Trai’s numbering mandate raises debt collection concern

The Telecom Regulatory Authority of India’s (Trai’s) directive requiring banks and non-banking financial companies (NBFC) to shift to the ‘1600’ numbering series for voice calls to curb spam and fraud is raising concern among the lending players.

- AJINKYA KAWALE

A dedicated number series is likely to deter low-intent borrowers from engaging in calls, pushing lenders towards higher-intensity collection strategies such as expanded deployment of on-ground staff, greater use of official alternate channels like WhatsApp, and a sharper focus on borrower education to keep delinquencies in check.

While the intent is consumer protection, the mandate could disrupt digital debt recovery channels, said sources.

People with knowledge of the matter said that the cost for a lender may rise between 10 to 15 percent depending on the stage of collection or delinquency of a particular borrower.

Additionally, this will also mean more deployment of field agents as lenders would prefer physical channels to reach out to borrowers.