THE MAJOR LENDER IN THE NATION The State Bank of India has adopted a creative strategy to encourage prompt repayments, particularly from its retail borrowers: it sends a box of chocolates to individuals who are most likely to fall short on their monthly installments.

The bank claims that it has discovered that a borrower who intends to default won’t pick up when the bank calls to notify them. The best course of action is to show up unexpectedly at their residences.

The initiative, which aims to ensure improved collections, comes as the amount of retail lending in the system is expanding and delinquency levels are rising as a result of the increase in interest rates.

The largest asset class for the firm, SBI’s retail loan book expanded by more than 16.46% to Rs 12,04,279 crore in the June 2023 quarter from Rs 10,34,111 crore in the same quarter a year earlier, making it the largest asset class overall. In actuality, retail loans alone have driven the double-digit loan increase for the whole system, which has been roughly 16%.

The SBI team is testing an innovative method of reminding our retail borrowers of their payback responsibilities using two Fintechs that employ artificial intelligence. One is negotiating with borrowers, and the other is notifying SBI about a borrower’s likelihood to default. And to such debtors who are prone to fail, the representatives from this fintech will visit them, reminding them of the upcoming EMIs while bringing a pack of chocolates for each of them.

Because it has been discovered that a borrower who intends to default will not answer a reminder call from the bank, this new approach of personally visiting them with a box of chocolates has been implemented. Therefore, the best course of action is to unexpectedly visit them at home and surprise them. And the success rate has been enormous thus far.