a) Expressly forbids such visits and provides suitable alternate address
where he/she is contactable during collections working hours;
b) Has suffered a bereavement, or a customer’s family member is gravely
ill;
c) A social engagement is in progress.
 If the customer is not present and only minors/elderly/infirm are present at the
time of the visit, the Collection Officer should end the visit with a request that the
customer call back. He should not enter the house. He should not wait for the
customer in the customer’s residence.

 Workplace

should:
 Respect personal space, do not restrict the customer’s movement.
 Not visit in large numbers, should normally be just the officer and the
Supervisor. For disputes, large balances etc. the officer may visit with the
supervisor and a senior if required.
 Not discuss the customer’s debt where others can overhear the
conversation.

7.1 What is to be done if the customer requests us to stop visiting at the office?

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In such a case, the customer should be asked to provide an alternate location where
the meeting can take place during the working hours of the Collections Unit. This
location must be recorded on the collection system. All future contacts with the
customer should be restricted to this location.

However, if the customer is not available at this location and two attempts have been
made to contact the customer, the customer may be contacted at his/her office
again.

7.2 Gifts or bribes

Collection officers deserve to be treated with dignity. They should refer to

management or end calls when the customer or third party is abusive or threatening.
s should inform the customer that the call will be terminated prior to ending the call.
All calls, where customer becomes abusive or threatening should be documented on
the collection system and reported to management.

Officers should not accept gifts from customers or bribes of any kind. Any officer
offered a bribe or payment of any kind by a customer must report the offer to his/her
management.

7.3 A Collection officer should not:

 Offer to assist the customer by driving him/her to the bank/any other spot
from where money to repay the debt can be collected;
 Agree to collect payment from third parties;
 Have discussions of a personal nature with the customer – Maintain a
professional distance. Restrict conversation to the debt owed and the
customer’s proposed repayment plan;
 Use means that are unfair, for example –

 Collect sums in excess of total debt of the customer;

 Threaten to take extra judicial action (e.g. physical threat or any
unlawful action) to expropriate and dispose of customer assets when
no such right exists;
 Apply payments received (in case the customer has multiple debts) to
accounts other than those indicated by the customer.

8.0 What is to be done if the customer declines to pay?

If the customer declines to pay, the consequences of such a decision are to be

explained to him/her:
 Impact on credit history;
 Possible inclusion in restricted list of the company;
 Possible legal action and its impact;
 Cost of defending legal action, if such action is contemplated.

Should the customer refuse to pay on the account, then such accounts must be
referred to the Supervisor. The Supervisor shall, after discussing with the Branch

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Manager allocate the account appropriately. Further calls on the customer who
communicates in writing his/her refusal to pay will follow an escalation matrix as
below:
 Branch Manager
 Unit Head
 Regional Collection Head
 Country Collection Head.

9.0 What is to be done if the Customer disputes the debt?

The account must be referred to the Customer Service Unit for resolution of the
dispute through the Supervisor. In the event, the customer disputes only a part of the
debt, collection calling may continue for the remainder.

10.0 Other important aspects - Appearance & dress code

Collection Officers must be appropriately dressed –
 For men this means
 Well ironed trouser
 Well ironed shirt

 For women this means

 Well-ironed formal attire (Saree, Suit etc.);
 Well-groomed appearance.
11.0 How should letters & other communication be handled?

Communication to the customer either through mail or through telegrams shall be

handled directly by its Clients as appropriate. Mail dunning/telegrams/phonograms
shall be in a format approved by Compliance Unit of its Clients. All such mail shall be
in envelopes that do not bear any marking on the outside to indicate their content
(aside for origin – Clients and return mail address). Posts/other open media are not to
be used.

