During the initial phases of lockdown till about May 31, 2020, wherein strict restrictions on mobility was in force, the company’s Head Office and branches, micro-branches remained shut and could not function, in compliance with the government guidelines.
Due to swift adaption of alternate technology, Work from Home (WFH) enablement and other functional and connectivity support, a large number of employees of the company were able to carry on with the day-to-day operations even during the lockdown.
Apart from the disruption caused in the normal functioning in the initial days of lockdown, the company was able to perform all its routine operational functions to near normalcy, except those related to branch and field visit related.
The company, in compliance with the RBI’s Covid-19 – Regulatory Package announcement, offered moratorium facility to its eligible borrowers by providing them with the option of deferment of their monthly EMI payments.
In the month of April 2020 and May 2020, about 32% and 36% of the retail borrowers, respectively, availed moratorium. During this period, the retail collections of the company were impacted on account of the moratorium availed by the borrowers and due to the restricted movement of collections and field officers.
In the month of April 2020, DHFL’s team contacted about 60% of its retail borrowers who had availed moratorium facility to explain them about the impact of moratorium on their loan accounts and also encouraged them to make the regular payments as per the monthly EMI payment cycle.
Resultantly, total retail collections of the company increased by approx. 26% in May 2020 over April 2020. With the phased Unlock announcement in June 2020, the retail collections further increased by about 83% in June 2020 over the collections of May 2020. During the lockdown period, the Company also undertook an exercise to identify potentially stressed accounts and follow-up was ensured.
With comprehensive efforts to improve collections, the company has been able to significantly reduce the quantum of its overdue (Irregular) retail accounts. The company’s retail overdue portfolio has been reduced by 23% in June 2020 as compared to Feb 2020 retail irregular position and regular collection efforts continue to improve the position even further. Similarly, retail accounts in the pre-NPA stage has seen a reduction of 45% in June 2020 as compared to Feb 2020 position.
Besides, in June 2020 even while the moratorium was extended to the customers, extensive awareness and collections campaign helped the company reduce its under-moratorium borrower position from 36% in May 2020 to 27% in June 2020 in terms of count.
The retail disbursement process of the company, which was commenced in end of Feb 2020, was impacted during the lockdown owing to the restriction on conducting field visits for due-diligence and other verification processes.
The outsourced call centre activities of the company was affected during the lockdown, however , the agency was able to revive the operations with WFH enablement within 10 days and the teams commenced the operations in limited way and gradually scaled to near full level by end of May 2020.
Dewan Housing Finance Corporation Ltd is currently trading at Rs14.60 down by Rs0.35 or 2.34% from its previous closing of Rs14.95 on the BSE.