Collection Policy Ujjivan

Collection Policy
February 2017
Corporate office Address:
Grape Garden, No. 27, 3rd A Cross, 18th Main

Koramangala 6th Block, Bengaluru 560 095
This document is for Internal Uses only and may not be reproduced in any form without the consent of
Ujjivan Small Finance Bank Ltd
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Policy Approval Committee

Samit Ghosh Chief Executive Officer & Managing Director
Sneh Thakur Head of Credit and Collections --‐ Microfinance
Arunava Banerjee Chief Risk Officer
Srikumar Vadake Varieth Head of Legal
Premkumar G Chief Vigilance Officer
Alagarsamy A P Head of Audit
Carol Furtado Head of HR & Service Quality
Sridhar Mallu Head of Credit --‐ Housing & MSE
Proposed by
Sneh Thakur Head of Credit and Collections --‐ Microfinance
Sridhar Mallu Head of Credit --‐ Housing & MSE
Vijay Kumar National Collections Manager
Effective Date Feb 01, 2017

Approver Board of Directors
Approved on Jan 10, 2017
Head of Credit and Collections – Microfinance & Head of Credit --‐
Policy Owner
Housing & MSE
Review frequency Annual
Collection Policy February 2017 Page 2

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Contents
1. INTRODUCTION ....................................................................................................................................7
1.1. Scope Objectives and Principle.....................................................................................................7
1.2. Guiding Principles of Collection: Code of Conduct.......................................................................8
1.3. Collection Dos and Don’ts ..........................................................................................................10
1.4. Policy Review & Approval process..............................................................................................12
1.5. Collection Organization Hierarchy: Micro Finance GL & IL & Housing &MSE ............................12
1.6. Product Segment........................................................................................................................13
2. MICRO FINANCE--‐ GROUP LENDING...................................................................................................14
2.1. Identifying Overdue....................................................................................................................14
2.2. Broad Default Classification: ......................................................................................................14
2.3. Managing Client and Spouse demise cases ................................................................................16
2.4. Collection strategy......................................................................................................................18
2.5. Dunning strategy ........................................................................................................................19
3. MICRO FINANCE --‐ INDIVIDUAL LENDING ..........................................................................................19
3.1. Type of defaults:.........................................................................................................................20
3.2. Collection strategy:.....................................................................................................................22
3.3. Bucket wise collection strategy ..................................................................................................22
3.4. SMS Strategy ..............................................................................................................................24
3.5. Calling Strategy...........................................................................................................................24
3.6. Field Visit Strategy (> 30 DPD)....................................................................................................25
3.8. ECS/ACH Representation............................................................................................................26
3.9. Legal Strategy .............................................................................................................................26
4. COLLECTION PROCESS FOR HOUSING & MSE ...................................................................................26
4.1. Introduction................................................................................................................................26
4.2. Collection Strategy .....................................................................................................................27
4.3. Bucket wise collection strategy ..................................................................................................28
4.4. SMS Strategy ..............................................................................................................................30
4.5. Calling Strategy...........................................................................................................................31

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4.6. Field Visit Strategy (> 30 DPD)....................................................................................................32

4.8. ECS/ACH Representation............................................................................................................32
4.9. LEGAL STRATEGY ........................................................................................................................32
4.10. Recovery & Resolution Mechanism........................................................................................34
4.11. Engagement of Recovery Agents............................................................................................34
4.12. Identification of Wilful Defaulters ..........................................................................................35
4.13. Tools for Recovery..................................................................................................................38
4.13.1. Restructuring, Rephasement& Rehabilitation................................................................38
4.13.2. Loan Rescheduling..........................................................................................................40
4.13.3. Exit Strategy....................................................................................................................42
4.13.4. Settlement/Compromise – For secured & Unsecured IL................................................42
4.13.5. Sell down to Asset Restructuring Company/other entities ............................................45
4.13.6. Write off/Waiving of Legal action...................................................................................45
4.13.7. Invoking the Provisions of SARFAESI Act ........................................................................46
5. LEGAL ACTION & RECOVERY (Procedure) .........................................................................................49
5.1. Guidelines on seizure / repossession of assets hypothecated to Ujjivan...................................49
5.2. Arbitration proceedings..............................................................................................................51
5.3. SEC 138/25 NI ACT......................................................................................................................54
5.4. Demand Promissory Note ..........................................................................................................57
5.5. LokAdalat....................................................................................................................................58
5.6. Debt Recovery Tribunal ..............................................................................................................59
6. RECOVERY MECHANISMS --‐ Repossessions .......................................................................................60
6.1. Giving notice to borrowers.........................................................................................................60
6.2. Repossession of Secured assets .................................................................................................60
6.3. Valuation & sale of secured assets.............................................................................................61
6.4. Opportunity for the borrower to take back the secured assets.................................................61
7. SKIP TRACING PROCESS .....................................................................................................................62
8. POLICY ON NON--‐STARTERS ...............................................................................................................63
9. COLLECTION STRATEGIES FOR MASS DEFAULT BRANCHES..............................................................67

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9.1. Identification of mass default cases ...........................................................................................67

9.2. Strategies for handling mass default cases: ...............................................................................68
10. REPAYMENT MODE........................................................................................................................69
11. RECEIPT BOOK PROCESS – for field collections.............................................................................70
11.1. Indenting, distribution, custody and verification of Receipt Books........................................70
11.2. Record maintenance and audit checks:..................................................................................71
11.3. Process for lost receipt book ..................................................................................................71
12. COLLECTION MANAGEMENT SOFTWARE (IC4) .............................................................................71
12.1. Introduction............................................................................................................................71
12.2. IC4 Overview: .........................................................................................................................73
12.3. Mobile Module:......................................................................................................................73
12.4. Web module:..........................................................................................................................73
12.5. Collection Management Responsibilities: ..............................................................................73
13. TELE--‐CALLING FOR MICRO FINANCE IL, HOUSING & MSE ............................................................75
14. COLLECTIONS CAPACITY PLANNING..............................................................................................77
14.1. Collection reviews ..................................................................................................................78
14.2. Supervisory Review ................................................................................................................78
15. COLLECTOR TRAINING ...................................................................................................................79
16. COLLECTION MIS............................................................................................................................79
17. DAILY COLLECTION REPORT...........................................................................................................80
18. LATE PAYMENT CHARGES– ALL PRODUCTS ..................................................................................80
19. LOAN WRITE OFFs..........................................................................................................................80
19.1. Process for Write off (Existing)...............................................................................................81
19.2. System write--‐off process using IC4.........................................................................................82
19.3. Write off recovery: .................................................................................................................82
19.4. Monitoring Bad debt Recovery...............................................................................................83
20. STAFF LOAN RECOVERY .................................................................................................................84
20.1. Recovery Process --‐ Pre--‐Staff Loan OD: ...................................................................................84
20.2. Recovery Process --‐ Post--‐Staff Loan OD: .................................................................................85
20.2.1. Steps of Recovery ...........................................................................................................85

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20.3. Receivables from Staff............................................................................................................87

21. DOCUMENT PRESERVATION..........................................................................................................87
22. PROVISIONING NORMS .................................................................................................................88
23. ANNEXURE 1: Abbreviations .........................................................................................................89
24. ANNEXURE 2: References to Key RBI Circulars .............................................................................90
25. ANNEXURE 3: Notice Formats .......................................................................................................91
26. ANNEXURE 4: IC 4 Workflows with OD reasons .........................................................................104
Detailed WF.xlsx
......................................................................................................................................105
26.1. ANNEXURE 5: IC4 Auto Report formats................................................................................107

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1. INTRODUCTION
The purpose of the collection policy is to create a set of standardized policies and procedures for
collection activities. An effective collection policy is essential to keep a strong control on the portfolio of the USFBL and
thereby ensuring that the credit expense of the organization is low. It is essential to adopt effective
collection strategies that promote on – time repayment as well as manage delinquencies better.
The essential component of a sound NPA management system is quick identification of non-‐
performing advances, their containment at minimum levels and ensuring that their impingement
on financials of Ujjivan are minimum.
Thus the Collections Policy of Ujjivan Small Finance Bank Ltd., (hereafter referred as “the USFBL”
or “Ujjivan”)shall aim at making the recovery process faster, so that Gross NPA level is maintained
within the risk appetite of the USFBL.
1.1. Scope Objectives and Principle

The quality and performances of advances have a direct bearing on the profitability of Ujjivan.
Despite an efficient credit appraisal, disbursement and monitoring mechanism, problems can still
arise due to various factors and Non-‐‐Performing Asset (NPA) may arise. These factors may be internal or external.
► Policy outlines structured collection mechanism for all recognized critical and stressed
accounts.
► The Loan Review Mechanism to be triggered on detection of early warning signals to ensure
an effective and expeditious response for correction.
► The Policy emphasizes a broad approach, including critical parameters to be taken into
account, towards the collection, recovery and resolution of loans through rehabilitation,
compromise settlements etc.

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► The Policy also proposes an approach for cleansing of NPA portfolio through judicious write-‐‐
offs.
Objectives:
► To minimize delayed payment post due date (or bounce rate of PDC/ECS).
► To ensure lower forward flow from initial bucket (from 0-‐ 30 DPD to >30 DPD).
► To reduce the impact of provision and losses on different products – secured & unsecured.
► To reschedule customers who have short term genuine repayment inability with the right
intent of payment.
► To educate customers the benefits of prompt repayment and consequences of non-‐‐payment
► To ensure collection cost is under control
► To provide inputs to credit policy based on collection experience.
► To ensure compliance with regulations and applicable Code of conduct
► To manage collection of penalty fees based on USFBL norm.
1.2. Guiding Principles of Collection: Code of Conduct

“The debt collection policy of the USFBL is based on principle of dignity and respect to customers.
The USFBL believes in following fair practices with regard to collection of dues and repossession
of security thereby fostering customer confidence and long-‐‐term relationship and thereby ensures that there is no coercive
practice followed while collecting the dues.
The repayment schedule for any loan sanctioned by USFBL is fixed taking into account repayment
capacity and cash flow pattern of the borrower. The USFBL explains to the customer upfront the
method of calculation of interest and how the Equated Monthly Instalments (EMI) or payments
through any other mode of repayment are appropriated against interest and principal due from
the customers. The USFBL expects the customers to adhere to the repayment schedule agreed to
and approach it for assistance and guidance in case of genuine difficulty in meeting repayment
obligations.
The USFBL’s Security Repossession Policy aims at recovery of dues in the event of default and is
not aimed at whimsical deprivation of the property. The policy recognizes fairness and transparency in repossession,
valuation and realization of security. All the practices adopted by the USFBL for follow-‐ up and
recovery of dues and repossession of security are in consonance with the Law. The security
repossession procedure is set in motion only after all attempts by the USFBL to discuss with the
borrower the ways and means to overcome the financial hurdles/default in
payment have failed. As an exception, it is to be noted that the USFBL has the right to possess

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the financed asset, as a preventive measure, even in instances where there has been no default
but violation of the terms and conditions of the Loan Agreement.
► Ujjivan's recovery procedure shall be based on good manners, impartial treatment and
persuasion.
► Ujjivan shall treat its defaulters with respect and dignity.
► All communications to the customer are in writing, by telephone or through personal visit. The
customer is contacted by telephone on the numbers (residence/work place/mobile) provided
by him/her in the application form filled in at the time of taking the loan/modified subsequently as intimated
to the USFBL. If the customer is not responding/not reachable over telephone or not paying even
after telephonic request, the USFBL's representatives make personal visits to the customer's residence/workplace
during reasonable hours of the day.
► Ujjivan shall contact people other than the Borrowers only to locate the borrower
► The USFBL staff or any person authorized to represent the USFBL in collection of dues or/and
security repossession identifies himself / herself and displays the Identity card/authority letter
issued by the USFBL upon request.
► Representatives of Ujjivan will not harass or abuse borrowers with threats or offensive
mannerisms /language at given time
► The USFBL is committed to ensure that all written and verbal communication with its borrowers are in simple business
language and the USFBL adopts civil manners for interaction with borrowers
► Ujjivan shall follow only ethical practices and will not resort to unduly coercive tactics in the
process for recovering NPAs.
► Normally the USFBL’s representatives will contact the borrower between 0700 hours and
1900 hours, unless the special circumstance of his/her business or occupation requires the USFBL to contact at a different time.
► Tele callers of call-‐ centres will ensure simple business language, decorum and persuasion
while making follow-‐‐up calls
► Borrower’s requests to avoid calls at a particular time or at a particular place are honoured as
far as possible.
► The USFBL documents the efforts made for the recovery of dues, as far as possible and the
copies of communication sent to customers, if any, are kept on record
► All assistance is given to resolve disputes or differences regarding dues in a mutually
acceptable and in an orderly manner
► Inappropriate occasions such as bereavement in the family or such other calamitous occasions
are avoided for making calls/visits to collect dues
► Up-‐‐to-‐‐date details of the recovery agency if engaged by the USFBL are displayed at its website

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► The USFBL provides the loan account statement to its customers on request basis when changes in period of loan,
quantum of EMI etc. take place. Changes in the rate of interest are communicated to the
customers as and when they are effected
► The USFBL bears the cost of getting duplicate sale deed in case the original furnished to it is
misplaced at its end on account of any eventuality
► Collections team can disclose the loan obligations only to the customer, co-‐‐borrower or the
co-‐ guarantor.
► If the customer is not present and only minors/elderly / infirm are present at the time of the
visit, the Collections Representative should end the visit with a request that the customer call
back. He should not enter the house unless invited. He should not wait for the customer in the
customer’s residence unless specifically asked to do so by the customer or family.
► Ujjivan representatives shall not make false, deceptive, or misleading claims for the purpose
of collecting repayments. This includes misrepresenting his/ her identity or falsifying facts about debt status or consequences of non-
‐ repayment or claiming any monetary or non-‐ monetary awards post tracing of the customer.
► Ujjivan shall not initiate any legal or recovery measures including repossession of the security
without giving due notice to the borrower in writing. Ujjivan shall follow all such procedures
as required under law for recovery/repossession of the security.
► Repossession of security is aimed at recovery of dues and not to deprive the borrower of the
security. Repossession, valuation and realization of security shall be done in a fair and transparent manner within the
purview of RBI’s Guidelines.
► All communication/letters to the customer either through mail or through telegrams shall be
handled directly by the USFBL as appropriate. Mail dunning / telegrams/ Posts/
phonograms/SMS etc. shall be in a format approved by Collections Unit of the USFBL.
► 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.
► Customer or third party requests for supervisor names or requests to speak with supervisor
should always be honored.
► Customers may use USFBL’s grievance redressal mechanism/ escalation matrix in case of any
concerns or grievances pertaining to collection of dues & recovery
1.3. Collection Dos and Don’ts

DO’S DON’TS

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! Do dress in formal clothes and carry the " Do not get personal, tough or aggressive or
company identity card during work hours abusive
positively " Do not use coercion of any sort to make
! Do be punctual and available at Centre Meetings recovery of payments.
and in the Branch Office " Do not humiliate borrowers in public places by
! Visit and analyze the customer situation discussing their loan over dues with third
! Do talk in a pleasant, polite and non-‐ parties/neighbors
aggressive manner at all times. Answers " Do not threaten that assets will be seized
should be factual and to the point " Do not pressurize the members & make
! Collection interactions should be based on unrealistic demands
fair conduct and persuasion " Do not claim that the personal documents
! Present all the information required by the collected earlier will form part of collateral
customer in an appropriate manner " Do not force the customers to make payments
! Do answer borrower’s query to the by not giving them an alternative option
satisfaction of the borrower " Do not humiliate the customer, lose temper, get
! Keep records of interactions with the angry or irritated irrespective of the situation
customer in the IC4 " Tone should not be harsh or loud
! Do provide a valid receipt for each loan " Do not have unending center meetings till
installment payment received (partial or payments are made
full) and record the payment in the " Do not give false promises to customers like
borrower’s loan passbook/loan card promising higher loans in case of part payments,
immediately after the transaction and providing jobs to family members etc.
educate customers to keep all the receipts " Do not seize customer assets or any personal
for all future references. documents e.g. Voter ID, ration card etc.
! Visit the Customer on Promise to Pay dates " Do not share customer’s information with other
given by them on working days only member borrowers/customers
! Maintain a reasonable distance from the " Do not call borrowers at inappropriate times
customer such as bereavements, illness, social occasions
! Contact customer at appropriate hrs. such as marriages, births etc.
Timings: Earliest-‐‐ 7.00 AM & 7.00 PM " Do not visit or call borrowers between 7 pm to 7
! Do keep borrower information confidential am positively
and use it only for permissible purposes " Do not discriminate on the basis of caste and
defined by ujjivan religion
" Do not go for collections in a group of more than
2 staff members at a time
" Do not visit the customers on weekly or public
holidays

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1.4. Policy Review & Approval process

The ownership of this policy shall lie with National Manager Collections and Recovery, Head of
Credit – Micro Finance and Head of Credit -‐ Housing & MSE. The Policy would be reviewed and
updated at least on an annual basis. However, it may also be reviewed on an ad-‐‐hoc basis to reflect changes in
regulatory guidelines or market specific changes. The reviewed and updated Policy would be
submitted to the Credit Risk Management Committee (“CRMC”) for review and sign off.
Subsequently the same will be placed to the Risk Management Committee of the Board
(“RMCB”)1 for review and approval. The minutes of meeting of the Committee and the Board would be documented.
The Credit Risk Management Committee shall be constituted of the following members:
• Chief Executive Officer (CEO) and Managing Director
• Chief Risk Officer (CRO)
• Head of Credit and Collections – Microfinance
• Head of Legal
• Head of Audit
• Chief Vigilance Officer
• Head of Credit -‐ Housing & MSE
1.5. Collection Organization Hierarchy: Micro Finance GL & IL & Housing &MSE
1
Refer to the SFB’s Risk Management Governance Policy for further details on the RMCB

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• Collection structure is common for all business verticals, Collections officers will be
allocated separately for secured and unsecured verticals.
Head Credit and

Collecdons
Nadonal Manager
Collecdon & Recovery
Telecalling Team lead Regional collecdon Collecdon Operatons

Manager manager
Telecallers Area Manager -‐‐

Collecdons
Cluster Manager-‐
Collecdons
Oﬃcer-‐‐ Collecdon
1.6. Product Segment

Micro finance Group and Individual lending Housing and MSE
Joint Liability Group (JLG) loans Housing Loans
Individual Business Loans Loan Against Property (LAP)
Individual Livestock Loans Secured Business Loans

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Agriculture Loans Enterprise business Loans
Individual Home Improvement Loans (HIL)
Individual Higher Education Loans
2. MICRO FINANCE--‐ GROUP LENDING
CROs are primarily responsible for both sales & collections of JLG loans. They are the 1st point of
contact to all group lending borrowers. The supervisory structure from CRM to AM shall get involved in the collection process at
various default category stages. Accountability, customer follow ups &co allocation of accounts have been
explained in detail in this section.
2.1. Identifying Overdue

The action plan for recovering defaults will vary depending on the reasons of default. Hence it is
necessary to first identify the de fault reasons& subsequently develop an action plan for arrear
collections.
2.2. Broad Default Classification:

1 . Individual defaults
2 . Technical defaults
3. Defaults caused by Fraud and Mass Defaults
Type of Default Action Plan Person Responsible

Individual Defaults
Temporary repayment Cause shall be investigated and CRO and CRM
problem constant follow-‐ up with group and
1. Late receipt of salary Borrower shall be conducted to
2. Illness of a family collect the dues.
member
3. Sudden cash needs
Long – term repayment CRO shall investigate the cause and CRO and CRM
problem escalate to CRM.
1. Death of an earning CRM shall analyse the situation
member and keep in constant touch with

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2. Loss of job or the customer until his/her
Accident leading to situation improves.
permanent disability And depending on the actual
of an earning situations also provide an option to
member reschedule the loan and short term
3. Serious illness of a repayment holiday for the set of
family member customers affected by natural
4. Natural calamity calamities
leading to loss of
assets
5. Multiple borrowings
6. Major business
downturn including
crop loss
Wilful defaulter CRO and CRM shall follow up with CRO and CRM
the borrower and group member
for collection in accordance with
JLG norms. 2
Abscond customers Investigation shall be conducted to CRO and CRM,
in accordance with skip tracing Collection team
process as defined in this policy.
Technical Defaults
Wrong Posting of Branch shall intimate the Branch and
repayment operations department to have the Operations
issue rectified.
Repayment window Branch shall notify SQ, collections Branch and SQ
changes team and operations department
to ensure loans are booked in the
actual window. Rectified loan card
shall be handed over to customer
and RO copy shall be sent to the
regional operations department.
Default caused by Fraud and Mass Defaults
Default caused by fraud Cases shall be reported CRM/ CBH/ RFMC
immediately to the RFMC.
Investigation and follow through
shall be done in accordance with
2
As per Group loan Credit Policy

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RFMC Process.
Mass default Upon confirmation from Branch CRM, CBH & AM,
supervisor an immediate collection team,
intimation along with initial Vigilance, RFMC
observations shall be sent to NCM,
RFMC, Head credit Micro Business,
Head Vigilance
2.3. Managing Client and Spouse demise cases
1. Deceased customer: In the event of customer demise, neither the family nor the group
members should be forced to make repayments. The life insurance company will settle the
claim if the insurance is active.
Action Plan:
• When a customer expires the CRO must immediately inform the CRM and update IC4. CRM will inform
operations, insurance and the credit department.
• CRM will then visit the customer’s house, speak with the nominee clearly explaining the
benefits they will receive from the insurance company and the documents he / she is required to provide.
• Once the death claim documents are received, branches will courier the same to the
insurance department.
• Insurance department will submit the death claim documents to the insurance company.
• Once the claim amount is received from the insurance company, Nominee has to settle
the loan amount with Ujjivan.
2. Spouse deceased: In the event of spouse death, CRO should not force the customer or the
group members to make payments during the period.
Action Plan:
• When a customer’s spouse expires the CRO must immediately inform the CRM and update
in IC4.
• CRM will then visit the customer’s house, speak with the nominee (customer) clearly explaining the benefits they
will receive from the insurance company and the documents he / she is required to
provide.

