India Debt Collection Business

Until the emergence of debt collection business, debt collection in India, was never treated as a specialized job and was always treated as one of the jobs that legal departments of the banks and financial institutions were required to undertake. A typical legal department of an organization would approach the collection job strictly as a legal issue rather than as a revenue collection measure. Litigation would be the only tool used for recoveries and no other tool was either known or used by the industry. Litigation as a recovery measure always had its own limitations due to long and winding court procedures the Indian legal system is always criticized for. On the other hand, foreign banking firms introduced the concept of specialized debt collection services. Debt collection services became one of the many services that began to be outsourced to specialized agencies. The collection business had a very humble beginning and it barely qualified as a specialized service.However over a period of time with the emergence of India as a global outsourcing destination the domestic businesses also adopted the outsourcing as an efficient business tool. With the result today, the third-party debt collection industry plays an important role in the Indian economy. The industry employs hundreds of thousands of Indians as collection professionals, who are servicing several industries ranging from banks, to telecom service providers to insurance companies. Typically, only small recoveries arising from periodic billing defaults by the customers are outsourced to the collection agencies. Not only the collection business has become a direct source of employment to thousands but its contribution to the economy is more pronounced because it helps infuse money back in the economy that otherwise would have remained uncollected. The economic benefits of third-party debt collection are significant. Citibank is the pioneer in introducing third party collection techniques in India.The debt collection industry in India also has grown sharply this year as higher borrowing costs; rising inflation and the general slowdown in the economy force more companies and individuals into difficulties. Underlying debt has gone through the roof and lenders and organizations increasingly want to move any bad debt off their books. Whether it is a high street bank, a credit card lender or a mobile phone company, growing numbers are turning to professional debt collectors in a more difficult environment.The debt collection industry in India is growing at a faster pace and is surely poised for growth. The credit card outstanding have shot up by a whopping 87% at USD 6114 Million during this year, from USD 2844 Million in the period year ago. The Reserve Bank of India (RBI) which regulates the banking industry in the country encourages banks to shift bad loans off their books more quickly because they will be required to hold more capital against risky assets that may default.COLLECTION INDUSTRY – UNREGULATED SCENARIOThe collection business has its own inherent shortcomings due to unregulated and primitive nature of this business in this country. The persons employed in the industry are untrained both in soft skills and legal skills. Being unregulated, the procedures are not standardized and there are no industry specific checks and balances. Still litigation is used as the last resort tool for recoveries. However the industry has been accused of manipulating the legal system to their advantage by using courts as their agents of recovery. It is seen that big corporations with large volumes of recoveries have unwritten understanding with the local courts at the lowest level. With the patronage of minuscule minority of pliable judges simple civil defaults are registered as criminal cases thus pressurizing the debtors into paying the dues. Slow and long civil recovery court process has no takers in this age of instant results where revenue targets are the most sacrosanct. Under such strict and cut throat environment, there is pressure on the banks to keep their account books healthy therefore such aggressive and extra-legal methods are employed for quick recoveries.

