(Yicai) June 24 -- A number of Chinese banks have begun putting together their own debt collection teams in response to tighter regulation and the increase in non-performing assets across the banking industry.

Bank of Sanxiang is recruiting senior managers and call handlers for its debt collection team, the private Hunan province-based lender said late last month. Candidates must have a bachelor's degree or higher academic qualifications with backgrounds in law, finance, accounting, or management as well as experience in debt collection.

Chinese joint-stock commercial banks Hua Xia Bank, China Minsheng Bank, China Everbright Bank, China Guangfa Bank, and WeBank, an online lender under Tencent Holdings, are also hiring for senior business managers, collectors, and other personnel in the field.

The National Internet Finance Association issued new guidelines on debt collection last month, which set out stiffer requirements on compliance. The setting up of in-house teams to recover money owed is likely a move in response to that, industry insiders told Yicai.

Lenders normally entrust debt collection to third parties, as it is cheaper than doing it themselves, a source said. That is now changing.

Due to the varying quality of third-party firms, an increase in debt collection work could lead to incidents of violence and other illegal practices to recover funds, and banks may be jointly and severally liable, the person said. By creating their own debt collection teams, banks can better ensure that their practices comply with the law and regulatory requirements, the source said.

At the same time, lenders are setting up in-house teams as bad loans, particularly credit card debt, are mounting, according to an insider at an urban commercial bank. Non-performing loans have squeezed operating performance in recent years, the person added.

China's commercial banks had add loans of CNY3.4 trillion (USD468.2 billion) as of the end of March, up CNY141.4 billion (USD19.5 billion) from Dec. 31, official data showed. That at 42 listed lenders rose 7.9 percent to over CNY2 trillion last year, with 35 seeing growth in the size of their ban loans, according to Choice, a financial data platform under East Money.

Some hope to step up their efforts with their own debt collection teams, which can make better use of fintech tools, the person at the urban commercial bank noted. A number are considering the use of artificial intelligence technology, tailoring different collection strategies for different debtors based on their particular risk levels, the person said.

AI debt collection can help financial institutions improve their post-loan management capabilities, said Su Yi, an analyst at Zhongtai Securities. It can alleviate the shortfall of human resources and effectively avoid verbal clashes with debtors, Su pointed out.

Editors: Tang Shihua, Martin Kadiev