ANNEXURE-1

Code of Conduct for Collections

Do's Don’t's
First Call at Residence or at Do not call before 7.00 hrs
shop Between 7.00 hrs to or after 19.00 hrs in the
19.00 hrs unless for several first few calls or visits. In
visits customer is not exceptional situation a
When and where to Call
available at that time. customer may be called
or Visit
Customer may be contacted up to 21.00 hrs, if no
late up to 21.00 hrs in some contact could be
Cases where the customer established during various
contact could not be trials between 7.00 hrs to

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 established despite several 19.00 hrs.
visits between 7.00 hrs to
19.00 hrs.
How to start and continue Introduce yourself and the Do not use false identity
the call or meeting company to get through to the
customer
Ask for reasons for non - Do not abuse, threaten or
payment misrepresent or present
information to threaten
customer.
Stay professional, use the even if the customer
language the customer is abuses or gets abusive,
comfortable with. do not abuse or threaten.
Update the conversation with Do not visit the customer
the customer in trails on the in large groups.
accounts in the collection
system
If the customer refuses to Do not stand in the
pay state impact or presence of others
consequence - negative discussion the customer's
credit history, difficulty of debt/ overdue amount
future credit. where others can over
hear.
Send letters or telegrams or Do not discuss customer's
any written communication debt with anyone other
in the approved format. than the customer,
immediate family or
chartered accountant or
lawyer.
Stay professional, and do not Do not discuss personal
abuse even if the customer is matter
shouting/ abusive. If required Do not accept bribes or
leave the customers place gifts from the customer.
immediately if the customer
is threatening.
When collecting and Issue and give the receipt to Don’t pay the customer's
depositing the customer for the correct EMI or from your money
amount. (No EMI funding)
 Deposit the collections Do not pocket the
same day to the branch. customer's money for
 In Case there is a delay in personal use or use to
deposit for any reason, fund another customers’
the same needs to be EMI.
reported to the Do not make corrections
immediate supervisor in the receipt without
over the phone call/ customer countersigning
Message. Mail. them.

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  Take Approval from the Do not fudge receipts or
ZCM/ NCM for delayed not use receipts or make
deposit on the next day. alteration in the
reconciliation.
If customer is non Leave a message with the Do not discuss amount
contactable adult member of the family overdue or status of the
asking customer to call back customer with any other
person.
Ask when and where the Do not threaten the family
customer can be contacted. members or shout outside
the customer's house to
embarrass them.
If customer is overdue for a
large amount for a long
period of time, share details
of amount overdue only with
immediate adult family
member or customers
Chartered Accountant or
lawyer.
If PTPs are broken Highlight consequences Do not shout or give
(impact on credit history, written or verbal threats.
inclusion in CIBIL, cost of
legal route) to customer.
Intensify collection visits and
update trails on Collection
system.

Confirmation of Understanding for CCOC of

Utkarsh Small Finance Bank.

To whom so ever it may concern, I hereby confirm that:

 I have successfully attended the Collections Code of Conduct Training

Session on date _-------___________

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  The training was organized in my local language and I have understood all the
topics mentioned in the Training successfully.

 Name of my trainer is_, who’s designation is_at Utkarsh’ Small Finance Bank
at Location ______________.

 I am hereby ready to abide with the contents of the Collections Code of

Conduct as prescribed and described by Utkarsh’ Small Finance Bank.

 I fully understand the Consequences of Breach of CCOC of USFBL, that a

breach of the same may lead to a disciplinary action against me, which can
include my termination/ Legal action as per the Company Policy and Local
Laws.

Photograph of the
Trainee attending
the CCOC training
of USFBL

Training date: ___/___/____

Name of the Trainer: _______________________, Emp/ ID of the Trainer ______________

Name of the Trainee ________________________, Emp/ID of the Trainee ______________

Signatures of the Trainer: ________________, Signatures of the Trainee: _________________

Name and Signatures of the Branch Supervisor: __________________

Branch Stamp (If Branch Staff) _____________________________

ANNEXURE-2

DAILY COLLECTIONS REPORT FORMAT ( DCR)

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 DAILY COLLECTION REPORT (FOS)
Date : _____//___//____. FOS NAME : _________________________________________ EMPLOYEE ID : ______________
S. No. DATE OF VISIT Time of Visit Distance ( KM) LOAN NO CUSTOMER NAME VISIT REMARKS NEW CONTACT NO NEXT FOLLOWUP DATE
1 05-May 11228070980899 RAJ KUMAR MEET CM WIFE LEFT MESG TO HER CM IS OUT OF STATIONWILL COME ON 10TH 9563421897 10-May
2
3
4
5
6
7
8