GOVERNMENT / RBI INTERVENTIONDebt collectors in the past had a lot of leeway and it wasn’t uncommon for collectors to embarrass, harass or humiliate debtors by adopting extra-legal measures. In the absence of any regulatory regime the courts had to step in by laying down guidelines for the industry to follow. After the intervention of judiciary, the RBI woke up to the need of regulating the unruly collection agencies and laid down its own guidelines for the banking industry to follow.The guidelines prescribed by RBI are enforced against the banks that have contractually employed collection agencies. The banks in turn via their contracts with the collection agencies ensure that the RBI guidelines are followed. Now, under the RBI guidelines it is illegal to threaten violence or cause harm to debtor, use obscene language, or repeatedly use the phone to harass debtors. In addition, collection agents cannot seize or garnish a consumer’s property or wages without recourse to court procedure.The following are few of the core underpinnings of the collection process. These are the norms formalized by the top bank in India – RBI.1. DSAs/DMAs/Recovery agents to get minimum 100 hours of training.2. Recovery agents should call borrowers only from telephone numbers notified to the borrower.3. Each bank should have a mechanism whereby borrowers’ grievances with regard to the recovery process can be addressed.4. Banks are advised to ensure that contracts with recovery agents do not
induce adoption of uncivilized, unlawful and questionable behavior or recovery process.5. Banks are required to strictly abide by the codes pertaining to collection of dues.RBI in the draft guidelines issued for banks engaging recovery agents, has asked banks to inform borrowers the details of recovery agents engaged for the purpose while forwarding default cases to the recovery agents.The Reserve Bank of India has also considered imposing a temporary ban (or even a permanent ban in case of persistent abusive practices) for engaging recovery agents on those banks where penalties have been imposed by a High Court/Supreme Court or against its directors/officers with regard to the abusive practices followed by their recovery agents. An operational circular in this regard has been issued in November 15, 2007.Other LawsStill the non banking debts collection business is outside the purview of any regulator. There are no licenses or registrations to be obtained from any regulator to pursue collection business in India. The extant guidelines applicable to banking industry are found inadequate as they address only the problem of debtors’ harassment and the guidelines do not regulate the industry as such. The Government is well aware of the need of having a specialized legal mechanism for recovery of institutional debts which has become a huge problem for the entire banking industry.Every bank is grappling with the non-paying accounts, known as Non Performing Accounts (NPA) in the Indian banking parlance. The problem has taken enormous proportion and threatened the economy. Creation of Debt Recovery Tribunals in the year 1993 was a step in the direction of facilitating fast recoveries by the banks . The intention behind creation of such Tribunal was to ensure that banking industry was provided with its own recovery mechanism that was part of the legal system but at the same time exclusive to the banking industry. Bank debts above USD 22,727 could be recovered through the Tribunals.However, over a period of time it was realized that this new mechanism did not yield the desired result since the recoveries were still slow and due to shear volume of work, the Tribunal became like any other court. The whole objective of having a fast track and efficient recovery mechanism was therefore defeated. Bank debts still remained a major problem to be solved since it affected the entire economy of the country. The Government felt the need of having a mechanism that was minimally dependent on the courts for effecting recoveries since the legal system could not be reformed overnight. Therefore instead of reforming the court procedure the government did some clever thinking and came up with a legislation that minimized the intervention of court and empowered the banks with special powers using which the recoveries could be affected.The government thus came up with a new law Scrutinization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) where under the banks are allowed to liquidate security given by the borrower for recovery of their dues. This law also paved the way for creation of asset reconstruction companies that take over the security interest of the debtors. These agencies are thus another form of debt collection agencies that have been institutionalized.The need to share credit information among the banking industry was also felt in order for the industry to benefit from each other. Thus Credit Information Companies (Regulation) Act was enacted in the year 2005.INDIAN LEGAL SYSTEM AND COLLECTION PROCESSESThe Indian legal system is absolutely fair and assures justice to the party involved. There are remedies available under the law to collect the debt, if the debtor does not agree to pay under normal circumstances. The creditor may file a suit for his recovery. Debts based on written contracts could be recovered by following fast track procedure. If the debtor is a company, creditor / his lawyers may apply in the ‘Company Court’ for winding up of the company due to non-payment of substantial amount of debt. Summary trial is another way. The process may take time-1 to 2 years. Evidences are recorded appropriately and produced in the court of law, whenever required. There is also the arrangement of appeal to be filed at later stage.
US OUTSOURCING SCENARIOIndia has attracted many technology jobs in recent years from Western nations, particularly the United States. Now, it is on its way to becoming a hub in another offshore outsourcing area – debt collection. According to the industry report, units of General Electric, Citigroup, HSBC Holdings and American Express have used their India-based staff to pursue credit card debt and mortgage payment by calling defaulters.