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• Once the death claim documents are received, branches will courier the same to the
insurance department.
• Insurance department will submit the death claim documents to the insurance company.
• Based on the customer preference, Cashier/CCR will choose one of the below options
while marking the case as demise in BR.Net.
o Continue repayment as per schedule
o Loan closure on insurance claim settlement
• CRM will contact/visit the customer to understand her preference and will obtain a request letter or cheque as the case may
be and authorize the entry posted by the Cashier/CCR.
• In few instances spouse may not insured or insured but not eligible for claim due to nature
of death, in such cases customer will not be forced to pay the immediate outstanding EMI
due for the month. The emi falling due on the subsequent month will be collected as per
existing process in center meetings. If problem seems long term/critical we can lookout
option of loan rescheduling or repayment holiday for such customer depending on the criticality. Overdue emi will
reflect as an overdue till it is not regularized.
If the customer wishes to continue her loan
• CRM should collect a request letter from the customer along with the claim documents
If the customer wishes to settle her loan through insurance settlement
1. Customer will not be forced to pay the immediate outstanding EMI due. The EMI falling
due on the subsequent month will be collected at the center meeting as per the existing
process. The overdue EMI will reflect as an overdue till the tenure of the loan. However if
the customer wishes to clear the previous overdue or close the existing loan, she may do
so at her convenience.
2. On intimation from the insurance company, the cheque issued by the customer will be
sent for clearing by the insurance team.
3. On realization of the cheque the loan account will be closed.
4. If the cheque is dishonored then the insurance team will intimate the concerned branch
supervisors by email
5. On receipt of intimation the branch team will follow up with the customer for collection of
outstanding loan amount.
6. If the branch team is unable to recover they will input appropriate remarks against the
customer in Indus Collection software (IC4), which will require authorization by the CRM.
7. All cases reported as Intentional defaulters will get allocated to Collections team
automatically on Indus Collections software (IC4).

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8. Insurance team will store all the dishonored cheques. Collection/Vigilance can request
retrieval of cheques for any future reference.
Customers will be eligible for a repeat loan in accordance with the existing credit policy guidelines. It is important to
note that the repayment history of the customer’s previous loan (during the demise of the spouse) shall have no bearing on the sanctioning of
her new loan, provided pre-‐ closure or repayment has happened in accordance with the above defined
process.
Nominee recovery allocation to collection team: OD Cases where Insurance is settled to Nominee and
crossed 45 days (from the date of Insurance settlement) with >5k OSP amount will be allocated
to field collection team on a monthly basis
2.4. Collection strategy

Collection strategy for Ujjivan will be based on days past due &reasons for overdue.
The primary responsibility of overdue collection lies with the branch staff. Cases are co-‐‐allocated
to other functions based on reasons/criticality of each case as authorized by the distribution supervisors:
Overdue
Activity Responsibility Monitoring Account allocation in IC4
Bucket
All overdue accounts
Day 1 CRO/LO CRM CRO,CRM
appear in IC4
CRM to monitor the
1 to 7 days collection and visit the CRO/CRM CRM/CBH CRO, CRM, CBH
customer.
Nonstarter cases CRO, CRM, CRM, Cluster
Day 8 allocated to field Field Credit Credit CRO,CRM , FCO
credit team Officer (FCO) Manager
Auto escalation made
8 to 30
to next 2 supervisory CBH/AM AM CRO, CRM, FCO, CBH, AM
days
levels based on reason
> 90 Days
Officer-‐ Area CRO, CRM, field credit
with >75% Allocation to field
Collections manager-‐ team, CBH, AM, Collection
of OSP Collection team
Micro finance Collection team
cases in GL
Legal Legal action initiated Collection RVM CRO, , CRM, , field credit

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cases case to case basis Manager and Legal team, CBH, AM, Collection
manager team and legal team
• Abscond cases and sub-‐ lending/ ghost loans/mass default can be allocated to collections
immediately if authorized by distribution supervisor within 15 days of default in IC4; else
auto allocation on Day 15
• All Willful defaulters in group lending will be auto allocated to field collections after 60
days
• Deceased Spouse Insurance Settled cases, If nominee is a willful defaulter, it can be
allocated to collections
2.5. Dunning strategy

Letters will be issued to customer from the system for debt collection purpose. Multiple
reminder notices can be sent to the customers.
For difficult accounts multiple reminder notices can be sent to the customers as below. The
branch team can raise a request in IC4 and regional office will send across the notices to the
customer.
Reminder Notice GL
First reminder notice 8 to 30 days
Second reminder Notice 31 to 60 Days
Final reminder notice 61 to 90 days
3. MICRO FINANCE --‐ INDIVIDUAL LENDING

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LOs are primarily responsible for both sales & collections of unsecured individual loans. The supervisory structure from CRM to AM shall
get involved in the collection process at various default category stages. Accountability, customer follow ups & co-‐‐allocation of accounts
have been explained in detail in this section.
3.1. Type of defaults:

The action plan for collection will vary depending on the reasons of default. Accordingly, defaults
are broadly classified as below:
► Individual defaults
► Technical defaults
► Defaults caused by Fraud and Mass Defaults

Individual Defaults
Temporary repayment Cause shall be investigated and LO and CRM
problem Constant follow-‐ up with
1. Late receipt of salary borrower/co-‐ borrower shall be
2. Illness of a family conducted to collect the dues.
member
3. Sudden cash needs
Long – term repayment LO shall investigate the cause and LO and CRM
problem escalate to CRM.
1. Death of an earning CRM shall analyse the situation
member and keep in constant touch with
2. Loss of job or the customer until his/her
Accident leading to situation improves.
permanent disability And depending on the actual
of an earning situations also provide an option to
member reschedule the loan.
3. Serious illness of a
family member
4. Natural calamity
leading to loss of
assets
5. Multiple borrowings
6. Major business
downturn including
crop loss, Cattle

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death
Wilful defaulter LO and CRM shall follow up with LO and CRM
the borrower & co-‐ borrower for
collections
Abscond customers Investigation shall be conducted in LO, CRM, CBH Credit
accordance with skip tracing officer &Collection
process as defined in this policy. team
Technical Defaults
Wrong Posting of Branch shall intimate the Branch and
repayment operations department to have the Operations
issue rectified.
Repayment window Branch shall notify SQ, collections Branch and SQ
changes team and operations department
to ensure loans are booked in the
actual window. Rectified loan card
shall be handed over to customer
and RO copy shall be sent to the
regional operations department.
Default caused by Fraud
and Mass Defaults
Default caused by fraud Cases shall be reported CRM/ CBH/ RFMC
immediately to the RFMC.
Investigation and follow through
shall be done in accordance with
RFMC Process.
Mass default Upon confirmation from Branch CRM, CBH & AM,
supervisor an immediate collection team,
intimation along with initial Vigilance, RFMC
observations shall be sent to NCM,
RFMC, Head credit Micro Business,
Head Vigilance &Business head

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3.2. Collection strategy:

The various collection strategies based on aging and severity of the cases shall be as below:
BACK END FIELD (Involvement based on buckets)
BUCKET TELE-‐‐ REMINDER CREDIT COLLECTION COLLECTION LEGAL
SMS LO CBH AM RBM
CALLING NOTICE OFFICER OFFICER MANAGER
1 to 7 Days ! ! !3 ! X X X X X X X
8 to 30 Days ! ! ! ! ! X ! X X X X
31 to 60 Days ! ! ! ! ! ! ! ! ! X X
61 to 90 Days ! ! X ! ! ! X ! ! X X
91 to 180 Days X ! X ! ! ! X ! ! ! !
>180 Days X ! X ! ! ! X ! ! ! !
• Abscond cases and sub-‐‐lending/ ghost loans/mass default can be allocated to collections
immediately if authorized by distribution supervisor within 15 days of default in IC4; else
auto allocation on Day 15
• All cases >30days DPD will be allocated to field collections in IC4
• Deceased Spouse Insurance Settled cases, If nominee is a willful defaulter, it can be
allocated to collections
3.3. Bucket wise collection strategy

Staff
Bucket Activities
Responsible
Bucket 1 • Missed payment/Bounce SMS sent from the core system Tele-‐‐calling
(1 to 30) • 1 to 3 days: Loan officer to visit/ call the customer to collect Manager,
repayment or obtain PTP and update in collection software. Collection
• >3 days: Bounce calling from the Collections tele-‐ calling team to Operations
obtain PTP and loan officer to ensure repayment is picked up. In Manager,
case the customer has not honored the PTP for more than 3 times the account will Branch
be escalated to next 2 supervisory levels in distribution. Manager,
• In case the customer is temporarily not contactable during 3 consecutive field visits the Loan
account shall be allocated to next 2 levels in distribution and subsequently to officer-‐‐ IL Credit for Officer,
mandatory field visit. Credit
• Focus is to normalize the account Officer
• Based on the request from Distribution in IC4
ECS/Cheque/ACH
representation will be done by collection operation manager in
3
Reminder notices based on request

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consultation with National manager-‐‐ collection and recovery.

• For 1-‐‐12 MOB, the credit officer will be assisting the Loan officer
Bucket 2 • in collection
Overdue calling (tele-‐ calling unit), field visit and overdue EMI and Tele-calling
(31 to other applicable charges pick-‐ up will be done by the collection officer. Manager,
60 DPD) • Based on severity of the case Cluster collection manager will Collection
also Operations
visit the customer Manager,
• The prioritization of collection effort will be normalization first Collection
& Officer,
then stabilization. Area
• If the Cluster collection manager is of the opinion that customer Collection
intent is good but ability is impaired and fit case for reschedule, Manager
then he will recommend the case to RCM &NCM
• Credit Bureau scrubs shall be used for all cases >30 days.
• The collections operation manager will issue overdue payment
reminder notice on the company letterhead (30 DPD Notice)
Bucket 3 • Overdue calling (tele-‐‐calling), field visit and overdue EMI and other applicable Tele-calling
(61-‐‐90 charges pick-‐ up will be done by the collection officer Manager,
DPD) • The collection operations manager will issue notice for overdue Collection
payment reminder notice on the company letterhead (60 DPD Notice) Operations
• The prioritization of collection effort will be normalization, Manager,
rollback or stabilization in that order. Collection
• Based on customer risk profile (POS, Vintage), area collection Officer,
manager will continue visit the customer Area
• If the area collection manager is of the opinion that customer intent is good Collection
but ability is impaired and fit case for reschedule, then he will Manager
recommend the case to RCM&NCM
• Credit bureau scrubs shall be continuously used to observe
the
payment behavior of Overdue clients
Bucket 4 •Overdue calling (Tele-‐ calling team), field visit and overdue EMI and other applicable Tele-calling
onwards charges pick-‐ up will be done by the collection officer Manager,
(>90 • The prioritization of collection effort will be normalization, Collection
DPD) rollback or stabilization in that order. Operations
• Based on customer risk profile (POS, Vintage), collection Manager,
manager Collection
will continue visit the customer Officer,
• Collections Operations Manager will issue loan recall notice Area
(LRN)
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to the customer. Collection

• Based on the feedback from the collection manager legal action Manager,
(sec 138/25 of Negotiable instrument/Payment act; sec 9 arbitration, will be Legal Team
initiated by legal manager through empaneled advocate. Any
deferral of legal action will be approved by NCM
• In some exceptional cases, company will offer/accept settlement
to/from the customer as approved by Head of Credit& Collection
Micro Finance.
3.4. SMS Strategy

• Reminder SMS will be sent to all customers before the due date from the LMS
• ACH/ ECH/ cheque bounce cases will be flagged in LMS by central Ops. And subsequently
SMS will be sent from LMS
• Subsequent SMSs to be sent basis increase in DPD bucket using (IC4)
• In case of repayment collection done through manual receipts, a SMS confirming the same
will be sent to the customer once the payment is accounted in a customer’s loan account.
• In future in case of payment received through the handheld, a system generated SMS shall
be sent acknowledging the receipt of the same.
3.5. Calling Strategy

Awareness Calling (Calling Before 1st EMI)
For enhanced customer experience and to ensure minimal operational delinquency towards early
tenor of the loans, awareness calling will be done for all customers (based on contactability) post
loan disbursement to make them aware of their due EMI amount and the installment date. The
benefit of awareness calling is the confirmation of customer contactability at specified contact
numbers and pre-‐ empting any customer issues that could have led to customer dissonance. This
activity will be carried by Service quality tele-‐‐calling team
Pre-‐‐Bounce or Reminder Calling

Pre-‐ Bounce and Reminder Calling will be done under 2 circumstances by Service quality tele-‐
calling team

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o For first 4 months, all customers will be called and reminded about their impending due
date and requesting them to fund their account before the due date. This is to ensure that
customer habit of clearing EMI thru their Ujjivan account is established.
o After 4 months, only customers who have missed their repayment previous month, but
paid within the end-‐ of-‐ month, will be called and asking them to fund their account before
due date (so that these accounts will not become overdue post EOM) irrespective of ECS/Cheque or cash mode
repayments
Bounce Calling
o Bounce calling will be done to customers whose cheque/ECS/ACH has bounced during the
month, insisting them to repay the overdue installment with applicable charges by tele-‐‐
calling collection team (4th day)
3.6. Field Visit Strategy (> 30 DPD)

• Prior to field visit, collection team to refer tele-‐‐calling trial recorded in IC4
• The collector shall visit the customer at his /her residence or work place to establish
contact, negotiate and collect the repayment (or take a PTP)
• The intensity of the field visit will be based on:
o Bucket status
o Principal outstanding
o Payment behavior in the past
• All field visit remarks must be updated in the IC4.

Reminder notices will be sent to the customer from IC4. Reminder letters for debt collection will
serve several purposes
• It is alternate soft collection method reminding them for overdue repayment
• Since it is documented, it shall serve as an evidence when legal action is initiated
Different types of notices will be sent to the customer as per the below aging:
Reminder Notice IL
First reminder notice 30th Day
Second reminder Notice 31 to 60 days

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Final reminder and recall notice 61 to 90 Days
3.8. ECS/ACH Representation

ECS/ACH representation will also be done on recommendation by collection/ distribution team
and approved by NCM based on data analysis of past customer repayment behavior.
3.9. Legal Strategy

Legal case will be initiated only after 90 DPD (exceptionally before 90 DPD with NCM approval)..
Legal action will be in parallel with other collection actions (tele-‐ call, field visit, settlement effort,
etc)
Different types of legal actions will be initiated as follows -‐
• Arbitration Sec 9 (for all cases except mortgage).

• Sec 138/Sec 25
• LokAdalat
• Conciliation
4. COLLECTION PROCESS FOR HOUSING & MSE
4.1. Introduction
A Loan Officer (LO) shall represent Ujjivan in collection and secured assets repossession. The
process would follow the guidelines set out below:
► The customer would be contacted ordinarily at the place of his / her choice and in the absence
of any specified place, at the place of his / her residence and if unavailable at his / her residence, at the place of
business / occupation.
► Identity and authority of persons authorized to represent ujjivan for follow up and recovery of
dues would be made known to the borrowers at the first instance. Ujjivan staff or any person

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authorized to represent the USFBLL in collection of dues or / and secured assets, repossession
will identify himself / herself and display the authority letter issued by the USFBLL upon request.
► The USFBLL would respect privacy of its borrowers.
► The USFBLL is committed to ensure that all written and verbal communication with its borrowers will be in simple
business language and USFBL will adopt civil manners for interaction with borrowers.
► Normally Ujjivan's representatives will contact the borrower between 0700 hrs. to 1900 hrs.
Unless the special circumstance of his / her business or occupation requires Ujjivan to contact
at a different time.
► Borrower's request to avoid calls at a particular time or at a particular place would be honored
as far as possible.
► Ujjivan will document the efforts made for the recovery of dues and the copies of
communication sent to customers, if any, will be kept on record using IC4.
Inappropriate occasions such as bereavement in the family or such other calamitous occasions
and important social functions such as marriages will be avoided for making calls / visits to collect
dues.
4.2. Collection Strategy

CLUSTER CLUSTER REGIONAL
TELE-‐‐ AREA COLLECTI CLUSTER COLLECTIO
SALES RB CREDIT CREDIT
BUCKET/DPD SMS CALLIN LO/RO MANAGE ON COLLECTION N
MANAGE M MANAGE MANAGER
G R OFFICER MANAGER MANAGER
R R
0 to 30 Days ! ! ! ! X X ! X X X X
31 to 60 Days ! ! ! ! ! X ! X ! ! !
61 to 90 Days ! ! ! ! ! ! ! ! ! ! !
91 to 180 Days ! ! ! ! ! ! ! ! ! ! !
>180 Days ! ! ! ! ! ! ! ! ! ! !
Note: Field collections will involve for cases after 30 days of delinquency once it is crossed >12 MOB
The action plan for collection will vary depending on the reasons of default. Accordingly, defaults
are broadly classified as:
# Individual Defaults
# Technical Defaults
# Defaults caused due to Fraud/Skip

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Individual Defaults
Temporary repayment Cases shall be visited, Loan Officer/Relationship
problem situation assessed and Manager & Program
collection to be made within Manager
30 days.
Long – term repayment Process shall vary basis the
problem cause of default.
Technical Defaults
Wrong Posting of Account Branch shall intimate the Branch& Back end team
operations department to
have the issue rectified.
Default caused by Fraud/Skip
Default caused by fraud Cases shall be investigated CBH/Cluster Credit
and reported. Collection Manager
&Vigilance and RBM/RCM
shall initiate action against
staff/ customer
Default caused by Skip Case need to be allocated to CBH & AM, Collection
Field collections & need to Officers, Collection Manager
trace by using all the & Vigilance manager
available
technique/Resources.
Sales/collections & Vigilance
should jointly work on
resolving such cases
4.3. Bucket wise collection strategy

Bucket Activities Staff Responsible
Bucket 1 • Missed payment/Bounce SMS sent from Tele-‐ calling Manager,
(1 to 30 IC4 Collection Operations
Days) • 1 to 3 days: Loan officer/relationship office to visit/ call the customer Manager, CBH, Cluster
to obtain PTP/ re-‐‐ payments and update in IC4. Credit Manager, Loan
• >3 days: bounce calling from the collections tele-‐ Officer, Credit Officer
calling set-‐‐up to obtain PTP and relationship officer to
ensure re-‐‐payment is picked. In case the customer
has not honored the PTP for more than
3 times the account will be escalated to next 2
supervisory levels in business.
• In case the customer is temporarily not

