The State Bank of India is adopting a new method to ensure timely repayments, by greeting potential defaulters with a pack of chocolates, the bank said. The country’s largest lender stated that borrowers who are planning to default generally don’t answer reminder calls from the bank. So, the best way is to catch them by surprise at their homes, it said.


This new method has been adopted by the bank with the aim of boosting their collections, as retail lending along with delinquency levels on account of increasing interest rates have been on the rise. 


The lender’s retail loan book has grown by more than 16.46 per cent to Rs 12,04,276 crore in the June 2023 quarter, up from Rs 10,34,111 crore in the same period a year earlier. This segment has become the largest asset class for SBI, whose total book stood at Rs 33,03,731 crore in the period, growing by 13.9 per cent on a year-on-year (YoY) basis. Further, the whole system has seen a loan growth of about 16 per cent, led by retail loans primarily, reported PTI.


“With two fintechs that 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. 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,” explained Ashwini Kumar Tewari, managing director in charge of risk compliance and stressed assets at the bank.


Tewari further elaborated that this method of carrying a pack of chocolates on a personal visit to the borrowers has been adopted as it has been found that potential defaulters avoid any reminder calls from the bank. “So the best way is to meet them at their own homes unannounced and surprise them. And so far, the success rate has been overwhelming,” noted Tewari.


The bank official didn’t disclose the names of the fintechs stating that the method was adopted just 15 days ago and is still in it’s pilot stage. Tewari stated that if successful, the bank will formally announce the development. He added, “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, he said, adding, we want to continue the pilot for at least four to five months.”


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