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Collections Flow for Missed Payments

Step 1: Reminder Communication (Day 1 - Day 2 post Due Date)
Action:
  • Collection agents to call the borrower with a friendly tone to remind them of the missed payment and request immediate repayment.
  • Understand the reason for non-payment and capture the response in the Loan Origination System (LOS).
Important:
  • Share digital payment links to facilitate instant repayment.
  • Offer a one-time grace period of up to 2–3 days if a genuine reason is provided.
Step 2: Personal Visit Attempt + Reference Calling (Day 3 - Day 5 post Due Date)
Action:
  • Field collection agents to visit the borrower’s office or residential address.
  • Discuss payment obligations and clearly explain the consequences of continued non-payment.
  • Contact borrower’s provided references (family members, friends, or office contacts) politely to inform about the overdue payment.
  • Reiterate the need for immediate repayment to avoid further escalation.
Objective:
  • Collect the overdue payment or secure a signed commitment letter for payment within 3 days.
  • Encourage timely repayments through responsible social engagement, ensuring professionalism and strict adherence to data privacy norms.
Step 3: Notice of Default (Day 6 - Day 9 post Due Date)
Action:
  • Issue a formal Notice of Default via registered email, SMS, and/or postal communication.
  • Send an official recovery email from the company’s authorized recovery email ID to the borrower’s official email ID.
  • Highlight applicable penal charges, potential legal recovery actions, and credit bureau reporting consequences.
Step 4: Legal & Recovery Escalation (Post 90 Days of Due Date)
Action:
  • If no positive response is received even after 90 days from the due date, escalate the case to the Legal Team.
  • Initiate legal notices and recovery proceedings as per policy guidelines.
Also:

Mark the account as delinquent in the Credit Bureau Reporting.

Additional Notes
  • Late Payment Interest: 2% Penal Charges, calculated on a daily basis.
  • Credit Bureau Reporting: Ensure reporting of non-payment within 15 calendar days from the due date.
  • Special Cases: In the event of the borrower’s death or verified financial distress, initiate a settlement process instead of standard recovery actions.
In event of a default beyond 10 days , there shall be multiple attempts to connect with customer through phone, physical visit to recorded addresses and by contacting references.  The Threshold days of start of each event in collection effort is mentioned above in  detailed matrix.