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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Cong should take blame if allies feel INDIA bloc is disintegrating: Sena (UBT) MP Sanjay Raut
Mumbai, Jan 10: Shiv Sena (UBT) leader Sanjay Raut on Friday said it was the responsibility of the Congress to keep the INDIA bloc intact as it was the largest party in the opposition alliance.
Raut's statement came in the backdrop of Jammu and Kashmir Chief Minister Omar Abdullah's remarks expressing dismay over the lack of clarity on INDIA bloc leadership and agenda, and saying the alliance should be wound up if it was meant only for the 2024 parliamentary elections.
"If the alliance partners feel the INDIA bloc was only for the Lok Sabha polls and doesn't exist now, the Congress is to be blamed (for this situation). There has been no communication, dialogue (among constituents). We fought the Lok Sabha elections (together) and got good results. There should have been a meeting (of INDIA) to chalk out future plans and it was the Congress' responsibility to take initiative in this regard," he asserted.
Lack of communication among partners in the anti-BJP grouping is giving an impression that all is not well in the bloc which has more than two dozen parties, emphasised the Rajya Sabha MP.
"There is no communication, dialogue, discussion (among allies). This means there is confusion in the minds of all whether every thing is fine within the alliance," he noted.
Raut warned that if the alliance, which took shape before the 2024 parliamentary polls, breaks, it cannot be revived.
"If the alliance was only for the Lok Sabha polls, then declare the INDIA bloc doesn't exist anymore. (In that case), all the allies are free to chose their own path," the Shiv Sena (UBT) leader maintained.
"The INDIA bloc was formed for the Lok Sabha polls. But the Congress should take responsibility to keep everyone together. We need to correct past mistakes. Dissolving the opposition grouping will be an extreme step," Raut cautioned.
Raut said even at the time of Maharashtra assembly polls in November last year, the Congress central leadership did not intervene when its state unit was driving hard bargaining during seat-sharing talks.
"There were several assembly seats where the NCP (SP) and the Shiv Sena (UBT) had good candidates, but the Congress did not give up claim on those seats. Instead of one-upmanship, we could have carefully concluded seat-sharing deal as a united MVA," he said.
The Maha Vikas Aghadi (MVA), a state-level alliance of opposition parties, consists of the NCP (SP), the Shiv Sena (UBT) and the Congress. The MVA performed poorly in the November assembly polls winning just 46 seats in the 288-member House.
Raut emphasised that like the INDIA alliance at the national level, there was no coordination among the MVA constituents as well in Maharashtra.
The Rajya Sabha member clarified he does not agree with some Congress leaders calling Aam Aadmi Party (AAP) convener Arvind Kejriwal "anti-national".
The Congress or the BJP will not win the February 5 assembly polls in Delhi. It will be the ruling AAP that will emerge victorious, he claimed.
The Congress and the AAP, both INDIA bloc members, are contesting the Delhi polls separately.
"It would have bee good if the AAP and the Congress were together it would have been good. We are in a dilemma ...both parties (Congress and AAP) needed to maintain balance. We have not yet finalized our stand on the Delhi polls," he said.
Maharashtra Congress leader Nitin Raut said MVA allies squabbled over CM post before polls and took a lot of time to finalize seat-sharing in the state for the November polls.
"We ignored organisational planning (after Lok Sabha polls) and preparation for (Maharashtra) assembly polls," he said.
Another Congress leader Vijay Wadettiwar agreed with Nitin Raut and wondered if there was a conspiracy to delay the seat-sharing talks among the MVA partners.
"We wasted 20 days and lost crucial time for campaigning. Nana Patole (state Congress chief) and Sanjay Raut were the main leaders (involved in seat-sharing). We were also there. Leaders didn't come on time for talks and time was wasted," he said.
NCP (SP) leader Jitendra Awhad agreed there was a lack of coordination in the MVA.
"Wadettiwar has retained his bungalow he got as the then Leader of Opposition (in last assembly). Call a meeting. I will come ..let's discuss within ourselves rather than speaking in the media," Awhad said.
Sena (UBT) leader Sanjay Raut said Wadettiwar was very much part of the seat-sharing talks. "The Congress could have let go some seats where the allies had good candidates," Sanjay Raut said.
Talking to reporters in Jammu on Thursday, Omar Abdullah said the AAP, the Congress, and other political parties on the ground will decide how to effectively compete with the BJP.
"After the assembly elections in Delhi, they should call all the alliance members for a meeting. If this alliance (INDIA) was only for the parliamentary elections, it should be wound up, and we will work separately. But if it is meant for assembly elections as well, we will have to sit together and work collectively," the CM said.
The National Conference (NC) leader, whose party is a member of the national-level opposition grouping, was replying to a question about an RJD leader's statement that the INDIA bloc was meant only for Lok Sabha elections.
However, Omar Abdullah's father Farooq Abdullah, who heads the NC, took a different stand and asserted the INDIA bloc was a permanent political entity.