LEGAL MIS FORMAT

9

ANNEXURE-3
10
11
12
13
14
15
PARAMETERS PARAMETERS REVIEW MATRIX ( Tick Mark √) SUPERVISOR REMARKS.
Total Visits made Phone Calls No. of Visits made per day ( Satisfactory/ Not Satisfactory)
Customer Contacts Customer Contacts Qualty of Visits ( Good / Bad/ Satisfactory/ Excellent)
No Contacts No Contacts No. of Receipts per day ( <=5 / >5)
Payments/ Receipts PTPs Generated Following COC ( Y/N)
PTPs Generated RTP - Intention Receipts Book checked ( Y/N)
RTP - Intention RTP- Funds Prob Decrepancies Notices in Receipt Book ( Y/N)
RTP- Funds Prob Left Message Payments deposited with in TAT ( Y/N)
Skips Others Overall Perfromance (Bad/ Satisfactory / Good / Excellent)
Left Message Others

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Signatures of the FOS : ____________________ Name of the Supervisor Reviewing : _____________________________________ Review Date : _____//____//________ : Signatures of the Supervisor Reviewing : _____________________________________
 CLIENT DETAILS Legal Status DEMAND NOTICE LOAN RECALL NOTICE - LRN SEC-138 ARBITRATION STATUS COCIL IATION STATUS LOK ADALAT SARFAESI
[Link] Client ID Account ID Client Name LEGAL INITIATED ( Y/N) DEMAND NOTICE ( SENT / NOT SENT) DEMAND NOTICE DATE RESULT NEXT ACTION LRN ( SENT/ NOT SENT) LRN DATE RESULT NEXT ACTION SEC-138 FILING DATE RESULT NEXT ACTION ARBITRATION STATUS ARB DATE RESULT NEXT ACTION SARFAESI date RESULT NEXT ACTION SARFAESI date RESULT NEXT ACTION SARFAESI date RESULT NEXT ACTION
yes Sent Date Loan Settled by customer LRN SENT DATE Loan Settled by customer FILED INITIATED DATE Loan Settled by customer INITIATED DATE Loan Settled by customer INITIATED DATE Loan Settled by customer INITIATED DATE Loan Settled by customer
No Not Sent Date Non Coopertaive Borrower LRN NOT SENT DATE Non Coopertaive Borrower NOT FILED NOT INITIATED DATE Non Coopertaive Borrower NOT INITIATED DATE Non Coopertaive Borrower NOT INITIATED DATE Non Coopertaive Borrower NOT INITIATED DATE Non Coopertaive Borrower
REQUESTED SENT Under Settlement REQUESTED SENT DATE Under Settlement WIP WIP DATE Under Settlement WIP DATE Under Settlement WIP DATE Under Settlement WIP DATE Under Settlement
Notice replied by customer Notice replied by customer Notice replied by customer Notice replied by customer Notice replied by customer Notice replied by customer
Others Others Others Others Others Others

COLLECTIONS REVIEW AND MIS FORMAT

Counter Legal against Bank Counter Legal against Bank Counter Legal against Bank Counter Legal against Bank Counter Legal against Bank Counter Legal against Bank