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contactable for 3 consecutive field visits the account shall

be allocated to next 2 levels in distribution and credit
officer for mandatory field visit.
• Focus is to normalize the account, and ensure corrective
action for no future delinquency of the case
• Based on the request from distribution in IC4
ECS/Cheque/ACH representation will be done by
collection operation manager in consultation with
NCM
• For 1-‐‐12 MOB for IL, the credit officer will be
assisting the relationship officer in collection
Bucket 2 • Overdue calling (tele-‐ calling unit), field visit and overdue EMI For <12 Mth MOB Team
(31 to 60 and other applicable charges pick-‐ up will be done responsible will be –
DPD) by the collection officer. RBM, RCM, CCM, CBH,
• Based on severity of the case cluster manager -‐ LO,CO Tele-calling
collections will also visit the customer Manager, Collection
• The prioritization of collection effort will be Operations Manager,
normalization first & then stabilization.
• If the cluster manager -‐‐ collections is of the opinion that Filed collection team will
customer intent is good but ability is impaired involve after >12 MOB -
and fit case for reschedule, then he will Collection Officer, Area
recommend the case to RCM & NCM Collection Manager
• Credit Bureau scrubs shall be used for all cases
>30 days.
• The collections operation manager will issue overdue payment
reminder notice on the company letterhead (30 DPD
Notice)
Bucket 3 • Overdue calling (tele-‐‐calling), field visit and overdue For <12 Mth MOB Team
(61-‐‐90 EMI and other applicable charges pick-‐ up will be responsible will be –
DPD) done by the collection officer RBM, RCM, CCM, CBH,
• The collection operations manager will issue notice for overdue LO,CO Tele-calling
payment on the company letterhead (60 DPD Notice) Manager, Collection
• The prioritization of collection effort will be normalization, Operations Manager,
rollback or stabilization in that order.
• Based on customer risk profile (POS, Vintage), Filed collection team will
area collection manager will continue visit the involve after >12 MOB
Collection Officer, Area
Collection Manager

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cust • If the collection manager is of the opinion that customer intent is

ome good but ability is impaired and fit case for
r reschedule/rehabilitation, then he will
recommend the case to RCM & NCM
• Credit bureau scrubs shall be continuously used
to observe the payment behavior of Overdue clients
• The collections operation manager will send2nd overdue payment
reminder notice on the company letterhead
Bucket 4 • Overdue calling (Tele-‐ calling team), field visit and For <12 Mth MOB Team
onwards overdue EMI and other applicable charges pick-‐ up responsible will be –
(>90 DPD) will be done by the collection officer RBM, RCM, CCM, CBH,
• The prioritization of collection effort will be normalization, LO,CO Tele-calling
rollback or stabilization in that order. Manager, Collection
• Based on customer risk profile (POS, Vintage), collection Operations Manager,
manager will continue visit the customer
• Collections operations manager will send loan Filed collection team will
recall notice (LRN) for cases>90 days. involve after >12 MOB
• Based on the feedback from the collection manager Collection Officer, Area
legal action (sec 138/25 of Negotiable instrument/Payment) Collection Manager
will be executed through our legal team Filed collection team will
• For MSE demand promissory Note can be invoked involve after >12 MOB
through claiming legal suite on recommendation
from collection manager Legal Manager
• Based on the feedback from the collection manager
SARFESI for secured loan will be initiated by legal manager
through empaneled advocate. Any deferral of legal action will
be approved by NCM
• In some exceptional cases, company will offer/accept
settlement to/from the customer as approved by
Head Secured/MSE business on recommendation from
NCMs
4.4. SMS Strategy

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• Reminder SMS will be sent to all customers before the due date by the LMS
• ACH/ ECH/ cheque bounce cases will be flagged in LMS by central Ops. And subsequently
SMS will be sent from LMS
• Subsequent SMSs to be sent basis increase in DPD bucket using (IC4)
• In case of repayment collection done through manual receipts, a SMS confirming the same
will be sent to the customer once the payment is accounted in a customer’s loan account.
• In future in case of repayment received through the handheld, a system generated SMS
shall be sent acknowledging the receipt of the same.
4.5. Calling Strategy

Awareness Calling (Calling Before 1st EMI)
For enhanced customer experience and to ensure minimal operational delinquency towards early
tenor of the loans, awareness calling will be done for all customers (based on contactability) post
loan disbursement to make them aware of their due EMI amount and the installment date. The
benefit of awareness calling is the confirmation of customer contactability at specified contact
numbers and pre-‐ empting any customer issues that could have led to customer dissonance. This
activity will be carried by Service quality tele-‐‐calling team
Pre-‐‐Bounce or Reminder Calling

Pre-‐ Bounce and Reminder Calling will be done under 2 circumstances by Service quality tele-‐
calling team
o For first 4 months, all customers will be called and reminded about their impending due
date and requesting them to fund their account before the due date. This is to ensure that
customer habit of clearing EMI thru their Ujjivan account is established.
o After 4 months, only customers who have missed their repayment previous month, but
paid within the end-‐ of-‐ month, will be called and asking them to fund their account before
due date (so that these accounts will not become overdue post EOM) irrespective of ECS/Cheque or cash mode
repayments
Bounce Calling

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o Bounce calling will be done to customers whose cheque/ECS/ACH has bounced during the
month, insisting them to repay the overdue installment with applicable charges by phone
USFBL collection team (4th day)
4.6. Field Visit Strategy (> 30 DPD)

• Prior to field visit, collection team to refer tele calling trial recorded in IC4
• The collector shall visit the customer at residence or work place to establish contact,
negotiate and collect repayment (or take a PTP)
• The intensity of the field visit will be based
o Bucket status
o POS Status
o Payment behavior in the past
• All field visit remarks must be updated in the IC4.

Reminder notices will be sent to the customer from IC4. Reminder notice for debt collection will
serve several purposes
• It is alternate soft collection method reminding them for overdue repayment
• Since it is documented, it shall serve as an evidence when legal action is initiated
Different types of notices will be sent to the customer as per the below aging:
Reminder Notice SHL & MSE

First reminder notice 30th Day
Second reminder Notice 31 to 60 days
Final reminder and recall notice 61 to 90 Days
Sec 138/25 NIA >90 Days
SARFESI for SHL >90 Days subsequently
* All the letter/notice formats are enclosed as annexure to this policy
4.8. ECS/ACH Representation

ECS/ACH representation will also be done on recommendation by collection/ distribution team
and approved by NCM based on data analysis of past customer repayment behavior.
4.9. LEGAL STRATEGY

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• For certain defaulting accounts, if other collection efforts are not successful or not advisable due to sensitivities of
relationship or adverse publicity, the collections manager may initiate legal action though
Vigilance/Legal department
• For carrying out legal activity, the collections manager will designate an officer to be in
charge of the legal activity.
• For legal action, specific approved lawyers will be identified and empaneled
• Legal action may be initiated under Civil/DRT and/or criminal procedure code as
appropriate to the facts of the case.
• The collection unit may use the option of sending legal conciliation letters/ Loan recall notices to specific customers given the stage of
delinquency and feedback from Tele-‐‐ calling/ field.
The following legal strategy will be used for customers
>=60 DPD -‐‐ Send notice under Section 138 of Negotiable Instruments Act (Check Bounce) & Execution of Demand Promissory
Notes as per NI act.
Once declared NPA initiate proceedings DRT / SARFESI
However, there may be instances where the unit may not file legal cases under Civil / DRT. These
will be
• All cases where account; balance is low.
• Where payment has been received in the last three months.
• Where there is a settlement / negotiation in progress.
Legal activity will be monitored and reported through monthly reports giving:
• Fresh cases filed in the month
• Cases resolved in the month and therefore
• Cases in progress
The report will also indicate the amount recovered in the resolutions obtained in the month.
The report will be reviewed by the Regional Collections Manager. The legal officer should also
review progress of cases by lawyers and by type of cases.
In view of the differing court procedures in various locations, it is recommended that procedure
details be maintained at each location by the legal cell in-‐ charge.
Legal action will be initiated under Sec 138, Civil/Criminal procedure codes based on the following
parameters viz bucket, principal outstanding, check amounts and collection history.
The collections unit may also send Conciliation letters to specific customers who threaten to
declare bankruptcy or who, because of a life event (eg: illness/divorce/ loss of job, etc.), no longer

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have the financial capacity to pay their debts. The collections unit may use Conciliatory
proceedings to provide credit counseling to such customers.
4.10. Recovery & Resolution Mechanism

Continuous and focused follow up on a daily basis is the underlying principle for good recovery
and also for identifying genuine problems of the borrowers so that timely assistance can be extended to correct any
temporary mismatch of the cash flow/ review of repayment schedule etc.
► Endeavour should be to prevent the asset from becoming NPA rather than applying remedial
measures at post NPA stage.
► Timely restructuring / rehabilitation in deserving cases should be ensured.
► In exceptional cases, USFBL may opt for One Time Settlement where chances of entire
recovery are remote / time consuming.
► USFBL may consider Sale of NPA assets to USFBLs/FIs /Asset Reconstruction Companies.
► USFBL will enforce the provisions of identifying and declaring willful defaulters in accordance
with RBI guidelines4. General consistency in approach is expected while dealing with willful
defaulters.
Approach for recovery should be practical and non-‐ prejudiced. Fair treatment and persuasion are
the basic principles of recovery mechanism. Enforcement of security be undertaken only where
restructure / rehabilitation has failed or impossible
The recovery mechanisms for retail products like LAP, Individual/Personal Loans will be as
mentioned in section 4.4 of this policy
The recovery mechanisms for MSEs will include Rectification & Restructuring and in case these
options are seen as not feasible, due recovery options will be resorted to as stated in section 4.4
of this policy
4.11. Engagement of Recovery Agents 5
When Ujjivan prefers to utilize the services of recovery agents for collection of dues and repossession of securities, Recovery agents will be
appointed as per the regulatory guidelines6 issued in this regard in this respect:
4
Master Circular on Wilful Defaulters
https://www.rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=9044
5
"Agent" in this Policy would include agencies engaged by the SFB and the agents / employees of the concerned agencies.

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► The name and address of all Recovery Agents on Ujjivan’s approved panel will be placed on
their website for information.
► Only recovery agents from the approved panels will be engaged by Ujjivan.
► In case USFBL engages service of such recovery/enforcement/seizure agent for any recovery
case, the identity of the agent will be disclosed to the borrower.
► Agents would be provided with an Identity card (from the recovery agent) for proper identification and shall limit his
role of recovery of dues specifically entrusted to them. Any action beyond limits of law shall
be at Recovery Agents’ sole risk and responsibility.
► The Recovery Agents shall strictly adhere to the USFBL’s Model Code of Conduct for Collection
of dues and Repossession of Secured Assets.
► The arrangement of placing Recovery Agents' name on the panel does not amount to any
employment and create no obligation of any kind on the USFBL.
► Representatives proposed to be identified as Agent, should have undergone necessary
training and obtained the prescribed certificate from IIBF as per RBI guidelines.
► Recovery Agency shall keep all the affairs of entrusted borrowers highly confidential.
► The Agency shall not have any right to sub-delegate or appoint any sub-agent.
4.12. Identification of Wilful Defaulters

As per the scheme framed by RBI with effect from 01.04.19997, USFBLs/FIs are required to submit
the list of suit filed accounts of willful defaulters of` Rs.25 lac and above as at end of every quarter
to Credit Bureaus and/or any other credit information company of which it is a member and the
quarterly list of willful defaulters of Rs.25 lac and above where suit has not been filed to RBI.
Classification of willful defaulter by Ujjivan for internal purposes:
Ujjivan shall classify willful defaulters irrespective of the amount outstanding, for internal
purposes.
The term "willful default" in accordance with RBI guidelines8 would be deemed to have occurred if
any of the following events is noted:
6
RBI Circular on Recovery Agents engaged by Banks
https://www.rbi.org.in/commonman/English/Scripts/Notification.aspx?Id=347
7
RBI Master Circular on Wilful Defaulter
8
Refer RBI Master Circular on Wilful Defaulter

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The borrower/unit has defaulted in meeting its payment/repayment obligations to the lender
even when it has the capacity to honor the said obligations.
► The borrower/ unit have defaulted in meeting its payment/repayment obligations to the lender and have not utilized
the finance from the lender for the specific purposes for which finance was availed of but has
diverted the funds for other purposes.
► The unit has defaulted in meeting its payment/repayment obligations to the lender and has
siphoned off the funds so that the funds have not been utilized for the specific purpose for
which finance was availed of, nor are the funds available with the borrower/unit in the form
of other assets.
For the purpose of determining future course of action in an account, the guiding principle will be
the intention of the borrowers concerned. Willful defaults broadly cover the following:
► Deliberate non-‐ payment of the dues despite adequate cash flow and good net worth;
► Siphoning off of funds to the detriment of the defaulting unit;
► Assets financed either not been purchased or been sold and proceeds have been mis-‐ utilized;
► Misrepresentation/falsification of records;
► Disposal/removal of securities without USFBL's knowledge;
► Fraudulent transactions by the borrower.
► Absconding from current residence without giving any prior notice to Ujjivan.
► Involvement in sub lending activity by the borrower.
As and when accounts is classified as NPA or on occurrence of any of the events noted above in an
existing NPA account, collection team shall examine whether same is a case of willful default.
Internal Committee for approving list of willful defaulters:
A Sub Committee for ‘ The Risk management committee of the board’, constituting Chief Risk Officer, Head of Credit and
Collections – Microfinance, Head of Credit -‐‐ Housing & MSE and MD & CEO shall be the final
authority to approve the list of willful defaulters for POS Rs 0.5 lacs to Rs 25 Lacs.
System tracking:
The complete list of willful defaulters shall be shared with corporate credit team once in a month
for updation in internal systems as negative customer.
Classification of accounts as willful defaulter with outstanding balance >Rs 25 Lacs9
9
These guidelines shall be adopted when Ujjivan start lending loans >Rs 25 Lacs

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As and when any borrower account with an outstanding balance of INR 25 lac and more is classified as NPA or on occurrence
of any of the events noted above in an existing NPA account, branch/RO shall examine whether
same is a case of willful default in terms of RBI guidelines and in case of willful default, take
prompt steps to get the borrower classified as a willful defaulter, as per the procedure laid down
hereunder.
1. The proposal for classification of willful defaulters shall be forwarded by branch/regional
officer (RO) to Legal Department at Head Office substantiating the reasons and also supported by documentary
proof.
2. Branch/Controlling Office should examine and obtain legal opinion as to whether there is
prima facie case warranting criminal prosecution under penal law and forward their
recommendation to Legal Department at Head Office
3. The matter shall be examined from the legal angle and placed to the Willful Defaulters
Identification Committee 10 . The committee will be the Sub Committee of ‘Risk management
committee of the board’, constituting Chief Risk Officer, Head of Credit -‐ Housing & MSE and MD& CEO.
4. If in the opinion of the committee, the case is fit for prosecution, sanction shall be
accorded for initiating criminal proceedings
5. It should be ensured that penal provisions are used effectively and determinedly but after
careful consideration and due caution.
6. The decision taken on classification of willful defaulters should be well documented and
supported by requisite evidence. The decision should clearly spell out the reasons for which the borrower has been
declared as willful defaulter vis-‐ à-‐ vis RBI guidelines11.
7. A Show Cause Notice will be issued to the borrower with a call for submissions. Subsequently, an order will be
issued recording the fact of willful default as well as reasons for the same.
8. Reporting of willful defaulters to authorities like RBI/ Credit Bureaus etc., shall be done as
per the RBI/Credit Bureaus etc., guidelines in this regard.
The system of dissemination of credit information pertaining to willful defaulters was put in place
for cautioning USFBL and FIs, so as to ensure that further finance is not made available to them.
Hence, the above scheme is a very important tool which can be effectively used against the
willful defaulters of Ujjivan, to persuade them to settle their dues.
10
As per RBI Master Circular on Wilful Defaulters RBI/2015-16/100 DBR.No.CID.BC.22/20.16.003/2015-16 dated July 1, 2015, the
“Committee will be headed by an Executive Director or equivalent and consisting of two other senior officers of the rank of GM / DGM”.
11
RBI Master Circular on Wilful Defaulters RBI/2015-16/100 DBR.No.CID.BC.22/20.16.003/2015-16 dated July 1, 2015

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4.13. Tools for Recovery

The repayment record of borrowers shall be monitored both with regard to payment of interest and
repayment of principal. Whenever a borrower defaults or is likely to default, rigorous follow--‐up shall
be made for the collection of dues / arrears. When default occurs, oral and written communications are to
be sent to the borrower to regularize their accounts within a specified period. In case the loan is secured by
a guarantee (personal or corporate), steps shall be taken to recover dues from the guarantor.
Ujjivan shall use any of the following broad methods for management of problem accounts:
1. Restructuring, rephasement and rehabilitation

2. Exit strategy
3. Settlement/ Compromise
4. Sell down to Asset Reconstruction Company (ARC) / other entities
5. Write-‐‐off
6. Legal Action & recovery – Procedure
7. Invoking of the provisions of SARFAESI ACT 2002
Tool MSE Loans Housing Loans

Restructuring, rephasement
! !
and rehabilitation
Exit Strategy ! !
Settlement/ Compromise ! !
Sell down to Asset
Reconstruction Company/ ! !
other entities
Write-‐‐off ! !
Legal Action and recovery ! !
Invoking the provisions of
! !
SARFAESI ACT 2002
4.13.1. Restructuring, Rephasement& Rehabilitation

This represents those accounts where the borrower is willing to repay his dues to Ujjivan but does
not have the capacity/funds to do so right away. In such cases, the branch should examine the
causes of sickness and recommend the course of action. The first focus of NPA management in
such cases will be possible up gradation of the loan, by rehabilitation of the borrower’s business.

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The rehabilitation option will be examined in cases where there is prima facie scope for restoring
viability of the business. The action plan will be put in place in such cases where it is possible to
bring the unit back into good health by extending minimum additional funds and marginal concessions by which the unit
will be able to meet its obligations fully within a maximum period of 5-‐ 7 years.
The rehabilitation approach will generally be adopted provided Ujjivan is satisfied that:
► Eligibility criteria and regulatory guidelines with respect to restructuring are fulfilled
► The loan has become an NPA due to factors other than lack of integrity on the part of the
promoters.
► Genuineness of the obligor and viability of the proposal is established
► There is prima facie case for considering such a proposal.
The following steps can be taken to rehabilitate the unit so that it may gain enough strength to
service the borrowings over a period of time:
► Revision of interest and/or re-‐ schedulement of installments.

