Two recent Press Releases by Kotak Mahindra Bank caught my attention.
Press Release 01) Missed
an EMI Payment on Your Kotak Loan? Now, Simply Pay Your Overdue EMI Through
Your Preferred Payment App @ https://www.kotak.com/content/dam/Kotak/about-us/media-press-releases/2021/media-release-kotak-overdue-loan-repayments-on-payment-apps-742021.pdf
Press Release 02) A Simple
but Powerful Message – Kotak Home Loans @ 6.65% p.a. Kotak Launches Multi-media
Campaign on its ‘Unbelievably Low’ Home Loan Rate @ https://www.kotak.com/content/dam/Kotak/about-us/media-press-releases/2021/media-release-hl-campaign-6-65.pdf
Press Release 02 focuses on
Loan disbursements, Press Release 01 focuses on recovery of Loan overdues.
Both the activities are bread and butter for any lending
financial institution. Both are interlinked for the continuous growth of a lending
financial institution.
BBPS has revolutionised the way for collection of Loan
EMIs including overdue EMIs.
There are few parallels for BBPS in
other countries. In majority of the countries there is a fragmented approach
for collection of loan EMIs.
The benefits of BBPS are many and it
is very welcome that the numbers of the Billers on the BBPS platform is on the
increase.
Q: Why the Press Release 01 is important?
Kotak Mahindra Bank has real-time integration between
BBPS and its Loans module. What the BBPS displays as Amount Due for a
particular loan, is the real-time amount. There is no time lag i.e Start of Day
balance, or 1-day old balance, or holidays not calculated etc.
This is a great innovation that drastically reduces
customer friction. 100 % assurance for customers, that only the correct
overdues are being repaid.
Customers can choose to pay the full displayed due
amounts or part amount. There is no necessity that only the full due amount has
to be paid.
This reduces the pressure on the loan borrowers to pay
the full amount. The borrower can repay in small amounts as and when required.
The payments made via the BBPS channel will reflect in real
time in the respective loan accounts.
This means repayments made on holidays and after banking
hours will reflect immediately in the loan account. The issue of delayed
accounting is history now.
BBPS channel is open 24*7, 365 days a year.
Quote
Details of any EMIs that
are past the due date will be displayed and the payment will reflect in the
customer’s loan account on
a real-time basis.
This repayment facility is
available on all KMBL terms loans such as Personal Loan, Home Loan,
Consumer Durable Loan,
Business Loan, Gold Loan, Loan against Property as well as Commercial
Vehicle Loan, Tractor
Finance Loan, Construction Equipment Loan etc.
Unquote
At present, Kotak Mahindra Bank offers a real-time facility
for overdue EMIs only and not for regular EMIs. Lots more system integration is
required for a real-time facility for regular EMIs.
A start is made, and the
day is not far off when there will be a real-time facility for regular EMIs. This
will be another game-changer for the loan recovery process in India.
Q:
What are overdue loans?
Ans:
Overdue loans are loans in which borrowers have missed to repay a particular
EMI.
Q: What is the traditional collection process of overdue loans?
Ans: NACH(Debit), NEFT,
Cash, 3rd party aggregators
Q: What are the drawbacks
of the traditional collection process of overdue loans?
Ans: DB 01) High
collection costs
DB 02) Delayed reflection of
repayment in the loan account
DB
03) Difficult to see the total missed EMIs amount
DB 04) Difficult to repay
part amounts
DB 05) Difficulty in interpreting
narration in customer’s accounts at a later date
The BBPS channel can be deployed
for collection of overdues in the following loan segments i.e Home Loans &
LAP, PL, BL, and Consumer Durables, Credit Cards, CV/CE, Agriculture Division
and Tractor Finance
Disclaimer: These are my
personal views only. The bottom line is Mission #LessCashNotCashLess. Nothing More
- Nothing Less
Reference Articles:
https://www.bharatbillpay.com/ - Pay
anytime and from anywhere
This Bank
Allows EMI Payment Via Google Pay, PhonePe, Paytm Wallets: How Will This Work?
NPCI’s Bharat
BillPay, en route to a billion transactions, is set to be the next payments
disruption
1 comment:
I appreciate your dedication to providing a well-crafted and informative blog post, and I look forward to reading more of your work in the future. Your writing style is easy to understand and engaging, and for anyone who is tired of working with outdated banking solutions, Finacus is the clear answer. I highly recommend it to anyone in search of a secure and user-friendly banking solution.
Post a Comment