ANNEXURE – 4

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[Link] Client ID Ac ount ID Branch Fos Name Client Name Contactabil ty Status Col ection Status ( Paid / Unpaid) Fe dback Code FE DBACK RFD NEXT ACTION PROJECTION
1 2060762 1375050 0 0 0 51 GODWALIA JN As ociates Santosh Kumar Jaiswal NO Unpaid NC Not Contactable and ad re s is not found NA NA FLOW
2 257612 1354060 0 0 271 GORAKHPUR Ashutosh Sar af V I J AY YES Paid PR PAYMENT RECEIVED NA NA NORM
3 238501 1368060 0 0 1 67 MEL KASIA Sushil Kumar Upadhyay SANJAY SINGH YES Paid PR PAYMENT RECEIVED NA NA NORM
4 2029503 1354060 0 0 2564 GORAKHPUR Sarvda Nand Yadav BHARAT KUMAR YES Paid PR PAYMENT RECEIVED NA NA NORM
5 2679895 1362060 0 0 1610 DEORIA Dilip Pandey HARIKESH SAHANI, SHOBHA DEVI YES Paid PR PAYMENT RECEIVED NA NA NORM
6 3053581 1354060 0 0 2813 GORAKHPUR Ashutosh Sar af PARVEZ AHMAD, FAR UKH JAMAL YES Paid PR PAYMENT RECEIVED NA NA NORM
7 29378 0 1354060 0 0 2783 GORAKHPUR Anurag Tiwari VIKASH KUMAR GUPTA, LAXMI GUPTA YES Paid PR PAYMENT RECEIVED NA NA NORM
8 2586 98 1354060 0 0 2713 GORAKHPUR Ravi Tiwari ABHISHEK KUMAR YADAV YES Paid PR PAYMENT RECEIVED NA NA NORM
9 28546 3 1368060 0 0 137 MEL KASIA Abhishek Pathak DURGESH KUMAR SHUKLA, SAVITA SHUKLA, BRIKSHBHAN YES Paid PR PAYMENT RECEIVED NA NA NORM
10 2843984 1354060 0 0 2764 GORAKHPUR Ashutosh Sar af AYODHYA YADAV, RE TA YADAV YES Paid PR PAYMENT RECEIVED NA NA NORM
1 2054919 1368060 0 0 1038 MEL KASIA JN As ociates Sa b i r Si d i q u e YES Part Paid Part PaidCustomer is facing financial is ue, due to buisnes los , we are in regular fol ow up, customer is giving part paymeBuntsines Los others others
12 201965 1351060 0 0 3153 Varanasi JN As ociates Khadi Yadav NO Unpaid NC Not Contactable and ad re s is not found NA NA FLOW
13 2029408 1354060 0 0 24 2 GORAKHPUR Ravi Tiwari Jugul Kishor YES Part Paid Part PaidCustomer is facing financial is ue, due to buisnes los , we are in regular fol ow up, customer is giving part paymeBuntsines Los others others
14 2586 35 1368060 0 0 1268 MEL KASIA Abhishek Pathak KANHAIYA SINGH YES Paid PR PAYMENT RECEIVED NA NA NORM
15 2798 89 1354060 0 0 275 GORAKHPUR Anurag Tiwari JAIPRAKASH, LE LAVATI YES Paid PR PAYMENT RECEIVED NA NA NORM
16 2607232 1368060 0 0 1287 MEL KASIA Abhishek Pathak RAMESH PRASAD JAISWAL YES Paid PR PAYMENT RECEIVED NA NA NORM
17 2054843 1368060 0 0 1 17 MEL KASIA Sushil Kumar Upadhyay RAMSEVAK GUPTA YES Paid PR PAYMENT RECEIVED NA NA NORM
18 2016979 1351060 0 0 052 Varanasi JN As ociates Mohd Hanif Khan NO Unpaid NC Not Contactable and ad re s is not found NA NA FLOW
19 2053268 1368060 0 0 0971 MEL KASIA Santosh Kumar Rai DWARIKA KUSHWAHA YES Paid PR PAYMENT RECEIVED NA NA NORM
20 2 07 34 1368060 0 0 1039 MEL KASIA Sushil Kumar Upadhyay RAVI PRATAP YES Paid PR PAYMENT RECEIVED NA NA NORM

ANNEXURE -5

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 CALL CENTRE REVIEW AND MIS FORMAT

Over All Performance

Product Spl i t (Al l ) Product Spl i t (Al l )

Bpo/Fr BPO Bpo/Fr BPO
Cycl e Da te (Mul ti pl e Ite ms ) Cycl e Da te (Mul ti pl e Ite ms )
Re pre s e nta ti on Sta tus (Mul ti pl e Ite ms ) Re pre s e nta ti on Sta tus (Mul ti pl e Ite ms )

Sum of Outs ta ndi ng Loa n Col umn La be l s Count of Loa n No Col umn La be l s
Row La be l s Pa i d Unpa i d Gra nd Tota l Res % Row La be l s Pa i d Unpa i d Gra nd Tota l Res %
Ea s t 17790490 1307960 19098450 93% Ea s t 12 6 18 67%
North 131253661 10402822 141656484 93% North 110 20 130 85%
South 208896816 26049766 234946582 89% South 219 49 268 82%
We s t 87943946 14062577 102006523 86% We s t 123 22 145 85%
Gra nd Tota l 445884913 51823125 497708038 89.6% Gra nd Tota l 464 97 561 82.7%