► Making available need based minimum additional funds. Ujjivan will explore taking additional
securities for such exposure.
► In cases where the credit requirements of a borrower are being met by a number of institutions under
consortium/multiple banking arrangements, Ujjivan shall be in continuous touch with other lenders
to the borrower and shall keep a close watch over their
contemplated actions.
The Composition of the Committee shall be as under:

a) The Regional Business Manager/Regional Credit Manager of the convener USFBL,
shall be the Chairperson of the Committee;
b) Cluster Credit Manager of the Micro, Small and Medium Enterprises Credit Department of the convener
USFBL at the regional or zonal office level, shall be the member and convener of the
Committee;
c) One independent external expert with expertise in Micro, Small and Medium Enterprises related
matters to be nominated by USFBL.
d) One representative from the concerned State Government. Endeavour should be
made to bring representative from the respective State Government in the

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Committee. In case State Government does not nominate any member, then the
convening USFBL should proceed to include an independent expert in the Committee, namely a
retired executive of another USFBL of the rank of AGM and above.
e) When handling accounts under consortium or MBA, senior representatives of all
USFBLs / lenders having exposure to the borrower.
4.13.2. Loan Rescheduling

Rescheduling may be of the following types12:
a) Credit Loan Rescheduling
The Credit Function shall be entitled to authorize a change in repayment terms and structures of a customer’s
loan post thorough assessment of the customer’s inability to repay as per the original
terms.
► New rescheduled loan shall be opened by aggregating the sum of principal and all
outstanding loans
► The current rate of interest shall be taken into account
► Tenor shall be determined basis the finalized installment amount
b) Procedural Rescheduling by Operations
Procedural/ Technical rescheduling by Operations shall include repayment window
changes, product type changes and incorrect loan bookings.
c) Repayment Holiday
4.13.2.1.Repayment holiday is a special provision which shall be given to customers who are exposed to economic losses caused by
natural or man-‐‐made disasters; eg: demolition drives from the Govt, flood or fire destructions or
sudden strikes or bandhs. As an instant relief measure, customers shall be allowed to
skip a maximum of 90 days depending on the extent of distress caused to the customer and the
surroundings.Corrective Action Plan for MSEs13
Rectification-‐‐ This approach will be adopted by Ujjivan after:
► Obtaining a commitment, specifying actions and timelines, from the borrower to regularize
the account so that the account comes out of the SMA status or does not slip into the NPA
category.
12
Further details contained in the Credit Policy Manual of loan products
13
Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs)
https://rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=10304
Details of MSME account monitoring and subsequent CAP are covered in the Credit Policy

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► The commitment should be supported with identifiable cash flows within the required period
and without involving any loss or sacrifice on the part of the existing lenders
► The process should ideally be borrower driven but in certain exceptional cases the Committee14 may consider
providing need based additional finance intended only for meeting unavoidable increased
working capital requirement.
► Such additional finance should be regularized within a maximum period of 6 months
► Repeated rectification with funding within a year, will be treated as restructuring
► No additional finance to be sanctioned where the account has been reported as fraud by any
lender
Restructuring-‐ This approach will be adopted by Ujjivan:

► Only if the assets reported belong to the Standard, Special Mention Account or Sub Standard
category and the borrower is not a willful defaulter15.However the Committee may review the
reasons for classification of the borrower as a willful defaulter and satisfy itself that the borrower is in a position to
rectify the willful default. The decision to restructure such cases shall have the approval of
the Board, along with the recommendation of the Committee which has classified the
borrower as willful defaulter
► If there is commitment from the promoters for extending their personal guarantee along with
their net worth statement supported by copies of legal titles to assets
► It should be noted that any deviation from the commitment by the borrowers affecting the
security of recoverability of the loan may be treated as a valid factor for initiating recovery
process
► Cases of Frauds and Malfeasance will be ineligible for restructuring. However, in cases of fraud
/ malfeasance where the existing promoters are replaced by new promoters and the borrower
is totally delinked from such erstwhile promoters / management, USFBLs and the Committee16
may take a view on restructuring of such accounts based on their viability, without prejudice
to the continuance of criminal action against the erstwhile promoters / management. Further,
such accounts may also be eligible for asset classification benefits available on refinancing after change in ownership, if such change in
ownership is carried out under guidelines
14
Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs)
15
Master Circular on Wilful Defaulters
16
Details of the committee as required by the RBI Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises
(MSMEs) are covered in the Credit Policy

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contained in circular on “Prudential Norms on Change in Ownership of Borrowing Entities (Outside Strategic Debt
Restructuring Scheme)”17.
► The restructuring package shall stipulate the timeline during which certain viability milestones
such as improvement in certain financial ratios may be achieved.
Recovery:– Once the first two options at (a) and (b) above are seen as not feasible, due recovery
process may be resorted to. The Committee may decide the best recovery process to be followed,
among the various legal and other recovery options available, with a view to optimizing the efforts and results.
4.13.3. Exit Strategy

Ujjivan may consider exit/exposure reduction on accounts gone into recovery or on accounts where the return on capital is not
commensurate with their overall strategy. Since an exit strategy results in cessation of the
relationship with a customer, approval for the same shall be obtained from an authority one level
above branch.
The methods which can be employed by Ujjivan include:
► Freeze the exposure at the existing level after serving due notice
► Impose cut-‐‐backs on regular credit
► Modify margin requirements to reduce drawing power
► Enhance the security cover by insisting on additional collateral, personal guarantees of
promoters etc.
► Opt for settlement of the exposure, if necessary at a discount
► Sell down to Asset Reconstruction Company (ARC) / other entities
4.13.4. Settlement/Compromise – For secured & Unsecured IL

Compromise settlement refers to a negotiated settlement where a borrower offers to pay and
Ujjivan agrees to accept in full and final settlement of its dues an amount less than the total
17
Prudential Norms on Change in Ownership of Borrowing Entities (Outside Strategic Debt Restructuring Scheme)
https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10039&Mode=0

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amount due to Ujjivan under the relative loan contract. This settlement invariably involves a
certain sacrifice by way of write off and/or waiver of a portion of its dues on a one-‐ time basis.
All settlement / compromise decisions would be approved by the following designated approval
authorities.
Micro Finance Housing & MSE
Head of Credit and Collections --‐ Microfinance Head of Credit --‐ Housing & MSE
Head of Microfinance & Branch Banking Head of Housing & MSE
The Policy recognizes that it is not possible to lay down precise guidelines which can be followed
uniformly in case of all compromise offers as each offer is unique in the context of circumstances
necessitating its consideration as a recovery option.
The Policy however, lays down the following principles which are to be kept in view while
considering compromise offers
► Ujjivan may take up a compromise settlement /one time Settlement (OTS) proposal for
consideration, irrespective of the present stage and status of the recovery proceedings.
► Any compromise will be a negotiated settlement under which Ujjivan will endeavor to recover
its dues to the maximum extent possible, with minimum sacrifice. However it is recognized
that amicable settlements are possible only in a win-‐ win situation and sacrifice is a part of
settlement.
► The latest status of the activity of the borrowing entity which seeks a compromise will be
taken into reckoning during the course of negotiation.
► As far as possible, an initial down-‐‐payment should be taken from the borrower as evidence of
his intention to pursue the compromise settlement with Ujjivan.
► In case the borrower has other group companies dealing with the USFBL, influence of these
companies or the parent company may be used for a better settlement and/or for getting additional security,
pending realization of the entire amount of compromise.
► It will be the endeavor of Ujjivan to get the entire compromise amount <<placeholder for time
period>>from the date of settlement. In the event of a One Time Settlement, in cases where
the borrower is unable to pay the entire lump sum, USFBL shall recover at least 25% of the
settlement amount upfront. The balance shall be recovered in installments within a period of

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one year together with interest at the existing Prime Lending Rate from the date of settlement
up to the date of final payment.18
► At the time of One Time Settlement negotiation when OTS amount is proposed to be paid in
installments seriousness and preparedness of the borrower to honor OTS commitments shall
be looked into.
► In the case of suit filed account if need be and if practical, the terms and conditions of
settlement should be finalized and consent decree from the court should be obtained.
► It is recognized that the OTS amount normally will not be less than the realizable value of securities. While considering
the realizable value due consideration will be given to various factors like forced sale value, early realization
of money, sale ability of the property, type, effort and cost involved & yield in the account.
► Normally no Compromise Settlement will be made with willful defaulters. However, it is recognized that, sometimes
business prudence requires compromise settlement in the case of willful defaulters also, which
will be considered on a case to case basis.
► In case of non-‐ receipt of the committed compromise amount as per the terms of the settlement, the recovery proceedings
already initiated before the settlement shall be continued forthwith.
► The Authority who had approved the compromise settlement earlier may consider the modification in the terms of the settlement.
However, in case of settlement/compromise approved by the Board, Business Head – Secured and
Head – Unsecured Credit will be the permitting authority for such modifications.
► In the case of sacrifice of undebated Interest the same may be calculated at USFBL prevailing
Base Rate (Simple) or the contracted rate/interest claim in the plaint/decreed rate (simple)
whichever is less.
► In case of compromise settlements if the settlement amount is more than Rs.1 lakh and more
than 2 months’ time is given for payment of the same or the balance thereof, the Net Present
Value of OTS amount will be calculated taking the prevailing 90days Treasury bill rate as the
discounting factor for tangible assets.
► In compromise settlements/write off cases, the amount of sacrifice will be determined with
reference to balance/dues as on the ‘settlement date’ which shall be indicated in the compromise settlement/write
off proposals.
18
Refer RBI Guidelines on One-Time Settlement Scheme for SME Accounts, RBI/2005-06/153 RPCD.PLNFS. BC.No.39 / 06.02.31/
2005-06 dated September 3, 2005

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► In case of compromise settlements normally the amount of settlement shall be at least equal
to the net balance or 75% of the Forced sale values of the immovable property securities whichever less. Any deviation
in this regard shall be with the permission of the next Higher Authority up to the level of
CEO.
► Wherever OTS amount is funded by other Banks/Financial Institutions/NBFCs/ARC or any
other entities/individuals, Ujjivan may assign the debt/ securities in their favor. In such cases,
the guidelines framed for sale of financial assets will not apply.
4.13.5. Sell down to Asset Restructuring Company/other entities

In some NPA accounts, recovery proceedings reach a stalemate for various reasons due to which
resolution of such NPA gets delayed.
It is also an established practice in Banking Industry to Sell NPAs on portfolio-‐ basis/segment-‐‐wise

viz., Retail Credit advances such as: Housing Loans, Vehicle loans etc. Individual accounts under
these segments though small in value but very voluminous in nature warranting valuable time of
Ujjivan for follow-‐‐up and recovery.
It is also observed recently that there are situations where majority of the lenders have classified
the accounts as NPA with a few lenders classifying the said account as Standard Assets. There are
also situation where majority of the lenders have classified financial assets as SMA-‐ 2 which is reported to Central Repository for Information on Large
Credit as per RBI guidelines19 and is expected to become NPA within a short period. In order to reap
higher return from ARCs, RBI is encouraging banks to consider sale of such assets at the initial
stage and has offered incentive by spreading the losses over a period of two years.
The basic strategy underlying the approach to management of problem accounts is to focus on
initiation of appropriate preventive corrective action at the right time. All stressed accounts shall
be closely and continuously monitored.
4.13.6. Write off/Waiving of Legal action

If the borrower has no means to pay and USFBL is convinced that the dues are irrecoverable, USFBL shall waive legal action
and write off the amount.
19
RBIFramework for Revitalising Distressed Assets in the Economy – Guidelines on Joint Lenders’ Forum (JLF) and Corrective Action
Plan (CAP)
https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8754&Mode=0

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Waiver of legal action/write off can be permitted only when the authorized functionary is
satisfied that the borrower has no tangible security or any attachable assets, has no adequate
income for repayment and no useful purpose will be served by resorting to legal recourse. However initiation of Revenue
Recovery measures (wherever applicable) shall be a precondition to waiver of legal action.
For proposals backed by Govt. sponsored schemes, waiver of legal action shall be obtained from
one level higher than the sanctioning authority
Write-‐ offs for Housing and MSE loans shall be approved by the Head of Credit -‐ Housing & MSE.
All cases identified as fraud by Regional Fraud Management Committee with POS >Rs 100000 shall require approval from CEO &
MD.
4.13.7. Invoking the Provisions of SARFAESI Act

The provisions of “Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI
Act)20 are applicable for only secured loans once accounts are classified as NPA, and if invoked promptly and followed
up diligently, act as a powerful deterrent to errant borrowers.
The moment a SARFAESI proposal is approved by NCM as recommended by Collection Manager:

Authorized Officer (AO) from Legal department shall be identified who should assume ownership
of the account. It is the responsibility of the AO to ensure that the time frame for taking the SARFAESI proceedings forward
are strictly adhered to.
Steps that shall be followed while invoking the SARFAESI are:
Repossessions for Mortgages
Repossession of Mortgages shall come into effect post the customer loan becoming a Non Performing Asset (NPA) on
the USFBL’s books i.e. the customer’s loan is 90 days overdue and all efforts to regularize it have
failed.
Notice
A Notice u/s 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (SARFAESI Act) will be issued to the borrower, co-‐ borrower and guarantor, with all the
relevant details.
20
http://www.drat.tn.nic.in/Docu/Securitisation-Act.pdf

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Notice send to dead person is bad in law. The AO to ascertain all the details of Co-‐ applicant &legal
heirs and send the notice to them
The Notice will be sent to the mortgaged property address and other addresses provided on the
application form.
Possession
Notice under Sec 13.2 (SARFAESI)
The customer will be allowed 60 days post issuance of the notice to regularize the account or
come forward to settle the account.
Notice under Sec 13.4 (SARFAESI)

After expiry of 60 day notice sent under 13.2 (SARFAESI), we may send notice to customer under
13.4 (SARFAESI) demanding peaceful possession of the securities through our authorized officer.
This gives ample opportunity to the customer to come forward and pay / settle with the USFBL.
The Authorized officer of the USFBL may visit the customer demanding peaceful possession of the
property under notice sent 13.4.
In case there is no outcome then we need to approach Chief Metropolitan Magistrate / District
Magistrate applying for physical possession of the property.
The physical possession of the property shall be taken in a peaceful manner as per law.
VOLUNTARY SURRENDER OF IMMOVABLE PROPERTY
The customer will be requested to sign a surrender letter.

The Panchnama will be signed by the authorized officer, two independent witnesses and the
customer.
An inventory list will be made for all the articles found in the mortgaged property. The customer
will also have to give a written declaration that all his valuables like jewellery; cash etc. has been
retrieved by him. This also needs to be signed by the authorized officer and two independent witnesses.
POSSESSION OF IMMOVABLE PROPERTY

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Panchanama will be signed by the Authorized Officer of the USFBL and two independent
witnesses.
In case the borrower refuses to hand over the property then a complaint will be made before the
Chief Metropolitan Magistrate/ District Magistrate.
The Chief Metropolitan Magistrate/ District Magistrate will appoint an officer for taking the physical possession of the property. Before the
physical possession of the property the court order needs to be communicated to the local police asking for
assistance.
An inventory list will be made for all the articles found in the mortgaged property. The customer
will have to give a written declaration that all his valuables like jewelry; cash etc. have been taken
by him.
AO to ensure that safe custody of movables by him directly or through agents as per rule
SALE OF SECURED ASSETS
The USFBL shall proceed with the Auction of the attached property post 30 days of taking possession of the property, in the
event, that the customer does not come forward and settle the loan.
The USFBL shall send the customer a letter intimating him, of the venue of the sale indicating date
and time of the Auction / Sale.
The USFBL will consider handing over possession of property to the borrower any time after repossession and before concluding
sale transaction of the property, provided the USFBL dues are cleared in full.
In case of a settlement by the customer, the property documents will be released to the customer
within 30 days of the receipt of payment of the total settlement amount.
Note: Further as per the direction from Ministry of finance all such auctioning assets should be published in the official
website of the government “tender.gov.in” to get wider publicity and with a view of getting better response
APPEAL AGAINST THE USFBL’S ATTACHMENT: The SARFAESI act gives the customer the right to
appeal against a possession order only in DRT.
RECOVERY OF THE BALANCE AMOUNT: The USFBL shall move an application before the Debt Recovery Tribunal for recovery
of any balance due on the loan account after adjusting dues from the sale proceeds.

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REFUND OF BALANCE AMOUNT: Any excess amount obtained after adjusting the dues on the
Loan shall be refunded to the borrower within 30 days.
PAPER PUBLICATION OF DEFAULTERS
USFBL at its discretion may adopt the process of Publishing Details of Defaulters in the Newspapers specifically for
Willful Defaulters.
Willful defaulters, according to the Reserve Bank of India, are those who do not repay deliberately
despite having sufficient funds and a solid net worth.
If the borrower does not comply within 15 days USFBL may even publish the photographs of the
guarantors.
This is a tool for USFBL to recover dues. But this must be used carefully.
Collection Management – Applicabale for all Products

5. LEGAL ACTION & RECOVERY (Procedure)
Recovery proceedings would be initiated against the borrower / guarantor wherever exit, restructuring and rehabilitation or settlement
/ compromise have been exhausted or are not possible. Wherever possible action for enforcement of security under the Securitization and
Reconstruction of Financial Assets and Enforcement of Security Interest (“SARFAESI”) Act, 200221
should be taken.
All legal actions / recovery actions shall be approved by the designated approval authorities as per
the Delegation of Authority of the USFBL. In cases of willful default, (e.g. diversion and siphoning
of funds), fraud and malfeasance on the part of the borrower, legal action may be the first and
only option for recovery, as any other option of recovery would not be appropriate.
The following steps can be initiated in respect of such borrowers.
5.1. Guidelines on seizure / repossession of assets hypothecated to Ujjivan

All assets hypothecated to Ujjivan may be seized / repossessed subject to the following:
21
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
http://www.drat.tn.nic.in/Docu/Securitisation-Act.pdf

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• Assets hypothecated to Ujjivan under all NPA borrower accounts may be seized / repossessed
provided such seizure / repossession is legally permitted within the state.
• A Notice indicating the proposed action should be served to the borrower giving him minimum 15 days and
maximum of 60 days of time to regularize / close the account and only on failure of the
borrower to comply, the action should follow.
• Hypothecated assets should be seized after the expiry of the notice period if the account is
not closed.
• Within 15 days of taking possession of the assets if the borrower does not come for regularization/closure/settling
the dues, valuation of the assets seized shall be obtained through Ujjivan’s approved valuers.
• Arrangement to dispose-‐‐off the assets seized shall be made within 30 days of taking possession of such assets
upon failure of the borrower to clear the dues and getting the assets released.
• Assistance of professional seizing agents may be availed for the purpose of seizure and safe
keeping of the assets seized. All such agents will have to be duly approved by the Collection
Department before their services are utilized. Any complaint against the seizing agents will be
looked into by the collection Department immediately and corrective action including deletion
of such seizing agents from the approved list in extreme cases shall be taken.
In addition to the above following actions will also be initiated
• Reporting the borrower/directors as wilful defaulter to RBI after following prescribed

procedure.
• Exercise right of general lien and set off, in respect of all accounts of borrower at any of the
branches, before initiating legal proceedings but after giving due notice to the concerned.
• The guarantors/Co-‐‐borrowers may be pressurized to expedite repayment of the dues. Separate meetings with guarantors/Co-
‐ borrowers can be arranged for this purpose where repercussions of legal actions upon them and need for
their exerting pressure upon borrowers for repayment/regularization may be explained at
length.
• Initiating criminal action against borrowers wherever it is found that the borrower has been
fraudulent in his dealings with Ujjivan and there is a case of misrepresentation and/or diversion, cheating, criminal
breach of trust, using forged documents, dishonest or fraudulent removal or concealment of
property etc.
• In all cases where legal action in civil courts/DRTs is contemplated the recovery process shall
be initiated immediately in case limitation period is expiring or after reaching a conclusion that rehabilitation and other
avenues of recovery have been exhausted. In case it is observed that the borrower is trying to
dispose-‐‐off the securities or the value of securities is eroding for

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some other reasons, to protect Ujjivan’s interest and prevent dilution of securities, suits should be filed against the
borrower/Co-‐ Borrowers & guarantors forthwith. The USFBL may approach the courts for
granting attachment before judgement22 whereby the USFBL shall be able to realise the
amount of the decree.
• Simultaneous with filing of suits, efforts would be made, through process of law, for forcing
the borrower/guarantor to declare all their assets on oath and towards obtaining the injunction/garnishee against disposal of
assets/receivables and for realization of available securities and impounding the passports of the borrower/Co-
‐ Borrowers/directors/guarantors. Necessary application for this purpose shall be filed with DRT/competent courts.
Attempts shall also be made for obtaining interim decrees on the basis of admission of debt at
any stage by the borrower.
• Wherever feasible, winding up petition shall be filed against the companies as a measure of
recovery of money as well as for exerting pressure upon the defaulting borrowers.
• UUSFBLL may also consider filing of Insolvency Petitions against individual borrower/Co-‐
borrowers &guarantor.
► The status of each suit filed account at branches will be reviewed by the Branch Heads at monthly intervals, in
consultation with the advocates concerned. Quarterly reports on all such accounts will be
submitted to the Head office. For the purpose of close monitoring, branch Heads or their
representative will attend Court/DRT proceedings regularly and also maintain close liaison
with the advocates, so that the cases may be disposed-‐‐off expeditiously and unnecessary
delays avoided.
5.2. Arbitration proceedings

Arbitration is a quick and inexpensive method of redressal of commercial disputes between parties.
Procedure
Steps Description
Initiation of arbitration proceeding • Arbitration proceedings will be initiated only when an

Arbitration agreement is in writing between the parties.
• Once the cases are identified for arbitration proceedings, a
demand notice shall be issued to the customer demanding
repayment of entire loan outstanding (principal + interest +
other charges) within 10 --‐15 days.
• In parallel, USFBL will also choose to issue a notice for
inspection of asset (optional).
22
Refer Order XXXVIII, Arrest And Attachment Before Judgement, The Code Of Civil Procedure, 1908

