An LMS In Banking Software Trains BFSI Employees About Loan Recovery

What Must Employees Know About Loan Recovery?

An LMS is an important need of companies because it helps them to disburse useful knowledge to employees. Companies can ensure that their investment in an LMS is of complete use and they don’t have to invest elsewhere. When an LMS has a video conferencing tool in it, a company can easily conduct webinars for banking employees.

The lenders are competing with so many institutions these days. Hence, they are becoming dependent on LMS in banking to train employees for effective and legally compliant services. The financial institutions can ensure that they provide customers with expedited loan processing services through loan origination software (LOS).

They also save costs that are incurred due to banking professionals spending extra man-hours in dealing with loan applications.

Faster Processing Of Loan Applications 

Such loan origination software has different modules for processing various kinds of loan applications, such as agricultural loans, medium, and small enterprises’ loans, etc. The banking executives get so much help in handling loan procedures, such as adding collateral for the loan and changes in the loan interest payments once such rates change. This software sends automatic emails to borrowers of the bank depending on the rules, including how to make loan recoveries.

RBI’s latest guidelines for loan recovery state that the rights of the borrower need to be protected. Depending on the reason why the borrower defaulted, the loan recovery process against them is started by the lender. If the borrower is unable to make the loan repayment due to the pandemic, they can be shown some leniency. For example, they can be given a loan moratorium where they are exempted from making their EMI repayments.

RBI Guidelines For Loan Recovery 

Banks can’t also initiate extreme steps against loan defaulters. If a borrower is facing some problems in loan recovery due to the conditions imposed by the bank, then the former has the right to file a complaint against the latter. Unless and until the borrower’s complaint against the lender has been resolved, the banks can’t rehire a recovery agent. The banks have to make sure that the complaint has been answered within a month since it has been filed. So, a banking executive is made aware of such rules by the LMS in banking.

For example, a banking executive could be sent emails by the loan origination software about a defaulting customer on the date when EMI payment was due. However, the officer has to make sure that the recovery agents follow some guidelines and don’t use intimidating language on the calls made to borrowers. Also, the BFSI industry officers must make sure that the calls of the recovery agents are recorded. In case a customer makes a complaint about such a recovery agent, a bank has to act on them within 30 days by listening to the agent’s calls. If no action is taken by the lender during this time, the borrower has a right to go to the banking ombudsman. During these 30 days, if the borrower is still getting threatening phone calls from the recovery agent, they can register a complaint with the nearest police station.

Banks also have a responsibility of providing borrowers with the details of the recovery agents once they have been delegated the duty of recovery to them. When a recovery agent is visiting the home of a borrower, they should have the bank’s authorization letter with them, along with their identity card. They should also have a notice that the designated customer has defaulted on the loan.

So, BFSI employees can be given cognizance of such rules by LMS in banking.

Digitalization Of Loan Recovery 

A loan origination software can be taught well to the banking employees through the LMS in banking. This is because the former software makes the process of debt collection quite easier. Through a LOS, which is integrated with features such as location tracking, a banking officer can easily find out where a delinquent customer is. They can also initiate soft calls through the software and keep a record of them. The recovery agents can be trained through such software on how to converse with such customers on calls. The recovery agent should also be taught about respecting a customer’s privacy, like when to call them.

Such software also has a mobile device management suite, through which the agent’s calls to the customers are recorded and stored. As soon as a customer faults on an EMI payment, a recovery agent is allocated to them by the loan origination software. Sometimes, customers also present banks with post-dated cheques, and a LOS makes sure that there is a track on them whether they bounce or encash.

The software automatically starts tracking the nonperforming assets (NPA) of the banks, i.e., loans of defaulter customers. Hence, banks can have an easier debt recollection process through an LMS in banking.