US debt collection agencies are the newest to start outsourcing their work to India and are satisfied with the results produced by the polite but persistent Indian experts. After insurance claims and credit card sales, debt collection is a growing business for outsourcing companies at a time of downturn in the US economy when consumers struggle to pay for their purchases.Debt collection is a vital and growing component of US economy. There is more than $2.5 trillion in outstanding consumer debt. As a result, the third-party collection industry makes more than one billion contacts with consumers each year. Recently this year, more than $39.3 billion in debt was returned to creditors.Indians have the advantage of lower salaries and other expenses, which cut drastically costs of collecting debts. Debt collectors in India cost as little as one-quarter the price of their US and European counterparts and are often better at the job. Many such Indian firms run 24-hour services. Indian debt-collection companies comply with strict regulations on operations in the American and / or European markets.
SUMMARYIndia has a long way to go in establishing a mature collection services industry. The collection business needs to be regulated and empowered with legal powers to become an effective tool. Already, there is a realization in the country that court dependent recovery is an inefficient way of way of debt collection. Creation of Assets Reconstruction and Securitization Companies under the SARFARESI Act is a step in the right direction of recognizing debt collection as an independent and specialized business function. While some progress is made for the bank debts but still for a large volume of unrealized non bank debt there are no professionally managed and regulated third party collection service providers. Non bank debts are largely unsecured that makes it even more difficult to realize. No big corporations and business houses are interested in acting as collection agents without there being an attraction of valuable security asset. Lawyers can fill this gap by providing collection services for non bank debts. Indian law does not permit contingency fee that makes the business less lucrative. India is therefore ready to benefit from foreign experience, expertise and ideas to create an efficient debt collection industry of its own at par with global status. This need is more felt now by India due to its global ambitions wherein India must adopt globally recognized practices and models. Transnational businesses need a uniform operating system for seamless transactions. Efficient debt collection industry will only instill confidence in companies doing business with Indian companies. Collection professionals have this challenge facing them of creating an efficient system that reduces people’s dependence on court supported recoveries.

Getting Creative With Options Advice

The Importance Of A Survivalist Forum

There is a lot of humans who like chance abnormally in aggravating new things or conceivably in traveling to altered places that are altered and far. Some humans are adventuresome abundant that they wish to go to a abode that is far from civilization. If you are anyone who brand this, again there is something you charge to apperceive about it. In adventures like this, there is a adviser that you charge to follow. You apperceive that traveling in this abode is affectionate of alarming and chancy that is why you charge to be acquainted of these guidelines to survive.

Because of this, it is accessible to appointment something bad during the cruise that is why these guidelines would advice you a lot. That is why there are so abounding adventuresome humans who await on the internet to acquisition survivalist appointment to apperceive these guidelines and tips. What you can get from this website are advice that are ideal for your survival. Matters like this accept to be taken seriously. There are altered angle that humans who go out on an chance wish to have. Aside from that, they just wish to accept an acquaintance of it. However, there are some risks and crisis that you will face if you accede this. That is why the survivalist appointment has been fabricated to advice you with your needs and to adapt yourself afore the trip. You accept to bethink that bad things can appear suddenly. Aside from that, the survivalist appointment can advice you apperceive how to accumulate yourself safe always. Afore you activate with your trip, you accept to apperceive this adaptation adviser to advice you. You can adapt yourself for whatever that will appear through this.

Abounding altered kinds of humans go afterwards the survivalist appointment to apprentice some advantageous tips. You don’t accept to anguish because all of the tips are accustomed to you by experts. The accepted tips you can apprentice are mostly about ecology survival. Afore you go to the abode far from civilization, you accept to apperceive the abode first. Accomplish abiding that you apprehend in the survivalist appointment the comments of those adventuresome humans who accept visited the abode to apperceive their opinions about the abode itself. They can accord you so abounding advices that you can account down afore you appointment the place. You can ask them about the altered challenges that they faced during the cruise and ask them what they did to be able to accomplish it. If you are anyone who brand to be captivated during an chance trip, you accept to chase these guidelines. It is aswell important that you yield affection aggregate you apprentice from the appointment to consistently bethink them during the trip. The added important advice that you are traveling to apprentice from the appointment are advice about the accessories that are capital for the trip.

