Demand for recovery agents soars as banks face rising unsecured loan stress: Report
As stress rises in banks' retail lending business, particularly in unsecured loans, there is growing demand for collection and recovery agents. Additionally, banks are increasingly deploying sales staff for recovery efforts. These activities are largely outsourced by commercial banks.
According to data from TeamLease Services, as cited by Business Standard, the total number of outsourced staff in the BFSI (banking, financial services, and insurance) sector, as of July 2024, was 77,000, with 6,000 serving as recovery agents. By December 2024, the number of recovery agents had increased by nearly 50 percent, with the total outsourced staff rising to 82,000, of which 8,800 were recovery agents.
Krishnendu Chatterjee, vice-president and business head, TeamLease Services, highlighted that unsecured loans have gone up, and the resultant delinquency rates have also increased, due to which demand for collection profiles in the retail lending space, specifically unsecured loans like credit cards and personal loans, has increased in the past six months. “Some of our clients, who have been asking us for sales-related roles, are now showing interest in collection roles,” he was quoted as saying by the news outlet.
In its annual report, Trends and Progress of Banking in India 2023-24, the Reserve Bank of India (RBI) expressed concerns over the rise in delinquency and leverage in unsecured loans, urging greater vigilance. The share of unsecured loans in the total credit given by scheduled commercial banks had steadily increased since March 2015, reaching 25.5 percent by March 2023, before slightly easing to 25.3 percent a year later.
An official from a private sector bank told Business Standard that there has been a significant rise in demand for collection (recovery) agents over the past six months, as the credit environment has become more challenging for unsecured segments such as consumer durables, personal loans, and credit cards. The demand for these agents is high in urban areas.
Karthik Srinivasan, senior vice-president and group head, Financial Sector Ratings at ICRA noted that retail lending by banks and NBFCs has slowed due to an increase in delinquencies. He highlighted that the focus has shifted to collections, with many banks and NBFCs either strengthening their collection teams or leveraging technology to target specific delinquent borrowers.
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Dalit youngster in Raichur denied entry into temple: Video viral
Police, priest, Dalit leaders ‘unaware of matter’
Raichur: The priest of the Ambabhavani Temple in Athkur village has been accused of stopping Dalit youngsters from entering the temple for a ritual related the Navaratri festival, although related parties, including the priest and Dalit leaders of the village, have denied knowledge about the incident.
A video of the youngsters, belonging to the Madiga community, who wanted to wear the ritual garlands for the festive period, being denied entry into the temple and the priest handing them the garlands keeping them outside the threshold has gone viral on social media platforms.
Yapaladinni Police officers, however, have said no police complaint about the matter has been filed so far. In addition, Dalit leaders in Athkur have said no such incident has occurred in the village, but the police officers are conducting an inquiry since youngsters have alleged that they were denied entry into the temple.
The temple priest has also refuted the charges against him, clarifying that action will be taken if a complaint is filed.