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Appointment of arbitrator • After expiry of the notice period in the demand notice and
provided customer has not complied with the demand
notice, the USFBL will invoke the arbitration clause and
USFBL will on its own or through its advocate appoints an
arbitrator and send a notice to customer stating that a dispute
has occurred and the USFBL has appointed an arbitrator to
adjudicate upon the disputes and claims between the parties as
per agreement. The place for arbitration is also notified as
mentioned in the agreement
Arbitration proceeding • Upon appointment, the arbitrator will inform all the parties
regarding his appointment and call the parties for a preliminary
hearing and after such hearing, will issue necessary
instructions to the parties and will fix the hearing for
submitting statement of claim and other things.
Filing of statement of claim • The claimant (USFBL) has to file statement of claim before
the arbitrator within the period of time agreed upon by the
parties or as determined by the arbitrator. The claim
shall be supported with agreement copy, copies of notice
issued, statement of account etc. The statement of claim shall
contain statement of facts supporting the claim, the points at
issue and the relief or remedy sought.
Inspection of documents & • The arbitrator at the request of the customer will allow the
customer to inspect the documents submitted by the USFBL.
customer reply • Post filing of the claim, the customer will state his defense
in respect of the statement of claim filed in a written
statement with all supporting documents.
Rejoinder by claimant • Post the customer reply to the statement of claim, the
USFBL will amend or supplement with a rejoinder to
refute the response of the customer.
Framing of issues • The Arbitrator will frame the issues among the parties and
ask the parties to file original documents in support of their
claim and defense.
Evidence, examination, arguments • Proceedings will be mainly through written submissions &
documents, unless otherwise agreed by both parties or one
and award party has explicitly requested for oral hearing.
• Both the parties, with arbitrator’s permission, will examine the
evidence (inspection of documents, goods or other
property). Both parties have chance to cross--‐examine the other
party and then present their arguments.
• The decision of the Arbitrator / Arbitrator Tribunal is termed as
Arbitral Award. After hearing all the parties and going through

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the evidence placed on record, the arbitrator will pass the

award. The arbitrator will send the copies of the award to
all the parties. If the said award, after service,
remains unchallenged for 90 days, the same will have effect
as decree of the court.
• It is permissible for the parties to arrive at a mutual
settlement. If parties settle the dispute by mutual
agreement, the settlement will be recorded in the form of
an Arbitral Award and such Arbitral Award shall have the
same force as any other Arbitral Award
• Based on the final Arbitral Award, the parties will file the
Award before the Court to initiate execution proceedings i.e.
sale of the assets of the Respondent in satisfaction of the
claim.
Appeal of the award: • A three months’ time is provided to the parties to challenge
the award of the Arbitrator. In case parties fail to challenge
the Arbitral Award within the stipulated time, the Arbitral
Award becomes final and binding on the parties
Interim measure by the court • Any time before the arbitration or during the arbitration
proceeding or after the award but before enforcement, the
USFBL will seek interim relief from the court on the following
grounds --‐
• Seeking custody of asset or sale of asset
• For appointment of receiver
• Seeking injunction to restrict customer to transfer the asset
to
third party during arbitration
• To seek detention or inspection of property as this is subject
• matter
The under
USFBL arbitration.
under section 9 of the arbitration act will have to
Filing of application under section
file an application to seek interim relief for either of the above
9 in the concerned jurisdiction court. The application should
be accompanied by the agreement copy, statement of
payment, default notices issued and bounced cheque.
• The Application should request appointment of receiver and
instruct to take into custody the asset, if necessary with
police help. It should also request the court to instruct the
customer not to create third party rights till the petition is
heard and settled. Additional request will be made to sell
the asset by public auction.
• On receiving the petition, the court will ask the financier to
serve a notice of the same to the customer. The notice will be
hand delivered or sent by registered AD.
• The customer, on receipt of this notice, is supposed to
appear in the court and file his reply to the notice. In case, he
doesn’t appear and reply to the notice, the court will give
ex--‐parte

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order.
Appointment of receiver and • If a prima facie case is made out, the court will also grant
ex-‐‐ parte interim injunction. Receiver will be appointed
repossession of asset after hearing out both parties by the court. The court will
order repossession of asset by the receiver.
• The receiver will take police help and that of the company staff
to locate and take the asset into his possession. It should
be ensured that Receiver files a report in the court
post possession /action taken by him in respect of the asset.
• The Arbitral tribunal will also require a party to provide
appropriate security in connection with interim order? under
the Act
• In parallel, claim petition should be filed before the
arbitrator and proceeding initiated (this is in case sec 9 is
invoked prior to arbitration proceeding being launched).
Disposal of asset • In case arbitration is taking a long time or getting prolonged,
then the company will request the court for disposal of asset.
• The sale of asset is done by public auction by giving an
advertisement in the newspaper. This is carried out by the
receiver only. The amount received on sale of asset is
deposited in the court.
• For the shortfall amount (if any), arbitration proceedings will
continue and court will grant an award at the end of the
arbitration process to recover from customer’s other assets.
5.3. SEC 138/25 NI ACT
Criminal proceeding under section 138/Sec 25 of NI act 1881 & 2002& Section 25 in The Payment
and Settlement Systems Act, 2007
A drawer (customer) would have committed an offence under this act which is punishable by law provided a
cheque/ECS issued by him to the payee USFBL in discharge of any debt or liability is returned
unpaid (bounced) by the drawee (customer USFBL) for insufficient funds in the customer account or the
cheque amount exceeds the arrangement the customer has with his bank to honor the cheque.
Procedure
Steps Description
Initiation • If the EMI cheques/ECS presented for payment towards loan

liability on behalf of the customer returns unpaid from the bank
due to insufficient funds or exceeds arrangement, then a cause

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is created to initiate proceedings under section 138 of NI Act

&Section 25 in The Payment and Settlement Systems Act, 2007.
• In case security PDC’s (postdated cheques) have been
banked for the loan outstanding amount after the loan recall
notice (LRN) has been sent and the cheque returns unpaid
from the bank due to insufficient funds or exceeds
arrangement, then a cause is created to initiate proceedings
under section 138 of NI Act.
Issue of notice • The cheque s that are returned unpaid by the bank with a memo
indicating that the cheque s have returned unpaid due to
insufficient funds or exceeds arrangement have to be
collected
& kept in custody for case initiation.
• Copy of the cheque and bank memo have to be handed over to
the company lawyer for him to issue notice under section 138 to
the drawer (customer) within 30 days of cheque return memo
date, demanding payment of the unpaid amount within 15
days of receipt of notice. The notice has to be sent by registered
post with acknowledgment due. In case of Partnership Firm,
the notice should be sent to the Firm and all the partners. In case
of Public Limited / Private Limited Company, the notice should
be sent to the Company and all the Directors who are in
charge of and are responsible for the conduct of the
business of the company.
• In case the customer pays the amount demanded within 15 days
of notice receipt, then no further proceeding is required and
Filing of case • Ifcase

theiscustomer
closed. does not pay within 15 days of notice receipt,
then based on the delivery acknowledgement of notice received
by the company, within the next 30 days, a complaint has to
be filed in the court by the lawyer. 30 days limit will be
counted after expiry of 15 days from the date of receipt of the
notice by customer. In case acknowledgement is not received
or date not mentioned, then the case will still be filed after
15 days of issuance of notice (assuming that the notice has been
delivered) within the next 30 days.
• The documents that are required for complaint filing are original
returned cheque s, original bank memo, Original Notice sent
along with the postal receipt and acknowledgement received

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from the customer (where available) and Loan Agreement

(however will be filed at subsequent stage)
• The company legal team based on the recent SC judgment & bill
passed in parliament will decide the jurisdiction in which the
case shall be filed.
Verification of documents • After filing of the case, a date is fixed by the court for
verification/sworn statement of the complainant in relation to
the complaint. The Power of attorney holder (which is a
company official i.e. the Legal manager/officer) gives a
statement confirming the facts of the case in court w.r.t case.
The key confirmations are existence of debt, cheque returning
unpaid due to insufficiency of funds, adequate notice & time
given to customer for payment on demand which has not been
honoured.
Issuance and service of summons • Post the verification in the court, either on the same day or
future date, the court will issue summons to the customer to
appear before the court to defend the charges. Summons is
issued by the court on payment of processing fee.
• The service of summons is one of the most critical factors for
expediting the case. Without summons being served, the next
stage will not be moved to, which is the appearance of the
accused to admit or deny charges based on which further
proceedings or judgement will be delivered
Bailable or non--‐bailable warrant • Upon serving the summons, the customer is expected to appear
before the court either to contest or admit the charges. In
stage
case the customer fails to appear in court without proving any
reason (ill--‐health or death in family); the court will issue bailable
or non-‐‐ bailable warrant against the customer to ensure his
presence in the court on the next hearing date. Generally, it
will happen that a bailable warrant is issued first and then
non--‐bailable warrant is issued in case the customer doesn’t heed
the bailable warrant.
• If the Bailable warrant (BW) or non bailable warrant (NBW) is
issued by the court, the same has to be served through the
concerned police station where the accused customer resides.
Again the company official (collection officer) should accompany
the policeman at the time of execution of the BW/NBW on
the accused customer for effective recovery.

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Recording of plea • Once the customer is present in the court, the court will
record his plea either to admit the offence of dishonor of
cheque s or not. In case he denies the charges, the court for
evidence by the complainant fixes a date.
Evidence, cross--‐examination & • On the next hearing date, evidence is led by the complainant by
way of affidavit and supporting documents. Once the evidence is
argument
lead, the customer gets an opportunity to defend himself. He
will choose to cross--‐examine the complainant. Also, he will call
on witnesses including the bank to support his argument.
Final order or judgment Post the argument on either side, the judgment is delivered in favor
of or against the accused as per law.
5.4. Demand Promissory Note

Promissory notes are one part of NEGOTIABLE INSTRUMENT. Section 83 of the BILLS OF EXCHANGE
ACT 1882& Governed by section 4 of NI Act 1881 --‐ refers to ‘an unconditional promise in writing made
by one person to another, signed by the maker, engaging to pay on demand or at a fixed or determinable future time,
a sum certain in money, to or to the order of a specified person or to a bearer.
• Promissory Note executed in one State may be presented in another State in India with
the stamp bearing on the promissory note. No additional stamp duty need to be paid
• PN has TIME validity. The Promissory Note is valid for only 3 years from the date of
execution
• Upon default by the customer, a formal notice to be send giving 7 days’ time to repay the
due
• If the customer doesn’t pay within 7 days of notice receipt, then based on the delivery
acknowledgement of notice received by the company, immediately civil suit will be filed in
the court by our empaneled advocate
• After filing of the case, a date is fixed by the court for verification/sworn statement of the
complainant in relation to the complaint. The Power of attorney holder (which is a company official i.e. the Legal
manager/officer) gives a statement confirming the facts of the case in court w.r.t case.
The key confirmations are existence of debt, cheque returning unpaid due to insufficiency of funds,
adequate notice & time given to customer for payment on demand which has not been honored.

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• Promissory Note can be executed partially also by writing behind PN about the part payment received, During the
legal course customer may agree to make the part payment, the same should be refer to
the court of law and PN will be valid for further execution for the balance amt.
• Post the argument on either side, the judgment is delivered in favor of or against the
accused as per law
5.5. LokAdalat
LokAdalat is a system of alternate dispute resolution. The lokadalat (people’s court) settles dispute through
conciliation and compromise. The courts will be presided by sitting judge or by retired judge,
social activists, or members of legal profession if so designated by competent court or by state
government. However, it does not have jurisdiction on matters related to non-‐‐ compoundable offences.
Procedure:-‐
Steps Description
Making an application in case of Any party to a dispute will, before the dispute is brought before
any Court, make an application to the Permanent
existing litigation LokAdalat for the settlement of dispute. It is written
statement with all the facts of the case & nature of dispute and is submitted with
all necessary proofs. Dates for lokadalat are fixed at
locations
Making an application in case of pre Any party, which is aggrieved by some action of non-‐‐
performance of some act as per the agreement, will file
litigation: necessary application duly signed by the Power of Attorney holder for
referring their dispute to a LokAdalat. A single application
also will be filed where there are a number. of opposite
parties/customers. The application is filed before the District
Judge or The Secretary, District Legal Service Authority.
Claim petition and issue of summons Notices are to be prepared by the Counsel on the format
prescribed by the authority for all the customers against
whom the proceedings are intended. Thereafter all the notices shall be
stamped and signed by the concerned officer of the
authority.
Dispatch of notices to the defaulters is done through

speed post, courier, police personnel, and even by

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hand by the officials of the company. This is to be ensured so that

there is a maximum turnout of the defaulting customers. If
applicable, Petitions are required to be prepared and to be filed
well in advance before the authority.
5.6. Debt Recovery Tribunal

The relief from DRT shall be sought in cases where there is a shortfall of greater than Rs.10 lakhs,
in recoveries of secured assets even after the disposal of the asset or in unsecured assets with
outstanding greater than Rs.10 lakhs, with no immediate remedy visible by pursuing through Sec
138/25 or Arbitration.
Procedure: --‐
• The tribunal consists of one person who is the presiding officer appointed by the
government.
• The USFBL will make an application to the tribunal within local limits of jurisdiction where
the customer is residing or carrying on business. Other banks may also join the application
if it has to recover dues from the same party.
• Tribunal will issue summons to the customer on receipt of application asking him to
reply
within 30 days as to why relief requested by the bank/institution should not be granted.
• The defendant (customer) will file a written statement within the stipulated time in his
defense including making a counter claim.
• The applicant (bank) will have the right to file a written statement in reply to the counter
claim of the defendant.
• The Tribunal has the right to pass an interim order (injunction or attachment) ordering the
customer not to transfer or dispose off assets without permission of the tribunal. In some
cases, it will ask the defendant to furnish some security to satisfy recovery of debt.
• The tribunal after hearing the appeal of defendant and will pass a final order.
• The presiding officer will issue a certificate for debt recovery based on the final order to
the tribunal recovery officer.
• The aggrieved party will appeal against the DRT order to the debt recovery appellate
tribunal (DRAT) within 45 days of receiving the order.
• Appeal to DRAT is allowed only after depositing 50/75% of the dues as decided by the DRT.
• On receipt of the order, the recovery officer of the tribunal will recover debt either:-‐
(a) By attaching and sale of the movable or immovable property of the defendant;
(b) By arresting the defendant and his detention in prison;

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(c) By appointing a receiver for the management of the movable or immovable properties
of the defendant
6. RECOVERY MECHANISMS --‐ Repossessions
The guidelines related to the Collection mechanisms for loan products offered by Ujjivan are as
stated below:
6.1. Giving notice to borrowers

• While written communications, telephonic reminders or visits by Ujjivan's representatives
to the borrowers place or residence will be used as loan follow up measures, Ujjivan shall
not initiate any legal or other recovery measures including repossession of the secured assets without giving due notice
in writing.
• Any genuine difficulties expressed/ disputes raised by the customer shall be considered by
Ujjivan before initiating recovery measures. USFBL shall follow all such procedures as required under law for recovery /
repossession of secured assets
6.2. Repossession of Secured assets

• Repossession of secured assets is aimed at recovery of dues and not to deprive the
borrower of the secured assets.
• The recovery process through repossession of secured assets will involve repossession,
valuation of secured assets and realization of secured assets through appropriate means.
• All these would be carried out in a fair and transparent manner.
• Repossession will be done only after issuing the notice as detailed above. Due process of
law will be followed while taking repossession of the secured assets.
• Ujjivan shall take all reasonable care for ensuring the safety and security of the secured
assets after taking custody, in the ordinary course of the business and relevant cost will be
charged to borrower.

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6.3. Valuation & sale of secured assets

• Valuation and sale of secured assets repossessed by Ujjivan shall be carried out as per
law
and in a fair and transparent manner.
• Ujjivan shall have right to recover from the borrower the balance due if any, after sale
of
secured assets.
• Excess amount if any, obtained on sale of the secured assets shall be paid to the person
entitled thereto in accordance with his rights and interests, after meeting all the related
expenses, provided Ujjivan is not having any other claims against the customer.
• USFBL's right to general lien and its implications shall be made clear to the borrower
while
executing the loan documents.
• In the case of hypothecated assets after taking possession if no payment is forthcoming, a
sale notice of 7 days’ time to respond will be sent to the borrower. Thereafter Ujjivan shall
arrange for sale of the hypothecated assets in such manner as deemed fit by Ujjivan.
• In respect of cases under SARFAESI Act as per the provisions of the Act, 30 days’ notice of
sale shall be sent. When public auction or by tender is envisaged, the same shall be published in two leading
newspapers out of which one is in local vernacular paper.
6.4. Opportunity for the borrower to take back the secured assets
• Ujjivan shall resort to repossession of secured assets only for the purpose of realization of
its dues as the last resort and not with intention of depriving the borrower of the secured
assets.
• Ujjivan shall be willing to consider handing over possession of secured assets to the borrower after repossession and
before concluding sale transaction of the secured assets, provided Ujjivan dues are cleared
in full.
• If satisfied with the genuineness of borrower's inability to pay the loan installments as per
the schedule, which resulted in the repossession of secured assets, Ujjivan may consider
handing over the secured assets after receiving the installments in arrears. However this
would be subject to giving an undertaking by the borrower to repay the remaining installments / dues in
future and to maintain the loan account as performing asset until closure of the account
as per the terms of the loan agreements(s) to the satisfaction of Ujjivan.
• If the amounts are repaid, either as stipulated by Ujjivan or dues settled as agreed to,
possession of seized assets shall be handed back to the borrower within 15 working days

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after date of permission from the competent authority of Ujjivan or Court/DRT concerned
if recovery proceedings are filed and pending before such forums.
7. SKIP TRACING PROCESS

Customer who are not traceable at her/his residence or place of work and who is not contactable
through telephone/mobile.
1. These are customers who have gone away suddenly and secretly without informing
anybody. Where no information is available with the neighbors or group members.
2. Business place has been shut down and no information known to the fellow
businessmen
3. No prior notice or intimation has been given to us.
Customers who not available during the visit/door is locked/not reachable or not receiving calls
for 3 consecutive times will be classified as an abscond customer.
Workflow:
Activity Ageing Responsibility

Overdue cases identified to be marked as ‘temporarily not Day 1-‐ 3 CRO/LO/RO
contactable’ (TNC) in Indus collections software (IC4)
Mandatory visit by CRM after 2 consecutive failed attempts by the Day 4-‐ 7 CRM & CBH&
CRO/LO to contact the customer. Mark as abscond, if that is the Cluster credit
case, on IC4; overdue reason has be authorized by the CBH after manager
necessary due diligence and/or discussion
Cases authorized by CBH will be automatically allocated to the Collections team Day 8 CBH and
Collection
Manager
If the CBH fails to authorize the overdue reason, cases will be auto Day 15 Collection
allocated to collections team on the 15th day Manager
Operations
Visit by the Collection officer and confirmation/additional input Day 8-‐ Collection
given to Cluster Collections Manager& Collection Manager 30 Manager
Non-‐ traceable abscond overdue cases will be flagged off in Br.net, 60 days National
interest accrual stopped and will subsequently attract 100% provisioning over 60 Collections
days (based on recommendation by the collection manager) Manager (NCM)

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The various steps that will be initiated for skip tracing to locate the new office or residence
address
1. Check with existing neighbors and relatives

2. Check with customer’s customer or customer suppliers
3. Check on permanent address, KYC info mentioned in the application form
4. Check with references with whom TVR was done
5. Check with the local gas Collector if gas receipt was provided as address proof
6. Do a Bureau scrub to check if other contact and addresses are available
7. Check with the local post office if the customer has left any forwarding address
8. Check with local school where customers wards were studying
9. Any public utility service & site – electoral rolls, telephone directories, land record portals
10. Last place worked for salaried customer or Co-‐‐applicant
11. Check with ration depo to see if there are any updated address or recent purchases
Alternate searches
1. In case of self-‐‐employed professionals or non-‐‐professional, searches can be made in
business information portal, Job portal, Advertisement portal and other social sites.
2. For customers who may have previously downloaded mobile banking application of Ujjivan onto their IOS or Android
phones, updated present location of the individual may be available with the Ujjivan in case they have not
changed their mobile instrument. Collections team must seek necessary information from IT
team in such instances to get the updated co-‐‐ordinates of such customers.
3. Check with social network sites to see the updated information or check with common
friends if any.
4. Check with Job portals if customer has applied for Jobs in any jobsites
5. Check the recent client ATM transactions of Ujjivan accounts to locate the client location.
Upon tracing, the case should be visited by collector in the new address for resolution. The collector can be reallocated if the
new address comes under the working area of other branch of Ujjivan.
8. POLICY ON NON--‐STARTERS
Introduction:

