State Bank of India, India’s largest lender has come up with an innovative way to ensure timely repayment of loans, by greeting potential defaulters with a pack of chocolates, the bank said.
According to the bank, the borrowers who are planning to default do not respond to reminder calls from the bank. It said that the best way is to catch them up by surprise at their homes with a pack of chocolates.
The move by the country’s largest lender comes amid rising retail lending as well as rising delinquency levels on the back of the upward movement in interest rates.
The bank with this move intends to encourage borrowers, especially retail borrowers to make timely repayments.
SBI’s retail loan book increased by 16.46 per cent to Rs 12,04,279 crore in the June 2023 quarter from Rs 10,34,111 crore the previous year, making it the lender’s largest asset class.
“With two fintechs which use artificial intelligence, we are piloting a novel way of reminding our retail borrowers of their repayment obligations. While one is doing conciliation with borrowers, the other is alerting us on the propensity of a borrower to default,” Ashwini Kumar Tewari, managing director in charge of risk, compliance and stressed assets at SBI said, as quoted by PTI.
“And to such borrowers who are likely to default, the representatives from this fintech will visit them, carrying a pack of chocolates for each of them, and remind them of the forthcoming EMIs,” Tewari further said.
Tewari further emphasised that the method of carrying a pack of chocolates on a personal visit to the borrowers has been adopted and added that success rate of the decision has been overwhelming.
However, the bank did not reveal the identities of the fintechs saying that the method was adopted just 15 days ago and is still at the pilot stage.
“We are also talking to a few other fintechs to improve our collection efficiencies and hopefully by the end of the year, we will have formally tied up with at least half of them,” Tewari said, adding, “we want to continue the pilot for at least four to five months.”
