Tangy Tamarind is an upmarket Mumbai restaurant. A few weeks ago, its diners were taken aback when a raucous group descended on the restaurant with banners charging the proprietor to be a bank defaulter.
They were in a ‘collection’ effort, spearheaded by a young woman who ensured that diners were not disturbed except to inform them of the need for its action. A video camera continuously captured the entire proceedings. The restaurant staff watched helplessly while the management seemed to have vanished.
As for the diners, most of them were amused and intrigued by the drama unfolding before them.
The recovery group remained at their post long after the last diners had left and promised to return the next day. I learn from bankers that a second enactment wasn’t necessary. The company management wisely weighed the potential damage and turned up at the bank to discuss repayment.
Interestingly, repayment was due from another firm owned by the same proprietor. But the recovery team traced the connection and realised that a plush restaurant was a softer target to embarrass the owners into paying up.
After the passing of the Sarfesi Act (Securitisation of Assets and Reconstruction of Financial Assets and Enforcement of Security Act, 2002), banks indeed find it a lot easier to act against defaulters, but they still need effective recovery agencies to bring defaulters to the negotiating table.
Recovery agencies always conjure an image of foul-mouthed toughies who threaten and harass individuals into paying up. According to a media report, an agent hired by Citibank even demanded a human kidney in lieu of payment.
What’s worse, there are too many reports of careless identification, wrongful intimidation or use of strong-arm tactics when the bank itself is in the wrong. Given this background, I was intrigued at a young woman heading the recovery business, especially since her method seemed different from the usual gang of goons that handle this business.
One banker, who refused to be identified, told me that the recovery company was indeed headed by a ‘college-going girl’ named Manju Bhatia who had moved to Mumbai after establishing a recovery business at Indore. ‘‘When she came here to introduce the firm and ask for business, I initially told her to get lost. But she was persistent. She insisted that we give her at least one small case and evaluate her firm. They had done fairly well for our bank in Indore so I decided to give them a try and we are happy with the results.’’
I contacted Bhatia and was even more intrigued at the young woman who sounded like the sharp, ambitious, small town Babli (of Bunty and Babli), who was determined to operate on the other side of the fence — a recovery agent rather than a conwoman.
Smart and cautious Bhatia confirmed that she heads the recovery operations of a company called ‘Adhikrut Jabti Evam Vasuli’ (translated, it means official seizure and recovery agency) co-owned by a colleague Parag Shah. It has operations in Indore, Jaipur, Rajkot, Chhatisgarh and Mumbai.
Bhatia is at pains to convince me that their work is entirely transparent and above board and hence effective.
The company’s website (http://www.vasuli.com/) underlines this effort and would indeed put many listed companies to shame in terms of transparency and disclosures.
Its list of clients (including 20 top nationalised and cooperative banks) is backed by appointment and commendation letters. There is a detailed description of services offered (investigation, survey, custody, security, valuation and sale of assets etc), which is accompanied by a list of ‘duties’ and an explicit fee structure.
The most interesting aspect of the website was its elaborate ‘code of conduct’ and specific guidelines to be followed in its recovery effort.
As Bhatia tells me, the key to their way of doing business is the process they follow. She has a whole checklist of tasks that precede a ‘Tangy Tamarind’ type of operation to embarrass a defaulter. The first step: ‘‘I research to check the ability to pay and other businesses.’’
In this case, they hit on the profitable restaurant business. Secondly, she writes to the company and asks them to pay up. When that fails an operation is planned. This involves informing the local police station and requesting that a constable accompany the recovery team.
The building society is notified of the action and defaulter is also given the exact date and time when the recovery team would arrive for collection. This is aimed at providing plenty of opportunity for a person to avoid embarrassment and at least start a negotiation with the bank.
As a further precaution, the actual operation is video-recorded and made available to the bank to avoid any charge of misbehaviour against the recovery team.
Interestingly, Bhatia says being a woman is sometimes an advantage in her business because it is difficult for people to accuse her of being rough and abusive. That is probably why Adhikrut Jabti has several women in key positions and at its offices in Mumbai, Indore.
Another aspect of this unusual recovery firm is the sophisticated code of conduct prescribed for its employees and posted on its website. It promises ‘‘dignity and respect to customers’’ and a debt collection policy that is not ‘‘unduly coercive in collection of dues’’ but ‘‘built on courtesy, fair-treatment and persuasion’’. It also promises ‘‘fairness and transparency in repossession, valuation and realisation of security’’.
Finally, the website had a detailed list of recovery actions, broken down into value and products recovered. The bulk of its recoveries around the country appear to be seizure of tractors, vehicles or sums running into a few lakh rupees.
What does all this add up to?
I reckon that Adhikrut Jabti is a fledgling recovery agency that is still in the process of establishing itself, but operates with an unusually refined approach and strategy that is aimed at rapid and non-controversial growth. Although the track record is too sketchy to judge the success of its strategy, bankers seem happy that it is clearly a better approach to tackling wilful defaulters.