Three Types Of Livestock That Can Be Raised By Beginner Farmers

When people move from the city life to live in the country side they get interested in raising livestock. The reasons may vary as to why people want to raise livestock, some people raise them as pets and some raise them because they want to make some money by selling the livestock produce.What ever reason may be, raising livestock can be done by almost anyone who is dedicated to being a livestock farmer and someone who is willing to put aside a lot of his time in managing and taking care of their livestock. In order to raise healthy livestock you have to give the animals proper care such as feeding them nutritious food plus clean water on daily bases, building them some good shelter and have them checked by a veterinarian for health issues.There are various types of livestock you may want to raise as a beginner livestock farmer. Some of them need more care than others and maybe suitable for new farmers to raise. Three types of livestock that are suitable for beginner livestock farmers are goats, cattle and sheep. Below are more details on how you can go about raising them.Raising Cattle:A lot of farmers start by raising cattle in their farm ranch. Cattle are a stress free livestock to raise when taking good care of. Their produce such as milk and meat is in high demand in the markets for its nutritious benefits. When you own cattle you will be able provide your family with fresh milk on daily bases and save lots of money in buying milk.

When starting out in raising cattle you have to first choose the kind of breed you want to raise. There are over 800 types of breeds which are in 3 different categories known as the zebus, the hybrids and taurine cattle. Some types of breeds are good for the production of milk whilst others are suitable for meat production.When raising different types of cattle a farmer should install stalls that separate those that eat grass and hay to those that eat sophisticated feeds.Since cattle are grazing animals you have to have some large piece of land if you want to raise them. The land in which they graze on has to be well fenced so secure the livestock. For the fence you can either use electrical wiring or use a wood and steel fence. You should also prepare some equipment needed to raise cattle such as pails, water containers and feeding beds.Although cattle don’t require some sort of roofed shelter that doesn’t mean you can’t build one. A roofed shelter will also help you in storing your livestock equipment and can be used to milk your cows.Raising Goats:Goats are another type of livestock that can be raised by a beginner farmer and they are less prone to diseases than cattle. They can also be raised for the production of milk and meat which high in demand and cost more than cattle produce.When starting out raising goats you have to first make up your mind on what type of goat breed you want to raise. The type of breed depends on the end product you want to produce from your goats, you can either raise goats for the production of fiber, tasty meat and milk that is high in nutrients.Once you have made up your mind on the type of goat you want to raise you have to decide on the number of goats you are planning on raising. Knowing the number of goats you are planning on raising will help you estimate how large your land should be. One thing to note is that goats reproduce almost every year so the land should be large enough to accommodate the growth of your herd.Goats also need some shelter to rest at the end of the day. The shelter should be large enough for all your livestock to fit in properly without being over crowded. The shelter should be comfortable so that they can sleep at night and protect them from harsh weather such as too much sunlight, rain and snow. Don’t forget to fence the entire grazing land so that predators don’t attack and kill your herd.Raising Sheep:Raising sheep is very interesting and rewarding as raising cattle and goats. These type of livestock can be raised for various reasons such as producing quality wool, producing cheese from its prolific milk and the obvious tender meat. These produce can also be sold since they are in high demand.Sheep are animals that like grazing the field. If you want to raise healthy sheep then you have to have some large land of green grass for the livestock to graze on. Although feeding your sheep grain supplements plays a big part in their diet, grass fed sheep produce a higher nutritional value produce. Since sheep like grazing in a large group as a livestock farmer it can be daunting to manage them on the field so it would be wise to have a helper dog to assist you.

An essential part of raising sheep is keeping them within their confines, this helps them in not getting lost in the wild and end of being eaten by wild animals such as bobcats, bears and wild dogs. At the same time it helps in keeping these predators out of the grazing area. Using an electrified fence can help a lot and its easy to install as well.In order to ward off natural elements that can be harmful to your livestock you have to invest some money in building good housing for your sheep. When designing the house make sure you build a chute to manage the sheep when you need to make some checkups on each and everyone of them or when vaccinating them.As you see raising livestock can be done by almost anyone even if you don’t have any past experience or were not raised in a farm ranch. Just like any other type of pet they need to be taken care for and make sure they leave in comfortable conditions.When starting out its best to first start with raising one type of livestock then move on to another type when you have gotten the experience from your first set of livestock.