Caller Wise Performance

Product Spl i t (Al l ) Product Spl i t (Al l )

Bpo/Fr BPO Bpo/Fr BPO
Cycl e Da te (Mul ti pl e Ite ms ) Cycl e Da te (Mul ti pl e Ite ms )
Re pre s e nta ti on Sta tus (Al l ) Re pre s e nta ti on Sta tus (Al l )

Sum of Outs ta ndi ng Loa n Col umn La be l s Count of Loa n No Col umn La be l s
Row La be l s Pa i d Unpa i d Gra nd Tota l Res % Row La be l s Pa i d Unpa i d Gra nd Tota l Res %
ANUKUL BISHWAS 180716629 3140843 183857472 98% ANUKUL BISHWAS 81 9 90 90%
Bha rti Ra j 63196892 4464191 67661082 93% Bha rti Ra j 77 12 89 87%
JAY PRAKASH 85769157 85769157 100% JAY PRAKASH 107 107 100%
Ji ns Thoma s 34622981 5712286 40335267 86% Ji ns Thoma s 81 13 94 86%
POONAM SHUKLA 62834235 3540299 66374534 95% POONAM SHUKLA 74 11 85 87%
PUMMY KUMARI 45538683 12994599 58533282 78% PUMMY KUMARI 73 10 83 88%
Sa nje e v Ra o 47148236 4619947 51768183 91% Sa nje e v Ra o 73 13 86 85%
SUNIL MANTRI 33928401 4194327 38122728 89% SUNIL MANTRI 64 9 73 88%
UMA UMA 102606541 11253343 113859884 90% UMA UMA 68 11 79 86%
SHALINEE RAJ 33977307 1903291 35880598 95% SHALINEE RAJ 63 9 72 88%
Gra nd Tota l 690339061 51823125 742162186 93.0% Gra nd Tota l 761 97 858 88.7%

Ticket Size Performance

Product Spl i t (Al l ) Product Spl i t (Al l )

Bpo/Fr BPO Bpo/Fr BPO
Cycl e Da te (Mul ti pl e Ite ms ) Cycl e Da te (Mul ti pl e Ite ms )
Re pre s e nta ti on Sta tus (Al l ) Re pre s e nta ti on Sta tus (Al l )

Sum of Outs ta ndi ng Loa n Col umn La be l s Count of Loa n No Col umn La be l s
Row La be l s Pa i d Unpa i d Gra nd Tota l Res % Row La be l s Pa i d Unpa i d Gra nd Tota l Res %
> 30 L 250076357 19061089 269137445 93% > 30 L 38 3 41 93%
0 - 10 L 276808593 26999387 303807980 91% 0 - 10 L 630 90 720 88%
10 L-20 L 77310107 5762649 83072756 93% 10 L-20 L 58 4 62 94%
20 L -30 L 86144005 86144005 100% 20 L -30 L 35 35 100%
Gra nd Tota l 690339061 51823125 742162186 93.0% Gra nd Tota l 761 97 858 88.7%

SAME TIME LAST MONTH COMPARISON SHEET

LMTD Performance 31st July'18

Product Spl i t (Al l ) Product Spl i t (Al l )

Bpo/Fr BPO Bpo/Fr BPO
Cycl e Da te (Mul ti pl e Ite ms ) Cycl e Da te (Mul ti pl e Ite ms )
Re pre s e nta ti on Sta tus (Al l ) Re pre s e nta ti on Sta tus (Al l )

Sum of Outs ta ndi ng Loa n Col umn La be l s Count of Outs ta ndi ng Loa n Col umn La be l s
Row La be l s Pa i d Unpa i d Gra nd Tota l Share % Row La be l s Pa i d Unpa i d Gra nd Tota l Share %
Ea s t 32226240 1135670 33361910 97% Ea s t 25 4 29 86%
North 119223198 7643897 126867095 94% North 164 23 187 88%
South 275133764 ######## 378890897 73% South 385 43 428 90%
We s t 140782815 2518173 143300988 98% We s t 198 16 214 93%
Gra nd Tota l 567366017 ######## 682420890 83.1% Gra nd Tota l 772 86 858 90.0%

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