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After our experience of poor customer selection in the last two years in pockets leading to extensive credit write-‐ offs, it is necessary to
put in place strict disciplines for future customer selection. The ‘Non Starter Loan monitoring and follow
through disciplinary process is one such program. A loan which is a ‘non-‐ starter’ clearly indicates
poor customer selection either through gross negligence or fraud. A non-‐ starter is a customer
who intentionally fails to repay one or all of the first four installments.
Non-‐‐starter Definition:
A Non-‐‐starter is a customer who intentionally fails to repay one or all of the first four
installments.
1. One installment means – 1 monthly installment, 2 bi-‐ monthly installments, 4 weekly

installments
2. Disciplinary actions on Nonstarters for CRO, LO, RO, Sanctioning authority person, House
visit and GRT person shall not include:
a. Rescheduled loans
b. Death customers & spouse death cases
c. Genuine & acceptable reasons as identified during credit investigation (Refer
annexure)
Non-‐‐starter loans under group lending:
Lending Loan Non-‐‐starter

Actions
Type Originator occurrence**
− CRO will not qualify for any Performance allowances &

First time other incentives (through the R & R programs)*.
− Warning email from DM with a copy to RHM, RCM
− Written warning from HR. Acknowledgment of Warning
CRO letter shall be filed in the employee personal file
Second time
− Staff will not be eligible to take Staff loan until the
accounts get regularized
Group − Staff will not be eligible for annual performance grading
Third Time − Termination and Recovery of the loss amount from
the of EE and FEE during the FY
First time employee
− House visitfinal settlement
person shall shall
be putbe conditional^
under watch list by
Credit.
House visit
− Warning email from DM with a copy to RHM, RCM
person Second time − Staff cannot be nominated for GRT authorization (if
applicable)
− Staff will not be eligible for annual performance grading

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of EE and FEE during the FY until regularization of the

loan account
letter shall be filed in the employee personal file

Third Time − Staff will not qualify for any applicable incentives/R& R*
accounts get regularized.
− House visit certification will be retracted if the
≥ 4 Non accounts
− are
Termination and Recovery
not regularized within 45ofdays
theofloss amount from
default.
starters the
employee final settlement shall be conditional^
− Warning email from DM with a copy to RHM, RCM &
5 to 8 non
COO
starters − Staff shall not qualify for any applicable incentives/ R&
R*
letter shall be filed in the employee personal file

GRT Person 8 to 10 non
starters accounts get regularized
− Staff will not be eligible for annual performance grading
of EE and FEE during the FY

>10 Non − GRT certification will be retracted until the number of
− non--‐starters
Termination are
andreduced
Recovery of the 3loss amount from
to below
starters the
employee final settlement shall be conditional^
Other Points:
• **Occurrence of non-‐ starters is defined as follows: Number of loans in default with first
four installments yet to be fully recovered. Eg: Second account appears in non-‐ starter
when the first non-‐ starter is yet to be regularized/is partially collected.
• *Employee will start receiving incentives from the month the accounts get regularized. (previous month
incentives shall not be paid out as arrears)
Non-‐‐starter loan under Secured and unsecured individual lending:
Lending Loan Originator Non-‐‐Starter Actions

Type occurrence**

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Individua Loan First time Warning email from RBM with a copy
l loans officer/Relationship marked to RHM, RCM. Staff shall not
officer qualify for any applicable incentives/ R& R
Second time Written warning from HR.
Acknowledgment of Warning letter shall be
filed in the employee personal file
Staff will not be eligible to take Staff loan
until the accounts get regularized.
Staff will not be eligible for annual
performance grading of EE and FEE during
the FY.
Third Time Termination. Recovery of the loss amount
from the employee final settlement shall
be conditional^.
Credit Officer ≤3 Non starters Warning email from RBM/ RCM with a
Hub/Sanctioning copy marked to RHM.
Authority Person 4 to 6 Non starters Written warning from HR.
Acknowledgment of Warning letter shall be
filed in the employee personal file
Staff shall not qualify for any applicable
incentives/R&R
Staff will not be eligible to take Staff loan
until the accounts gets regularized
Staff will not be eligible for annual
performance grading of EE and FEE during
the FY
>6 Non starters Certification shall be withdrawn &
employees shall be put on PIP. Recovery of
the loss amount from the employee final
settlement shall be conditional^.
Action plan:
1. Branches having 5 or more nonstarters should review the customer acquisition quality and
DM/RBM/RCM should present an action plan to the Collection management team. Branches with > 5 non-
‐ starter shall not be eligible for best branch award or any other such awards as and when
announced by Ujjivan.
2. All non-‐ starter loans shall be investigated by credit within 30 days of default and the findings of the investigation shall be
shared with DM, RCM, COO/RBM and Collection team.
3. In some exceptional cases there could be genuine reasons for customers not being able to
repay the first four installments. These cases will be investigated by credit & if found genuine no disciplinary action
will be taken. Ujjivan is undertaking this to ensure that basic responsibilities to induct good
customers are taken care off and credit is extended only to those who are creditworthy.

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4. Non Starter Report will be produced every month and implementation of the program will
be the responsibility of the DM/RBM, Regional HR Manager & the Regional Credit Manager.
5. Non-‐ starter status for each region & the action taken should be reviewed during the Regional monthly business
reviews.
All individual records of persons originating the loan/conducting house visit and GRT will be tracked in CBS and Credit and HR will be
responsible to initiate disciplinary action through HR Regional committee
^Important Note: Any severe negligence (Conditional) leading to loss of reputation or monetary
shall be considered for recovery of loss amount from employee FFS.
Recovery of the loss amount from the employee final settlement shall be conditional^.
Genuine reasons of exclusion from the policy on non-‐‐starter
Medical reasons as verified through medical documents
Financial distress caused by death of earning member, natural calamities or act of nature /
accidents caused by fire & any other act that has an impact on livelihood of the customer and
business.
Mass default caused by community issues or any other such external factors
Technical reasons such as window changes, wrong product booking
9. COLLECTION STRATEGIES FOR MASS DEFAULT BRANCHES

Mass Defaults are cases of defaults encouraged by local stakeholders in society such as religious
heads, caste based organizations and local politicians etc. These are often initiated by local ring
leaders. They can potentially get together customers not to repay by spreading false rumors regarding the lending
institutions and or deliberately instigate customer not to pay on religious, caste or political
grounds.
9.1. Identification of mass default cases

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The branch team should inform the distributions supervisors immediately after the identification
of mass defaults in their working areas.
• CRO/LO should update this information in collection software and which will be
immediately notified to the Branch manager.
• CRM should visit the area which is possibly affected by mass default and talk to the customers and understand
the situation. CRM should update his remarks in IC4 confirming the mass default situation
and inform his next 2 level supervisors
• CBH (Cluster Branch Head) and AM of the branch to thoroughly discuss the situation with
branch team and authorise the mass default remarks in IC4.
• RBM, RCM, RVM, RRCM Head of Microfinance & Branch Banking and Head of Credit and
Collections – Microfinance shall be notified immediately and action will be taken on a case
to case basis
9.2. Strategies for handling mass default cases:

• Form a branch level committee for handling mass default cases which will be headed by a
supervisory team member.

• Committee to identify the most critical areas/ Centres/ groups which are impacted by
repayment issues and identify the CRO/LOs with highest number of default accounts.
• Mentor to spend two days in a week in the affected branch and visit the affected areas.
Discuss the strategies with Branch.
• Allocate a dedicated collection officer/ Vigilance officer/ Credit officer for handling high
impact areas/LO/CRO
• We prefer to send women employees in those affected areas, if required accompanied by
other CRO/LO/ACRM/CRM etc
• Based upon criticality, we prefer to discontinue centre meetings and start door step
follow-‐ up for all mass default customers.
• Train the branch staff on collection strategies and disciplines to be followed during
collections (refer to Guidelines laid down in fair practise code of collection policy)
• CRO/LO/allotted officer to visit all overdue customers of the branch and distribute Ujjivan
leaflet (If situation demands) and showcase newspapers cut outs which carries the
legitimate information regarding lending institution and negate the false rumours.
• Educate customers on the wrong happenings and guide them suitably on the ways to
overcome such situations.

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• As a fair collection practice, start the day early for collection @7 AM and close by dusk.
Any exceptions for collections beyond 7 PM will require approvals from the Area manager.
• Use of coercive collection practices may prove counterproductive; hence PM & AM shall
review the quality of staff interactions with default customers and evaluate complaints on
forceful collection practices. Branch staff shall follow the guidelines laid down in fair practices code of collections
policy.
• CRM/ACRM to assist collections in all critical areas.
• Investigate the actual reason for mass default (business slow down, behaviour issues etc.)
and identify customer’s unwillingness/inability to pay.
• Seek support from state MFI associations or MFIN wherever necessary.
• Ensure collection on Promise to pay dates from customers.
Status of all mass default branches with action plan should be discussed in RLTs. RBM & RCM to
present the summary of affected branches to management as part of monthly business
presentation.
10. REPAYMENT MODE

Modes of repayments:
Customer can opt for any of the following mode of payments.
1. Cash repayment at center meeting

2. Repayment at Branch office
3. Postdated cheque
4. ACH/ECS
5. NEFT/RTGS (In future)
Payment process for cash repayments:
Collector Hands-‐‐off to Cashier:
• All payments collected by the collectors in a day must be handed over to the cashier on
the same day.
• If the overdue is collected within 7 days of due date the relationship officer needs to
update the transactions in handheld device.
• All greater than 7 days overdue collection needs to be handed over to Cashier.
• All the collection entries posted in the Core system will be supervised by the branch
manager.

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• At the point of hands off cashier must scrutinize each receipt for correctness of the
deposit.
• The Cashier must ensure that the original receipt has been handed over to the customer
and all the signatures are present.
• The carbon copies must not be overwritten in ink under any circumstances. Once the cashier is satisfied with the validity of the
receipt issued he / she should update the payment in system, with the details of the payment.
• The collector must ensure that receipts are issued serially and there is no break in series.
Any such discrepancies must be highlighted to Collector immediately and also to branch
manager.
Payment deposit process:
For all the cash payments collected in a day, the collector must deposit the cash with Branch on
the same day. All Cheque / DD’s collected by the collector needs to be deposited with the Branch
with proper acknowledgement, record of which needs to be filed at the DCA/ IC4
Receipt Audit:
Periodic audit on receipts shall be done by the internal auditors of Ujjivan. Any discrepancies found will be highlighted to the Distribution
supervisors/Collection Managers for corrective actions.
11. RECEIPT BOOK PROCESS – for field collections
11.1. Indenting, distribution, custody and verification of Receipt Books

Each collector will have a separate receipt book. Supervisors at all levels must ensure that there is
no sharing of receipt book. The Receipt Books are given to collections staffs for issuance to customers on collection of
overdue amount on field.
RESPONSIBILITY:
Regional/ Collections Manager will be responsible for the indent and record maintenance.
PROCESS FLOW:
1) Collections Manager is responsibility to co-‐ ordinate with Admin department for printing
and procurement of Receipt Books as per the set format at regular intervals

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2) Collections Manager will indent receipt books to the Admin Department (Stationery-‐‐In-‐ Charge) as and when
required for supply to the collections staffs
3) Numbers of receipt books issued, should be tracked collection officer-‐ wise
4) Concerned staff should obtain signature of Cashier/CRM on the book copy of each receipt
while handing over cash for the overdue amount collected on the field
5) Concerned staff should send the details of issued receipt numbers as per the format in
ANNEXURE I to the respective Regional collections Manger every month
6) The used receipt books should be handed-‐ over to Collections Manager at their respective
offices for custody and should be made available during audit period
11.2. Record maintenance and audit checks:
1) Collections Manager should maintain a record of issued Receipt Books

2) The details should include, number of books indented, issued, Employee name, Employee
Number, Designation, Receipt Book Number, received date and issued date
3) Vigilance Supervisor should verify the physical copies of receipt books during their branch
visits
4) Audit should verify the physical copies of receipt books once in every quarter at RO.
11.3. Process for lost receipt book

For any receipt book lost/stolen reported by the user, a complaint (Diary entry) will be lodged by
the Cluster/Collection manager along with Vigilance team with the nearest police station and advertisement issued in local
newspaper giving details of the lost receipt book and advising the public not to accept cash from
such receipt nos.
12. COLLECTION MANAGEMENT SOFTWARE (IC4)
12.1. Introduction
• Indus collection system (IC4) is Ujjivan’s collection management system. The collection
system will have pre-‐ configured workflows to manage a variety of collections processes
like pre-‐ emptive dunning, Tele-‐‐calling, Field visits, write off, repot viewing etc. In Addition,

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it will allow users to modify these workflows to suit their business requirements. The workflow can also be done by
configuring Rules that can be automatically triggered after certain number of days or
performing a specific activity or action-‐ result by collector.
• The collection system will have an allocation engine (to define which users will work on
what kind of cases’). The list of the allocated cases can be prioritized and pushed for collector follow-‐ ups as per the
defined sequence
• There will be work-‐ list management that caters to the requirement of different lists for
both the supervisors as wells as the collectors. These to-‐‐do lists are required for specific
purposes like managing authorizations, escalations & supervisory monitoring
• The collection system will also have an account management facility. This would include
single view of customer information, smart search facility using multiple parameters, apply
single collection action on multiple cases and account handling of exceptional cases.
• The collection system will help track overall performance of the tele-‐‐caller and field
collectors. Performance tracking would include amongst others efficiency (number of calls
/ visits made), the effectiveness (% of promises taken, % of promises kept) and the
productivity (sum collected, % normalized etc.)
• The system will have the capability that templates can be configured for different purposes like Reminder,
Payment received, Legal Action initiation. These templates will be used for customer communication.
The communication can be based on customer preference in terms of language, mode of
communication (SMS, Email, Letter)
• The system will also have document management module, which allow various collection
team to store and manage electronic documents. It facilitates uploading and storage of
document for individuals.
• The collection system will have the functionality of registering, tracking and controlling receipt books & receipts. The system will
maintain the log of the new receipt books printed as well as the transaction details of receipts issued
to the customer. It also will have the ability to mark receipts, as lost or cancelled when
receipts are either physically damaged or are cancelled.

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12.2. IC4 Overview:

Accounts will migrate to IC4 on the 1st day of overdue, subsequent to the EOD process.
IC4, as a system has both Mobile and Web Interfaces with field staff using the Mobility
platforms and Supervisory/back-‐ end teams using the Web Interfaces
12.3. Mobile Module:

Mobile module will be used by CRO, LO/RO, CRM and field Collection Officers (CO)
CRO/LO/RO will get to see accounts mapped to them with complete details
Collection Officers will get details of all cases allocated to them centrally
12.4. Web module:

Web module will enable all supervisors and collection managers to view collections progress
made by each CRO/LO/RO &CO.
12.5. Collection Management Responsibilities:

The below section defines the role based collection responsibilities:
Designation Responsibilities
CRO/LO/RO • Should mandatorily log in to the mobile IC4 app at the start
of
the day
• Fetch current overdue data from menu button after log in
• Study the Customer follow up history in the Stat Card prior
visit
• Input reasons for Overdue during the visit (Standard reasons
Annexed)
• Updated contact number and/or address to be captured in
case of changes
• Immediately after the visit, mark complete in the main
menu
CRM/ACRM • CRM
and synch data overdue details on Mobile as well as web
can access
• Data
CRM synch
will getis an
mandatory
automated at theemailendevery
of every
day business
morning day
from IC4
with the following details

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o Overdue report with all follow-‐ up details

o CRO wise PTP report -‐‐ PTPs scheduled for the day and
status of previous day
o Ageing report: bucket wise aging of accounts (weekly)
• Supervise account wise actions taken by the CRO
o Recommend next level authorization for critical
accounts
o Authorize change in overdue reasons, if any, based on
his visit
o Review with CROs on auto escalated cases such as,
‘Visit not done’ and ‘PTP not visited’
• Visit all critical cases
• In case of CRO leave, temporarily re-‐ allocate the cases to
other team members
• Initiate Write off process for loans > 180 days
CBH • Supervise and Recommend/Authorize Critical cases after
review/visit for further action – Collections and legal actions
• Monitor progress of IC4 Usage and Collections using dash
boards & reports
• Update remarks for cases visited by self
• Approve Write offs
AM/DM • Monitor collections using IC4 dashboards and reports
• Review performance with branch team-‐ ‘Unvisited cases’,
‘Action not taken’ or ‘Poor follow-‐ up’
Field credit • Visit Non Starter and Critical cases as assigned and IL Cases
officer/Credit officer <12 MOB
Collection officer • Responsible for collection of GL, IL & Critical cases as per
allocations made on Indus by the Collections Manager
Cluster/collection • Ensure monthly allocation of accounts to Collection Officers, monitor efficiency and co-
manager ‐ ordinate with the legal team for legal cases
Tele-‐‐calling Team • Call CRMs and CROs for cases not updated in IC4
• Call Individual Lending Customers >7 days and input
remarks
in IC4
• Resolve technical overdue, if any, as reported by the
branch
team in IC4
• Collection reminder notices to GL & IL OD clients through IC4
as requested by the Branch. Pop ups will appear as per the matrix shown in
product wise work flow
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13. TELE--‐CALLING FOR MICRO FINANCE IL, HOUSING & MSE
• Tele-‐‐calling will be based on auto allocation of cases from core system to COLLECTION
SYSTEM IC4.
• Each Tele-‐ caller will be assigned one or more work lists. Prioritization of work lists for auto
pop-‐ up will be done by the Tele-‐ calling Team lead/Asst. Manager in consultation with the
Regional Collections Manager for each region.
• Prioritization conditions in the order for action of these work lists will be
# Delinquency/bucket
# Principal outstanding
# Loan status (Mature/Non mature)
# Point in time of the cycle (calling schedule requirement)
• Unapplied payment and cheque bounce information will be taken into account before
making a collection call.
• Calling schedule: During a monthly collection cycle, Tele-‐ calling will be

carried out in the following broad Phases
DAY OF MONTH TELE-‐‐CALLING PHASE

1st to 5th Special calling of previous month cases.
5th to 20th First Bounce Calling
20th to 30th Normal Calling based on allocation.
• Prioritization of pop-‐‐ups during Tele-‐ calling will vary with the requirement of the Tele-‐‐ calling phases. During the normal
Tele-‐‐calling period, the aim will be to maximize coverage/contacts, elicit Post Pones and follow-‐‐up on accounts
requiring call back. The priority of pop-‐ ups during the period will be:

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# cases with no follow-‐ up

# cases with PTPs for the next day s
# cases to be called back that day
# cases with no contact
# cases with PTP but not contacted by field team
# others
• Pop-‐‐up priority for first bounce calling will be for cases that move to 4th day during the
month system run. Balance priority will be as per the normal calling phase.
• Trails will be updated on-‐‐line by the Tele-‐ callers for cases allocated to them on daily basis
in IC4.
• Any supervisory review cases will be auctioned within two working days by supervisor.
• Daily collector-‐ level Tele-‐ calling productivity MIS will be obtained from IC4 along with the
bucket-‐ wise flows MIS. These will be consolidated and compiled every month for review
by the Collection Manager along with tele-‐ calling unit head
• Collections team to ensure that all Tele-‐ callers have an easy access to all the relevant policies and procedures, in order to
enhance knowledge/skills which will help improve collections.
• Tele-‐‐calling schedule to be modified by the Tele-‐ calling team lead/asst. manager based on
capacity and situational constraints, also needs to ensure that the Tele-‐ calling team is adequately capacitated.
• The ACR (Account-‐ to-‐ Collector-‐ Ratio) of each Tele-‐ caller needs to be monitored and load
balancing needs to be done across the unit.
• Tele-‐‐calling team lead/asst. manager of each collection unit must monitor the calls of each
Tele-‐ caller (twice a month). For new employees and those with performance issues the
monitoring needs to be more frequent. Feedback needs to be given to each Tele-‐‐caller in
order to enhance his/her effectiveness.
• The Tele-‐‐calling team lead/asst. manager needs to review all productivity indicators (Calls
per day, success calls, PTP generated, PTP conversion rate, accounts resolved) for each Tele-‐‐caller at least once a week. For
employees who are new and for those with performance issues, this review needs to be conducted
more frequently and counselling and remedial training must be provided if necessary.
• The Collections Manager, may also, from time to time, decide to run contests / motivational programs to enhance collection
effectiveness. A Performance-‐‐ Incentive-‐ Program is part of the affiliate compensation structure for Tele-
‐ callers.

