Legal litigation procedure for default loan recovery by IDLC Finance PLC

Abstract

This is with disclaimer that this report might help to learn my Legal MIS department of best practices procedures that I conducted in the IDLC Finance PLC Legal implication in action to recover the loans from defaulter. Objectives of the Study The study intends to know how IDLC Finance Limited is managing its Non-Performing Loans under legal procedures according to Artha Rin Adalat Ain, 2003. I got to work with Artha Rin Aine Team and Legal MIS Team during that time. I was responsible for identifying which clients had defaulted on loans, preparing and sending dunning letters, filing cases with external legal counsel, monitoring updates on hearings, preparing various materials related to the auction, confirmation of receipt of legal invoices, receipt of payment, and maintenance of legal MIS system. I learnt how legal, operational, and fiscal closure work together to ensure a recovery mechanism is put in place. This report highlights failures within the loans' assigned lifecycle and the following implications: limited pre-loan review analysis, failure to monitor on an on-going basis, failure to adequately assess the economic/market environment, misappropriation of the borrowers’ economic resources, and failure to properly assess the value of defaulted collaterals. Even so, IDLC has been able to address such challenges and improve loan recovery through actions taken legally and through collaboration with external partners.