Mumbai, Jan 4 (KNN) Faced with a huge problem of bad loans, the state bank of India would be installing an intelligent software, which will give it early signals whether loans advance to particular borrowers may fail.

“State Bank of India is mainly into the business of accepting deposits and lending. Sometimes, some of our advances tend to show sickness and in case early resolution is not attempted in these cases, there are chances of these assets to become non– performing assets,” an SBI notification said.

“Hence, it is most important for us that we identify warning signals at an early stage. For this purpose, we propose to set up a system to throw up Early Warning Signals, which will enable us to identify assets at the incipient stage of stress and facilitate us to act immediately to resolve/ring fence the stressed asset,” the notification added.

The software will be compatible in triggering signals pertaining to “Conduct of account/Internal Signals” like return of cheques, devolvement of LCs, invocation of BGs, overdrawing, crystallization of export/import bills, request for adhoc limits etc.

Besides, the software will also be capable of generating event based SMS / Email Alerts.

The warning signals will be raised in some of the situations like - return of 3 or more cheques (or electronic debit instructions) issued by borrowers in 30 days, on grounds of non-availability of balance / DP in the account or return of 3 or more bills / cheques discounted or sent under collection by the borrower; the borrower reporting stress in the business and financials; or any external factor, which may impact the performance of the unit / the industry, to which the unit belongs.

In this context, SBI has sought for IT consultants for installation and commissioning of software for Early Warning Signals. (KNN Bureau)