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• In the event of customer raising complaint about calling for any reason, this will be handled by Team lead as a
first level and Asst. Manager second level and escalation will move on till tele-‐ calling unit
head/NCM depending on severity of the complaint and resolutions
14. COLLECTIONS CAPACITY PLANNING
It is the responsibility of National Collection Manager along with the Strategy team to have a
comprehensive plan for people management. The plan must include:
# Formalized capacity planning process tied to hiring plans
# Recruitment strategy including Job descriptions for various profiles
# Performance improvement plans and monthly goals
# Process to manage attrition and successor planning
# Compensation/ Incentive plans at all levels
National Collection Manager should take a clear line of sight on loan volume forecasting for the
next 3 months from strategy team, basis which hiring plans need to be recommended to respective Credit Heads for
approval. The forecasting should consider the following parameters:
# Business portfolio performance and growth forecasts

# Target Staffing (Accounts to Collector Ratios –ACR) driven by strategy,
management span of control, and intensity levels
Guidelines on ACR (with a +/-‐ 10% tolerance levels) are as follows,
Activity Role Bucket Staffing
1 caller for 450 cases (80 calls
Tele-‐‐calling(call-‐‐ Fresh bounce
Tele-‐ caller a day * 25 days * 80% RPC/4 (avg.
centre) & All DPD cases
intensity per accounts).
Tele-‐‐calling(call-‐‐ Fresh bounce
Team Leader 1 team leader for 10 agents
centre) & All DPD cases
Field collection Officers– Collections >30 Days DPD 1 CO for 70 accounts

Cluster Manager –
Field collection All Buckets 1 CCM for 6-‐ 7 CO
Collections
Area Manager-‐
Field collections All Buckets 1 ACM for 6 – 7 CCM
Collections
Field collections Regional Manager All Buckets 1 RCM for every region

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Collections
14.1. Collection reviews

Reviewee Scope Timeline
Reviewer
Tele-‐‐calling Manager • Team leader • Allocation • Daily

• Tele-‐ caller • Productivity& • Weekly(or
Performance milestone)
• Staffing
Officers – Collections • Allocation • Monthly
Cluster Manager -‐
Collections • Productivity & • Daily & Weekly(or
Performance milestone)
• Staffing • Monthly
Area Manager -‐‐ Cluster Manager – • Allocation • Daily
Collection Manager Collections • Productivity • Weekly(or
• Performance milestone)
• Staffing
Area Manager – • Overall • Monthly
Daily &
Regional/State
Collections performance Weekly(or milestone)
Manager -‐ Collection
• Exception cases • Monthly
Regional/Area • Overall • Daily &
National Manager –
& Manager – Performance Weekly(or milestone)
Collections
Recovery Collections • Exception cases • Monthly
National Manager –
Collection • Collection • Weekly
Collections & Operations Manager System • Monthly
Recovery • Collection MIS • Weekly
• Collection
Regional Legal • Case filing status •
Operations Monthly
National Collection
Along with RVM & Manager • Filed case update
Vigilance Head
Empanelled lawyer • Case filing status • Weekly
Regional Legal
Manager • Filed case • Monthly
update
14.2. Supervisory Review

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The objective of such action is to review accounts that have been escalated to the supervisor or
for ascertaining the adequacy of follow-‐ up in IC4. The following types of accounts will be reviewed
by the supervisor:-‐
$ Accounts with no dispositions
$ Accounts with no contacts after repeated follow-‐‐ups
$ Accounts with no promises after repeated contacts
$ Accounts have promises have been broken repeatedly
$ Accounts which is declared as Abscond, Mass defaults, Sub-‐ lending, Disputes
$ Exception/Sensitive accounts
15. COLLECTOR TRAINING
• The concerned collection manager will be responsible for the training of collector
• Every collector who joins must undergo training on product, process, communication and
negotiation skills and code of conduct as per Induction process.
• As part of induction, new collector must also be sent on joint visits with senior collector
prior to doing independent skills.
• No collector should go to field without completion of training. Each collector has to be
trained and signed off the training record before going on filed with receipt book.
• Collection Manager to ensure completion of DRA Certification Training for collectors
16. COLLECTION MIS
To track the effectiveness of collection activity, following MIS shall be generated, circulated and
tracked. The following reports will be required for monitoring (capturing both units and POS) for
each product separately and consolidated
• % paid on or before due date (for cash payment customer) /On time repayment rate
• Cheque bounce report (where PDC/ECS is used)
• Bucket wise collection efficiency (bucket 0, 1-‐ 30 DPD, 31-‐ 60 DPD, 61-‐‐90 DPD, > 90 DPD, >
180 DPD, > 365 DPD)

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• 1+, 30+, 90+ DPD delinquency (coincidental and lag)

• Bucket wise Flow rates (net flow, RF, RB, Stabilized, Normalized)
• Vintage delinquency
• Asset held for sale (SBL/LAP)
• Legal – by type of cases & stages
• Productivity MIS (Collection efficiency by field collector, collection officer, Product wise
collection efficiency, tele caller productivity report)
• Any other collection MIS required by business or Credit
• Non-‐‐starter Report
• Product wise delinquency
• PTP due repot and PTP status report
• Collection log in & activity report
All the predefined MIS is been in built in IC4, which can be viewed in WEB application of IC4
The above MIS should be tracked at branch, regional and national level. All MIS should have
trend analysis for 3-‐ 6 months both on units and basis amount
17. DAILY COLLECTION REPORT

DCR will be monitored through collection management system IC4, all the trials with OD reasons
and visit details will be captured in IC4 and daily automated reports are triggered to the supervisors for better control
18. LATE PAYMENT CHARGES– ALL PRODUCTS

For all Secured, MSE and unsecured individual loans, late repayment charges applicable shall be
as per the respective Product Policy programs.
Any exception approval on charges waive off shall require approvals from Credit Policy
committee.
19. LOAN WRITE OFFs

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When all avenues of recovery of overdue accounts have been exhausted and further recovery
efforts are deemed futile, a recommendation can be made by branch head to RCM for loan write
off. Upon confirmation from Credit, write off process can be initiated & the write off memo shall
be updated with remarks based on visits made by all parties. The write off memo shall be signed
off by Distribution supervisors, RCM /RBM, Head of Microfinance & Branch Banking and Head of
Credit and Collections – Microfinance for Microfinance GL and IL loans.
Head of Credit and Collections – Microfinance shall be the final approval authority for writing off
all loans in Microfinance GL & IL. However cases identified as Fraud by regional fraud management committee with POS
greater than Rs 1 lacs requires final approval from CEO & MD.
19.1. Process for Write off (Existing)

Step 1: Area manager to recommend loan write off
• Cases that exceed > 180 days can be recommended for Write off
• Death (Not claimable)/Suicide can be written off before 180 days
Step 2: Field credit officer to visit customers and submit a recommendation to the Credit Manager
Step 3: Based on the FCO recommendation, Credit to send the final list of write of cases to the
branch.
Step 4: CRM, FCO, CBH/AM/DM to visit customer and complete “write off Memo.”
Following documents to be verified and copies submitted to RO along with form:
• Death: Verify with group members / relatives / neighbors. Collect death certificate
• Over indebtedness: Copy of Loan Cards of all live loans
• Daily Collections Report: Attaching a copy of the DCR with the form is mandatory (Not
required if the trials are available in IC4)
Step 5: Regional Credit Department to verify documents
Step 6: RBM to verify documents and sign off the form
Step 7: RCM will then verify all the recommendations and take a decision & sign off. It is then sent
to the Business Heads and Head of Credit and Collections – Microfinance.
Step 8: Head of Credit and Collections – Microfinance has the ultimate Authority to take final call
on write off loans.
Credit will pass on the write-‐ off memos to Operations and ensure appropriate entries are passed
in the respective General Ledger to close the customer’s account.
Backend process for write offs:

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Upon receiving the forms from credit, Regional operations team will pass the write off entries
in system which will work on a maker checker concept. The forms will be finally get sign off
from regional operations manager post write off entries in system
19.2. System write-‐‐off process using IC4

IC4 will have module for initiating write off in system. Following are the process for doing system
write-‐‐offs.
1. CRM/ Branch head to initiate the write off for >180 days cases. Write off process can be
initiated before 180 days under special circumstances.
2. Initiation request from CRM/ Branch head shall be authorised by next 2 level supervisors
in distribution.
3. Authorised write off requests will appear to area collection manager who will assign the
cases to final visit from a collection officer.
4. Collection officer to visit the case and provide his remarks
5. Area collection manager to review the write off request and approve the case for next
level approval.
6. The write off request to go through the following approval authorities
a. RBM
b. RCM
c. NCM
d. Business Head
e. Head credit.
7. Final approvals: Head credit will be the final authority in approving all write off requests.
Post Head credit approvals a write off trigger will be send from IC4 to core system.
8. Operations team to pass the write off entries in system as per the write off trigger
received in core system
19.3. Write off recovery:

Once the account is classified as irrecoverable and has been written off from the books of accounts, an MIS of the same shall
be maintained at credit and shared with branches, consisting the amount written off and the
loan originator details of written off accounts from inception to date. This information will be
sent to the branches with a copy marked to distribution supervisor
& DM. This exercise will be carried out for all write off cases except for write offs on accounts of
staff fraud.

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Branch should make all efforts to collect the amount due from default customer. If they feel they
need assistance from the loan originated staff, the same can be taken if appropriate. If the branch
believes that customer is making repayments to some other MFIs those customers can be referred to credit dept. to see
the current status of the customer in Credit bureau and based on the bureau details collection
efforts should be initiated.
Post recovery of written off accounts, entries are passed in the system using “Write off recovery
module” which is available in the software. The current system allows passing the entries of written off account post recovery
to the written off Loan ID only thereby eliminating the earlier procedure of posting entries to the
GL account.
Write off process in the software:
When a bad debt is recovered post write off, the write off recovery module of Br.Net shall be
used to pass customer specific entries.
• Loans write offs are done through module Loan write off in the software post August,
2012.
• Reasons for write offs should be selected from the drop down available in the module.
• Select “Is recoverable” screen in the module if the due is recoverable post write offs.
• Only the OSP amount will be written off.
Write off Recovery module:
Loans which are recovered post write off post, recovery amount will be posted in the module “Write off recovery” account ID wise(Only for
loans which are written off post August 2012 through Loan write off module) eliminating the earlier
procedure where the postings were done through GL account.
Procedure is listed below:
• Select Loan ID
• System automatically shows recovery ID and the General recovery ledger which is linked
to the product
• Add the recovery amount in the software and update the transaction.
• Once the transaction is posted successfully, the screen shows the total recovery amount
and the last recovery date.
19.4. Monitoring Bad debt Recovery

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To mitigate the possibilities of staff misappropriation of recovered amount from a default

customer, a random verification for 20% of write off accounts must be done by credit and vigilance on a quarterly basis. MIS team
to share write off recovery report with credit & this tracker shall be shared with distribution, credit, vigilance and
audit on a monthly basis.
20. STAFF LOAN RECOVERY
Introduction
With the increasing numbers of staff loan ODs, the present recovery process will be followed for
effective supervision and control of staff loan ODs.
Objective:
The basic objective of the process is to establish practical guidelines to be followed by the related
parties/ relevant departments in the event of reporting of staff loan OD. The revised process also
aims at originating preventive steps by the company before the actual OD is reported in the books.
Responsibility:
The primary responsibility in recovering the over dues lies with the Regional HR Department. However, the Regional HR
Department will work closely with the Regional Collections & Vigilance Department for cases
beyond 60 days for initiating Legal actionable and closure thereof.
Classification of Staff Loan ODs:
Staff Loan ODs generally arises on account of any of the following reasons and can be broadly
classified as Pre and Post staff Loan ODs:
1. Employee Resignation
2. Female Employee on Maternity Leave
3. Employee Death
4. Employee Termination/ Employee abscond/Employee Fraud/willful default by Employee
20.1. Recovery Process -‐‐ Pre-‐‐Staff Loan OD:

I. In order to prevent arising of Staff Loan ODs at the initial stage, Regional HR Payroll Officer

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should circulate the list of resigned/salary hold employees having outstanding staff loan
dues to the Regional HR and Collection manager by 5th of every month.
II. Upon receiving the list, collection team should contact and intimate the concerned
employee to settle the outstanding loan amount before the actual OD is reported in the
books.
20.2. Recovery Process -‐‐ Post-‐‐Staff Loan OD:
# ODs arising out of Employee Resignation:

All Over-‐‐dues arising out of Employee Resignation should be adjusted from the Full and Final Settlement amount of the
Employee. The immediate supervisor of the resigned employee should cross check with the HR
payroll officer for any staff loan dues from the employee. If the amount recoverable is higher than the F
&F amount, the employee should be asked to clear the dues before processing the F&F amount. Until clearance of the outstanding loan
amount, relieving/experience letter should not be issued to the concerned employee.
# Female Employee on Maternity Leave:

If the employee who has availed staff loan is going on a maternity leave, it is the responsibility of
supervisor to intimate the respective Payroll Officer, Regional HR Manager & Regional collection
manager before the start date of maternity leave of the particular employee. Payroll officer upon
intimation should reschedule the Staff loan EMI of the particular employee for 3 months and intimate the respective
supervisor, RHR Manager and Regional collection manager.
# Employee Death:
In case of Employee death, the immediate supervisor of the deceased employee should cross
check with the respective HR payroll officer for any staff loan dues. In case of any dues found,
supervisor should intimate the respective HR payroll officer to adjust the outstanding loan amount from the Employee’s FFS or
collect o/s amount from the nominee while giving the Insurance cheque.
# Employee Termination/ Employee abscond/Employee Fraud/willful default by

Employee:
20.2.1. Steps of Recovery

# Recall/ Company Notice
• HR Team shall send Recall cum Company recovery notice to the employee

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immediately after the default for repaying the outstanding loan amount.
• In case the employee do not repay the amount within the given timeline, one more
notice should be sent to the employee within a gap of 15 days from the date of
first notice sent. The 2nd Notice sent should state that incase of non-‐‐repayment
within the given timeline; company will be forced to initiate legal action.
• HR Team shall also mark the letter to the Local Branch (Base Branch of the
Defaulted Staff to follow up) for employees in distribution department.
# Adjustment from Full & Final Settlement Amount or Refer to
Collections/Vigilance/Legal Wing
Following are the actionable in case of no response from the Employee to the notices sent:
• HR team shall adjust the outstanding loan amount from the Employee’s FFS
amount, in case amount is due to the employee.
• If the outstanding loan amount is greater than the F&F amount, the amount
available under F&F will be adjusted and case will be referred further to Collection
team for recovery of balance outstanding.
• In case of Employee Fraud, the F&F amount will be adjusted after adjusting the
fraud amount identified against the defaulted staff before recovery of the
outstanding loan amount.
# After 60 days from the date of default, Collections team shall visit Employee’s House for
collections
# If the Employee does not make payment even after House Visit, Recovery Notice shall be
sent through lawyer for payment of OD amount with the timeline of 7 days for employee
to respond.
# In case of no response from Employee within the given timeline, vigilance/collection team
shall intimate Regional HR Team to deposit Security cheques collected in the USFBL based
on the OD amount.
# In case of dishonour of security cheque for ‘insufficient funds’, Regional HR Team should
ensure to submit the dishonour Memo accompanying bounced Security Cheque to the
Regional Vigilance Manager within 21 days TAT.
# Regional Vigilance Manager shall proceed legally and ensure below actionable:
• Intimation to concerned supervisor and Regional HR Manager on cases decided for

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Case filing.
• Proceed legally for cases recommended by RFCM (Regional Fraud Control
Meeting).
• Retrieval of Employees loan documents within 7 working days from Regional HR
Team for case filing.
• If the employee is absconding, Vigilance should file legal suit against the guarantor
who has signed the Deed of Guarantee.
• Summarized version of Legal Cases to be discussed in RFCM.
HR Department shall not release the experience letter and relieving letter until the outstanding
loan amount is fully settled.
General Ledgers maintained for Staff Recoverable
20.3. Receivables from Staff

Any amount collected under the staff fraud committed which were not against any customer and
the recovery of late payments of staff loan and mobile advances will be credited into the “Receivables from Staff” Account.
21. DOCUMENT PRESERVATION

All physical records and documents related to collection functions will be preserved for 8 years
after it is created. Post 8 years it will be destroyed with a noting kept for it by NCM. All records &
documents stored electronically will be kept beyond 8 year. All call recordings has to be preserved
for 12 months by the call center, post which it would be written in a DVD and given to Ujjivan for
archival.
Collection documents in Micro finance loans

• Write off memo and supporting documents such as KYC, death certificate in case of
deceased clients.
• Postal proof of all notices sent to borrowers
• IC4 audit trial
• Suite filed accounts (Total proceeding with hearing documents & award copy)

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• Copy of Settlement letter

Collection documents in Housing and MSE
• Suite filed accounts (Total proceeding with hearing documents & award copy)
• Postal proof of all notices sent to borrowers
• Pre repo notice and post repot notice
• Repossession kit
• SARFAESI Panchnama document
• Mortgaged Asset Valuation document
• Pre-‐‐sale notice, post-‐ sale notice
• Newspaper advertisement
• Write off memo and supporting documents such as KYC, death certificate in case of
deceased clients.
• Copy of Settlement letter
22. PROVISIONING NORMS

Following provisioning Norms shall be applicable for Unsecured and secured loans. 23
Unsecured Loans
Asset classification Days past due GL IL MSE Unsecured Loans
Standard asset 0--‐ 07 days Min 0.65% Min 1% Min 1%
Standard asset 8--‐ 30 days 5% 5% 5%
Standard asset 31--‐ 60 days 30% 30% 30%
Standard asset 61--‐ 90 Days 50% 50% 50%
Substandard asset 91--‐ 180 days 80% 80% 80%
Substandard asset 181--‐360 Days 100% 100% 100%
Substandard asset >366 Days 100% 100% 100%
Rescheduled Loans 50% 50% 50% 50%
Total minimum Provisions on total portfolio 1% 2% 1.5%
Secured Loans
23
Please refer Ujjivan NPA Policy for details.

