Case 1 : "Loan Recovery Crisis in SME Banking"

A reputed private commercial bank in Bangladesh is facing a rising number of overdue SME loans. Over the last year, the default rate increased from 8% to 15%. An internal review finds :

• Relationship Managers (RM) are not maintaining regular follow-up with clients.
• Credit Administration claims that incomplete loan files and missing documents delay loan approval and renewal.
• Recovery unit says that branches do not share correct customer contact information.
• Clients complain that they receive no early reminder before loans fall overdue.
• Senior Management notes that departments work in silos and there is no unified communication platform.

The concerned department of Bangladesh Bank has asked the bank to submit an action plan to reduce rising defaults withing 60 days.
Questions :

(a) Identify the communication barriers (Organizational, interpersonal, procedural) that worsened the default situation.
(b) What types of communication strategy will be preferable among RMS, Credit Administration, Recovery Unit Branches?
(c) To reduce overdue loans, recommend long term strategies

(Digital CRM system, training, Interdepartmental meeting etc.)