Improve your business finances with the Help of Hard Bucket Collections

Posted by Christian Silmaro on January 16th, 2018

Present market in any field is highly competitive and every retail banking set up, or every financial institution is targeting to grow high in business by achieving new customers, and at the same time, retaining those of existing customers. They want to develop their business and want to increase market share. The financial organizations require control over the rising delinquency with a target to raise their profits or banks will go down in a condition that had people experienced in 2008-09. The same type of competition is going on in the market; the only difference is there are more players in the market as we had seen ten years ago.

Hard Bucket Collection in Financial Institution

 Financial Institutions are also trying to rise up the strong collection mechanism to handle the bad accounts. The outlook of the collection procedure has taken a new shape and has changed drastically. In the last decade, the outlook of the collection was different, such as threatening, or showing power, etc. As a result, we had faced many undesirable incidents, had come across many incidents which we used to follow in last decade mainly collection by giving threat, showing power etc. In the past the managers of financial institutions were arrested for giving threat, misbehave, showing power etc. Thereafter the financial institutions had introduced Hard Bucket Collections, to cover up the bad debts.

Presently, the big financial institutions are following the right way of collection mechanism which has proved to be very effective, though few processes can take the longest time to recover the money. Institution follows a different collection process depending upon the category of the delinquent customers.

How the agencies solve the problems of recovery?

The agency, in the beginning, tries to understand how the institution categorized the delinquent customers. All bad customers are categorized according to their bucket or debt, such as 1-30, 31-60, 61-90 and so on. The number is mentioned here as the days past and the delinquent customers are recurring the due, means how many days are delayed from the schedule due date of interest payment or Equated Monthly Instalment (EMI) Payment.

Regular follow up required in hard bucket collections

 Regular follow up is very important in Hard Bucket Collections, so that the delinquent customers cannot overlook the payment policy. If they still do not pay the debt the collection agent or the financial institution can go into legal proceedings against the default customer.