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Asset classification Days past due SHL SBL

Standard asset 0--‐ 07 days 1% 1%
Standard asset 61--‐ 90 Days 50% 50%
Substandard asset 91--‐ 180 days 80% 80%
Substandard asset 181--‐360 Days 100% 100%
Doubtful--‐1 366 - ‐545 days 100% 100%
Doubtful--‐1 546 - ‐720 days 100% 100%
Doubtful--‐1 721 - ‐970 days 100% 100%
Doubtful--‐2 971--‐1000 days 100% 100%
Loss Asset 1551 days+ 100% 100%
Rescheduled Loans 35% 35%
23. ANNEXURE 1: Abbreviations

No. Abbreviation Description
1 ACH Automated Clearing House

2 ACM Area Collection Manager
3 AO Authorized Officer
4 ARC Asset Reconstruction Company
5 CAP Corrective Action Plan
6 CBH Cluster Branch Head
7 CC Cash Credit
8 CEO Chief Executive Officer
9 CIBIL Credit Information Bureau (India) Limited
10 CMS Cash Management Services
11 CO Collections Officer
12 COM Collections Operation Manager
13 COP Central Operations
14 DCR Daily Collection Report
15 DOP Delegation of power
16 DPD Days past due
17 DRA Debt Recovery Agent
18 DRT & DRAT Debt Recovery Tribunal & Debt Recovery Appellate Tribunal
19 ECS Electronic clearing service
20 EMI Equated Monthly Installment
21 FI Financial Institutions
22 HO Head Office
23 IL Individual Lending
24 JLG Joint Liability Group
25 LAP Loan Against Property
26 LO Loan Officer
27 MOB Month on board
28 MSE Micro, Small Enterprise

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29 MSME Micro Small and Medium Enterprises

30 NBFC Non--‐Banking Financial Company
31 NCM National Collection Manager
32 NOC No--‐objection certificate
33 NPA Non--‐Performing Assets
34 OD Overdraft
35 OTS One Time Settlement
36 PDC Postdated cheques
37 POS Principal Outstanding
38 PTP Promise to pay
39 PP Post pones
40 RBI Reserve Bank of India
41 RCM Regional Collection Manager
42 RMCB Risk Management Committee of the Board
43 RO Relationship Officer
44 USFBL Ujjivan Small Finance Bank Ltd
45 SMA Special Mention Account
46 SMS Short message service
47 SPDC Security postdated cheque
24. ANNEXURE 2: References to Key RBI Circulars
No. Circular Issue Date

(i) Circular --‐ Guidance Note on Credit Risk Management September 20, 2001
Master Circular --‐ Prudential norms on Income Recognition, Asset
(ii) July 1, 2015
Classification and Provisioning pertaining to Advances
(iii) Master Circular on Wilful Defaulters July 1, 2015
(iv) Circular on Recovery Agents engaged by Banks April 24, 2008
Framework for Revitalizing Distressed Assets in the Economy –
(v) Guidelines on Joint Lenders’ Forum (JLF) and Corrective Action Plan February 26, 2014
(CAP)
Framework for Revival and Rehabilitation of Micro, Small and Medium
(vi) March 17, 2016
Enterprises (MSMEs)
Prudential Norms on Change in Ownership of Borrowing Entities
(vii) September 24, 2015
(Outside Strategic Debt Restructuring Scheme)
(viii) Guidelines on One--‐Time Settlement Scheme for SME Accounts September 3, 2005
Guidelines on Managing Risks and Code of Conduct in Outsourcing of

(ix) November 3, 2006
Financial Services by banks

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25. ANNEXURE 3: Notice Formats
ANNEXURE – A
GL --‐ 1st Reminder Notice

To,
__<Insert Customer Name>______________ Date < Insert Notice generated date>
<Insert Address line 1>_______________ Branch < Insert Branch ID& Name >
Customer ID < Insert Customer ID>
___ <Insert Address Line 2>______________
Loan Account No < Insert Account ID >
__<insert Sate and Pin code>_____________ Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
Current outstanding (Rs) < Insert loan outstanding>
Subject: Notice for payment of overdue amount
This is to bring to your notice that, your above said loan account is showing an overdue of Rs<Insert
Overdue Amount> from <insert Installment Due date>which is due and payable.
Please arrange to make payment of this account on or before <Insert deadline date>, if you cannot make
full
payment at this time, please contact us to make a payment which is mutually acceptable.
Please note that, we are required to share your credit history to Credit Bureau agencies authorized by the
RBI (Reserve Bank of India) and this may impact your ability to avail credit facilities from any other financial
institutions in future. We wish to hence inform you to pay the necessary dues in a timely manner in order
to maintain a clear credit history and enjoy benefits of other financial products.

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Your prompt attention to this matter would be greatly appreciated. If you have any queries regarding this
account, please contact our branch office nearest to your area.
If the payment has recently been made, please accept our acknowledgement and ignore this memo.
With regards,
Ujjivan Financial Services Ltd
Authorized Signatory
ANNEXURE – B
GL --‐ 2nd Reminder Notice
To,
Date < Insert Notice generated date>
__<Insert Customer Name>______________
Branch < Insert Branch ID& Name >
<Insert Address line 1>_______________ Customer ID < Insert Customer ID>
Sanctioned amount (Rs) < Insert Loan Amount sanctioned >
__<insert Sate and Pin code>_____________ Current outstanding (Rs) < Insert loan outstanding>

With reference to the letter dated <1ST Reminder notice date>this is to bring to your notice that,
your above said loan account is showing an overdue of Rs<Insert Overdue Amount>from <Insert Installment
Due date>which is due and payable

We are sorry to note that despite repeated requests, tele--‐calls and personal visits you have defaulted and
failed to repay the monthly installments on their respective due dates.

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Please arrange to make payment of this account on or before <Insert deadline date>, if you cannot make full
With regards,
ANNEXURE – C
GL --‐ Final Reminder Notice
To,
__<Insert Customer Name>______________ Branch < Insert Branch ID& Name >

With reference to our earlier reminders to settle the arrear amount of Rs<Insert Overdue
Amount>which was due to be paid on <insert Installment Due date>, remains unpaid despite of repeated
requests, tele--‐calls and personal visits.
We demand that the payment of the full amount should be made to us on or before <Insert deadline
date> .
In the event of non--‐settlement of outstanding, Ujjivan reserves the right to commence legal proceedings to
recover the debt without further notice to you, and you may be responsible for any associated legal fees or
collection costs.

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Please visit our branch office nearest to your area as a matter of urgency and settle your account before
the above date.
With regards,
ANNEXURE – D
SHL/IL/MSE --‐ 1st Reminder Notice
To,
___ <Insert Address Line 2>______________ Loan Account No < Insert Account ID >
__<insert Sate and Pin code>_____________

This is to bring to your notice that, your above said loan account is showing an overdue of Rs<Insert
Overdue Amount>from <insert Installment Due date>which is due and payable
Please note that due to delay in payment of monthly installment, it has attracted bounce charges and
other contractual charges, which add up to Rs<Insert OD Amount including Charges>. Please arrange to make
payment of this account on or before <Insert deadline date>, if you cannot make full payment at this
time, please contact us to make a payment which is mutually acceptable.

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With regards,
nd
ANNEXURE – E SHL/IL/MSE - ‐ 2
Reminder Notice
To,

With reference to the letter dated <1ST Reminder notice date>this is to bring to your notice that, your
above said loan account is showing an overdue of Rs<Insert Overdue Amount>from <insert Installment Due
date>which is due and payable
Please note that due to delay in payment of monthly installment, it has attracted bounce charges and
other contractual charges, which add up to Rs<Insert OD Amount including Charges>. Please arrange to make
payment of this account on or before <Insert deadline date>, if you cannot make full payment at this
time, please contact us to make a payment which is mutually acceptable.

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failed to repay the monthly installment on the due date.
With regards,
ANNEXURE – F
SHL/IL/MSE --‐ Final Reminder Notice
To,

Amount>which was due to be paid on <insert Installment Due date>,remains unpaid despite of repeated
We demand that the payment of the full amount should be made to us on or before <Insert deadline date>.

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collection costs.
Please visit our branch office nearest to your area as a matter of urgency and settle your account
before
the above date.
With regards,
ANNEXURE – G
SHL/IL/MSE --‐ Company Notice/Guarantor Notice
To,
__<Insert Guarantor Name>______________ Date < Insert Notice generated date>

<Insert Address line 1>_______________

Subject: Payment of remaining overdue amount of your guaranteed customer
Ujjivan hereby would like to bring to your notice that --‐ you have agreed to be the Guarantor
for
the loan taken by < Insert Customer Name>agreement dated < Insert Loan Disbursement Date>with your own

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interest and therefore, you are liable to repay the overdue amount of your guarantee as per the terms and
conditions signed by you prior. (Below is your guarantee’s loan detail)
With reference to the above subject, this letter is to inform you that your Guarantee’s Individual Loan
taken for the purpose < Insert Loan purpose> from Ujjivan Financial Services Ltd. is overdue from <insert
Installment Due date> to the extent of Rs.<Insert Overdue Amount>. The total outstanding balance of your
Guarantee’s loan is Rs.< Insert loan outstanding>. In this regard you are requested visit < Insert Branch ID&
Name
>Ujjivan branch office and pay the overdue amount before <Insert deadline date>, in one shot or in
installments. In the event of any further delay, we will be forced to inform any credit bureau, financial
institution or any agency authorized by the RBI (Reserve Bank of India) as per the loan agreement between
us.
Also failing to this we will be executing legal case against you as per the agreed terms and conditions in the
deed & guarantee signed and submitted by you.
With regards,
ANNEXURE – H
PRAGATHI LOAN --‐ 1st Reminder Notice
To,
<Insert Address line 1>_______________ Branch < Insert Branch ID& Name >
___ <Insert Address Line 2>______________ Customer ID < Insert Customer ID>

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This is to bring to your notice that, your above said loan account is showing an overdue of
<Insert Overdue Amount>from <insert Installment Due date>which is due and payable
full
With regards,
ANNEXURE – I
PRAGATHI LOAN --‐ 2nd Reminder Notice
To, Date < Insert Notice generated date>
<Insert Address line 1>_______________
___ <Insert Address Line 2>______________ Sanctioned amount (Rs) < Insert Loan Amount sanctioned >

Confidential
With reference to the letter dated <1ST Reminder notice date>this is to bring to your notice that, your
above said loan account is showing an overdue of Rs<Insert Overdue Amount>from <insert Installment Due
date>which is due and payable.
full
failed to repay the monthly installment on the due date.
With regards,
ANNEXURE – J
PRAGATHI LOAN --‐ Final Reminder Notice
To,


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Amount>which was due to be paid on <insert Installment Due date>,remains unpaid despite of repeated
We demand that the payment of the full amount should be made to us on or before <Insert deadline date>.
collection costs.
Please visit our branch office nearest to your area as a matter of urgency and settle your account
before
the above date.
With regards,
ANNEXURE -‐‐ K
LOAN RECALL NOTICE AT 90 DPD
(on Ujjivan letter head)
To,(Name and address of the customer)
Sub : Loan account number ………….

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Dear Sir/Madam
Inspite of repeated reminders you have failed to adhere to the terms and conditions expressly agreed
by you vide the Agreement entered between us for the said loan and you have failed to maintain the
financial discipline required of you with the said loan. Thus we are constrained to state as under:
That pursuant to the rights vested with Ujjivan Ltd, your entire loan (principal and interest) is being
recalled forthwith.
You are required to make payment the whole of the amount due and outstanding’s by you, under the said
Agreement, to us and amounting to Rs ………… within 7 days from the date of postage of this notice.
In case of non--‐payment by the aforesaid date, we will be constrained to take legal recourse against
you
entirely at your risk as to costs and consequences thereof.
No further notice will be given to you in this regard.
Thanking you,
For Ujjivan Financial Services Ltd.,
Authorized Signature
ANNEXURE – L
Possession cum sale notice of immovable property under mortgage under

SARFAESI Act 2002
Whereas

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The undersigned being the Authorized Officer of the Ujjivan under the Securitisation and Reconstruction of
the Financial Assets and Enforcement of Security Interest Act herein after termed as SARFAESI Act
2002 and in exercise of powers conferred under Section 13 (12) read with Rule 9 of the Security
Interest (Enforcement) Rules, 2002 issued demand notices on different dates calling upon the
borrowers / mortgagors of the secured interest as mentioned hereinafter to repay the amount mentioned
in the notice within 60 days from the date of receipt of the said notice. The borrower(s) / guarantor(s)/
Mortgagor(s)/ Legal Heir(s) having failed to repay the amount, the undersigned has taken possession of
the property described herein below in exercise of powers conferred under Section 13(4) of the said Act
read with Rule
9 on different dates and OFFERS are invited by the undersigned in sealed cover for purchase of immovable
properties on ‘‘AS IS WHERE IS BASIS’’ and ‘’AS IS WHAT IS BASIS’’ as per brief particulars given here under.
The borrower(s) / guarantor(s) / mortgagor(s) in particular and the public in general are hereby cautioned
not to deal with the property and any dealings with the property will be subject to the charge of
Ujjivan, undernoted Branches for an amount as mentioned against each account herein below and
interest thereon.
Sl Name of the Name of the Description of the charged/ mortgaged Amount O/S as Reserv
N Account & Borrower / property (All the part and parcel of on date of e Price
o. Branch Guarantor the property consisting of) Demand
Notice (Rs.) & (Amt.
(Owner of
Date of taking in
the property)
possession lacs)
LAST DATE & PLACE OF RECEIVING OFFERS : ………………
AT UJJIVAN, ………………………..
DATE & PLACE OF OPENING TENDERS: …………………………….
AT I UJJIVAN, …………………………..
Terms & Conditions:
1] Interested parties will send/submit their offers for purchase of the said property in sealed cover
super scribing as "Offer for Sale of Assets at --‐ (write the address of the asset) --‐ A/c. (write the name
of a/c. & Branch)" along with earnest money deposit equivalent to 10% (ten percent) of Reserve
Price of the property by Cheque/Demand Draft favoring the Authorized Officer, Ujjivan payable at
………, which is refundable, if the bid/tender is not accepted. Offer should reach us latest by the
………….. at the above mentioned address. Offers without earnest money deposit will summarily be rejected.
2] The successful bidder shall deposit 25% (Twenty--‐five percent) of the bid amount immediately by
Cheque/Demand Draft favoring the Authorized Officer, Ujjivan payable at ……, on the sale being
knocked down in his favor. In case, the successful bidder fails to deposit 25% of the bid amount immediately
on the
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sale being knocked down in his favor the entire deposit made by the bidder towards earnest money
shall
be forfeited without any notice and the property/ies shall forthwith be resold.
3] The balance amount of the purchase money shall be paid to the Authorized Officer, Ujjivan on or before
the 15th (fifteenth) day of confirmation of sale in default of payment within the said period, the entire
deposit made by the bidder together with the earnest money shall be forfeited without any notice and the
properties shall be resold.
4] The defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it will
be subsequently sold.
5] All such payments to be made only in the form of cash or Cheques or Demand Draft drawn in favor
of
the Authorized Office, Ujjivan.
6] The successful bidder would bear the charges/fees payable for conveyance such as stamp duty.
Registration fees etc. as applicable as per law.
7] The Authorized Officer will not be responsible for any charge, lien, encumbrance, property tax or
any
other dues to the Govt. or anybody in respect of the property under sale.
8] The Authorized Officer has the absolute right to accept or reject any tender/bid or adjourn/postpone the
sale without assigning any reason therefor.
9] The sale is subject to confirmation by the Ujjivan.
10] For Inspection of the property, the intending bidders will contact Ujjivan, …………..during office
hours,
latest by …………..
This publication is also a notice of possession cum sale under the above Act to
borrowers/guarantors/mortgagers/owners of the property as mentioned above.
Date : ……
Authorized Officer, Ujjivan
Place: ……….
26. ANNEXURE 4: IC 4 Workflows with OD reasons

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Detailed WF.xlsx
Standard Reasons and Remarks for all products in IC4

STD CAT SUB
SL NO. STD CATEGORY DEFINITION
CODE CATEGORY
Deceased Deceased customer and intimation sent to
Customer Insurance Team
1 DEC DECEASED
Deceased Deceased customer's spouse and intimation
Spouse sent to Insurance Team
Customer or whole family left the City/village,
new address unknown to group
2 ABS ABSCOND Absconded
members/neighbors and customer not
traceable
Business Loss/ Customer or Spouse facing short term
Temporary financial problems in business/Sudden cash
Loss needs/Slowdown in business (Seasonality)
This category is for only livestock cases where
Cattle Death customer is facing financial problems due to
cattle death.
Customer/Earning Member has lost his/her
Job Loss Job. They do not have any other source for
repayment
Medical
Permanent disability or serious illness of an
reasons --‐
earning member/Customer
Permanent
FINANCIAL Medical Illness of a family member/Customer and
3 FIN
DISTRESS reasons --‐ Sudden cash needs leading to diversion of
Temporary funds
Other family Death in the family and unable to pay on
member death time.
Part Salary Customer/Earning Member have received
received part salary
Salary not Customer/Earning member have not received
received their due wages/salary
Customer taken loans from other financiers
Multiple
and is unable to pay her emi due to
Borrower
indebtedness
Untimely repayments being made by the
Irregular Payer
borrower

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Local area/ Ring leader influencing borrowers

Ring leader
not to repay the EMIs in an particular
Influence
center/area
Community Religious heads, Communal Organizations
issues --‐ and Local Government Administration have
External instructed not to repay the loan
Local or Government Administration has
MASS Demolition ordered demolition of the whole area or a
4 MSD
DEFAULT part of the area
Political parties or person interrupting into
Political issue the particular area/Group/members for giving
false statement to stop the repayment.
Default caused due to Flood, Draught, earth
Natural quake etc. and epidemic diseases (rapid
Calamities spread of infectious diseases in an large
population in particular area)
Where a customer avails loans by submitting
another individual’s documents and/or by
Ghost/Benami
way of misrepresentation of facts/Dummy
Loan
loans created where in the borrower does not
5 SBL SUB LENDING exist
Whole or part of the loan amount has been
Sub Lending given by the borrower to another member or
to a third party often referred to as ‘ring
leader’ usually on payment of a commission.
Concerned branch staff are not responding to
Service/ customer queries or have miscommunicated
6 SRI SERVICE ISSUE
Behavior issues product features/ made false commitments.
Staff has misbehaved during collections
Defaults may occur due to fraud committed
by Ujjivan staff which may include
misappropriation of customer’s money,
taking loans from customers, creating
7 STF STAFF FRAUD Staff fraud
phantom loans and collecting excess fees /
charges from customers or collecting
repayments ahead of the due dates & not
accounting the same
Exact repayments are not updated to the
right customer’s account/CMD Change/Loan
TECHNICAL Technical
8 TCI card Repayment Date mismatch/Wrong
REASON reasons
repayment schedule/ECS or ACH status not
received etc.

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Temporarily Customer is not available during visit/door

TEMPORARILY
not Locked/Not reachable or is not receiving the
9 TNC NOT
contactable call
CONTACTABLE
House Shifted Shifted House to nearby area
Customer has ability to repay but has no
intention or commitment to repay. Customer
WILFUL WILLFUL
10 WLD who does not pay for >60 Days in GL will be
DEFAULT DEFAULT
classified as a willful defaulter & field
collections will take over collections
Criminal Case initiation for IL customer with
Initiate 138
cheque
11 LGL LEGAL
Civil cases initiation for GL and IL customer
Initiate Civil
where cheques are not available
26.1. ANNEXURE 5: IC4 Auto Report formats

Collection Policy Ujjivan

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Collection Policy

Corporate office Address:

Grape Garden, No. 27, 3rd A Cross, 18th Main

Policy Approval Committee

Effective Date Feb 01, 2017

Collection Policy February 2017 Page 2

Collection Policy February 2017 Page 3

4.6. Field Visit Strategy (> 30 DPD)....................................................................................................32

Collection Policy February 2017 Page 4

9.1. Identification of mass default cases ...........................................................................................67

Collection Policy February 2017 Page 5

20.3. Receivables from Staff............................................................................................................87

Collection Policy February 2017 Page 6

1.1. Scope Objectives and Principle

Collection Policy February 2017 Page 7

1.2. Guiding Principles of Collection: Code of Conduct

Collection Policy February 2017 Page 8

Collection Policy February 2017 Page 9

1.3. Collection Dos and Don’ts

Collection Policy February 2017 Page 10

Collection Policy February 2017 Page 11

1.4. Policy Review & Approval process

Collection Policy February 2017 Page 12

Head Credit and

Telecalling Team lead Regional collecdon Collecdon Operatons

Telecallers Area Manager -‐‐

1.6. Product Segment

Joint Liability Group (JLG) loans Housing Loans

Individual Business Loans Loan Against Property (LAP)

Individual Livestock Loans Secured Business Loans

Collection Policy February 2017 Page 13

Agriculture Loans Enterprise business Loans

Individual Home Improvement Loans (HIL)

Individual Higher Education Loans

2. MICRO FINANCE--‐ GROUP LENDING

2.1. Identifying Overdue

2.2. Broad Default Classification:

Type of Default Action Plan Person Responsible

Collection Policy February 2017 Page 14

Type of Default Action Plan Person Responsible

Collection Policy February 2017 Page 15

Type of Default Action Plan Person Responsible

2.3. Managing Client and Spouse demise cases

the loan amount with Ujjivan.

Collection Policy February 2017 Page 16

If the customer wishes to continue her loan

If the customer wishes to settle her loan through insurance settlement

Collection Policy February 2017 Page 17

2.4. Collection strategy

Collection Policy February 2017 Page 18

2.5. Dunning strategy

3. MICRO FINANCE --‐ INDIVIDUAL LENDING

Collection Policy February 2017 Page 19

3.1. Type of defaults:

Type of Default Action Plan Person Responsible

Collection Policy February 2017 Page 20

Collection Policy February 2017 Page 21

3.2. Collection strategy:

3.3. Bucket wise collection strategy

Collection Policy February 2017 Page 22

consultation with National manager-‐‐ collection and recovery.

to the customer. Collection

3.4. SMS Strategy