The effective collection practices are nothing but a process of recovery of the loan amount from the borrowers. Within the entire loan process period if the borrower is not paying the loan amount in time which means overdue of payments, then the banks are having different types of collection procedures in order to recover their loan amount form the borrower.

The recovery process varies from the bank to bank. Some of the banks will make use of the preliminary acts and authorities on the borrowers by sending them default notices in order to recover their loan amount, whereas some of the banks will use their self acts and norms of their banks such as they will appoint the special recovery agents to recover the allotted amount from the customers.

This is having positive as well as negative impact on the customers as some of the customers will pay their dues if the recovery agents visit their place, but some of the customers will not even consider the actions of the recovery agents, at this particular time the banks should make use of the existing preliminary acts in order to recollect their money from the borrowers.