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Asset Tracing – A Force Multiplier
Photo Credit: 123RF.com

Recent news of banks auctioning properties and other assets of several high-profile personalities in order to recover their dues, on account of loan defaults, would have made many people wonder just why do these people not pay off their loans by selling their assets themselves. The reality however is not as simple; many unscrupulous loan defaulters actually go to great lengths to hide their assets in order to claim amnesty. 

On the other hand, banks also spare no effort in investigating how the loan money was spent and whether it was invested in obscure or hidden assets, and rely on experts to undertake what is known as ‘Asset tracing’. 

While the idea of tracing the hidden and exposed assets belonging to a wilful defaulter and auctioning them to recover full or partial dues is comforting, the real challenges show up in its execution. It is not an easy task to identify the defaulter’s assets, which could be located both inside and outside the country, deal with different jurisdictions with diverse recovery rules and regulations, and bring it all to successful resolution.

Can Asset Tracing Address The Issue of Rising NPAs

A volatile business environment along with unethical business practices pose a serious business risk to most businesses, including banks and financial institutions today. The ongoing COVID-19 crisis has only worsened the situation, with the volume of defaulted debts continuing to rise at an alarming rate in the country. In fact, as of September 2020 , the total amount of bad loans in India stood at around $106 billion with the Reserve Bank of India (RBI) stress tests strongly indicating that the bad-loan ratio will rise to 13.5% by September 2021, from 7.5% a year ago.

This has led to a growing need for viable asset and key individual tracking solutions that act as key enabler in formulating strategies to deal with bad debts. The findings from such solutions act as the fundamental admissible evidences in the court of law by the claimants against the defaulters/borrowers to negotiate against their NPAs for the loan payoffs.

Different Solutions/Services in Offering

Risk Consulting firms such as Lancers Risk Consulting provide high quality, customer focused and successful actionable intelligence and risk mitigation solutions to its clients across diverse sectors. Solutions include obtaining intelligence on corporations and individuals from a wide range of information sources, both overt and covert to produce focused actionable intelligence.

Some of the key focus areas include skip tracing & asset search, corporate investigations & fraud advisory, undercover operations & surveillance, plant audit & compliance support, intellectual property rights investigations & enforcement, due diligence analysis, and much more.

Framework for Effective Asset Tracking Process

In order to lay down effective strategies to recover defaulted or bad debt from the borrowers or the defaulters, a well-defined blueprint is an imperative. 

With a highly experienced operational team of 120 professionals spread across the country, everything, from training to execution, is done in-house, thus maintaining utmost client confidentiality and data privacy. In this regard, we recommend a robust five-step framework to build a concise asset location solution for our clients.

Step 1 - Proper due diligence of the claimant’s case by the Business Intelligence (BI) team

Step 2 - Outcome of the due diligence and detailed case analysis provided to the investigation team

Step 3 - Field investigation conducted and raw report given by the investigators to asset location team

Step 4 - Interim report sent to the client and based on client’s feedback, further investigation

conducted –Documentary proof procured

Step 5 - Final report sent to the client post a 3-fold quality check

Conclusion

Often, when any large-scale NPA matter comes to light, the promoters are the first ones to be insinuated to have siphoned off the money. One is innocent until proven guilty and we at Lancers help in finding the truth behind these questions with our on ground hardcore intelligence, riding on our founding principles of integrity, confidentiality and value addition. 

Brand Solutions is a marketing initiative for sponsored posts. No VCCircle journalist was involved in the creation of this content.

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