Festive-season surges and early defaults

What we saw

Two-wheeler and car disbursements in October and November run 30 to 40% above the monthly average. In one festive season, first-EMI defaults on those months' loans were 1.7 times the rest of the year. Most of the excess came from fewer than 20 dealers, where files had been logged with incomplete income checks to meet the dealer's targets.

What we changed

• Branch credit managers check a sample of 1 in 5 files from each high-volume dealer during the festive weeks.
• The FEMI rate by dealer is reviewed weekly, not monthly, from November to January (KB-007).
• Sales targets for the season are set with credit, not by sales alone.

For collections

Loans sourced in the festive rush get a courtesy call 3 days before the first instalment. It costs little and catches wrong bank details and mandate errors before they turn into a bounce.