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Project Report on
Business Development, process of Refinance
Business with new RTO module & Effective
Collection of Instalments
I am also thankful to the team members of the Purnea branch who extended
their support all the time. Their field experience in Mahindra Finance was
extremely valuable for my study both theoretically & practically.
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Business understanding:
Sources Of Business:
Enquiry:
Enquiry for business comes through existing Borrowers, brokers, dealers and
direct walk-in customers in branches.
Handling enquiries:
Enquiries are passed on to the business executives who will conduct Field
Investigation within 24 hours at the residence / work place of all applicants
(Borrowers, co-Borrowers, if any and guarantor).
If the case is rejected, the executive should justify with reasons and the file
should be given back to the Borrower. The relevant details is updated in the
register maintained for rejected cases.
Required Documents:
• Address and ID proof:- Aadhar card, Voter ID, Driving license
• Signature verification:-Pan card
• Income proof based on the class of the Borrower:-
* For Salaried employees – Latest salary slips for 3 months & Bank statement
of the account in which salary is credited, for a minimum period of 6 months.
* For Business class - Financial statements for Two years & Bank statement
for a period of minimum 6 months.
* For Agriculture class - Land documents like 7/12 extract & Bank statement.
* For Hiring class - RC Book copy of the asset used on hire & Bank statement.
This period is again a time for an upsurge in sales owing to the harvest
season which gets maximum business for Mahindra products as most of
our products namely Utility vehicles, Tractors as well as Sports Utility
Vehicles find ready takers in agricultural based customers.
In India Ritual days like Manmaas, Kharmass, Bhado & Pitrapaksh play
a very important role in defining purchase of vehicle. People in India
believe that these days are unlucky for purchase of any new product.
Thus during these days decline in business is observed.
Strength
1. Brand image
2. Technology driven
3. Follows business ethics & Commitment follow-up
4. Strong HR policy
5. Prompt service
6. Decentralization of authority
7. TA to dealers
Weakness
1. Less effort on promotion.
2. No flexibility in documentation causing lot of leads failure.
3. Long process from FI to punching.
4. Increasing OD is ultimately leading to NPA.
5. Lack Incentives on many products.
Threats
1. Tough competition in the market at dealerships.
2. Risk involved in area diversification & establishment.
3. Increasing OD ultimately results into NPA. (Non Performing Assets)
4. RC collection. Due to which dealer’s code gets locked.
SWOT SUMMARY
Reasons for growth in market share:
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6. Some organizations are very liberal in sanctioning loan by taking
huge risk and funding to blacklisted customers.
7. Public banks like SBI are turning as major threats. Major financing of
Maruti Udyog Ltd are either done by SBI or other private Limited
banks.
8. FI is sometimes delayed by more than 2 days which results customer
turnover.
9. National Banks & Private Banks penetration in Vehicles Financing
has also increased aggressively.
10. Tata dealers has their own finance company. Major chunk of
financing Tata vehicles goes with their own financing agency.
11. Guarantor issues/Lengthy Documentations Procedures
12. Payment delayed to Dealers.
Waiver:
Existing customers should be given waiver of 1 to 1.5 percent in rate by
default. This increases the TAT & level of satisfaction to the customer
as well as the dealer.
Waiver of guarantor could be offered to genuine existing customer who
has 2-3 vehicles financed from MMFSL.
Waiver of guarantor should be given up to 70-75% funding which is up
to only 60% in Non M&M products. This would bring more business to
the company as majority of cases turn down due to the guarantor policy.
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Other strategies to increase market share-
Maintaining good relations with executives and the higher
authorities should be in priority.
A monthly tracker or a daily sales register (DSR) is to be
maintained compulsorily.
Team leaders should have weekly reviews of their respective
teams.
PDDs to be collected as soon as possible from the dealer.
For Personal loans and Re-finance cases, existing customers
should be targeted effectively.
Prompt service and customer-satisfaction should be given top-
most priority.
Any issues/problems should be immediately communicated to the
BA.
TAT (Turnaround Time) service should be improved. Executives
need to take care of FI and DO early so that the cases could not be
handed over to other finance companies.
Attractive pay-out schemes should be made so that the sales
executives could be motivated effectively.
Visits of higher authority at the dealer spot and talking with
executives would also help in knowing the problems and issues so
that it could be resolved early.
Relaxation on some documentation, especially related to
guarantor.
Monthly meetings with dealers involving ABMs & DMs.
12 | M a h i n d r a & M a h i n d r a F i n a n c i a l S e r v i c e s L i m i t e d P u r n e a
Existing process for Business through RC Limit
Due to the existing process, we were unable to cater this business due
to our existing business SOP of disbursement ie. post duly completion
of transfer in name of borrower and hypothecation in case of NON RC
business or direct sourcing business.
Seller wants to the sell the vehicle to a new borrower who wants the
finance facility & we are not catering this business due to current RTO
process & SOP.
Customer needs refinance on existing vehicle & we are not able to cater
this due to TAT in hypothecation process.
13 | M a h i n d r a & M a h i n d r a F i n a n c i a l S e r v i c e s L i m i t e d P u r n e a
New RTO Module
Business team can access this module from their existing MOBILE APP.
MFC can also be used for centralized form B extract for all the products.
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Process for Branch Accounts:
Punching process:
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Step 1:
Step 2:
Send mail to: rtoservices@indianbluebook.com;
Step 1:
Login to your account. Every branch will have a dedicated login
which needs to be entered by going to the following link:
http://rto.ibbtrade.com/
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o Note: Every branch accountant will be given a format of the
sanction letter which needs to be uploaded in to the system after
the file for the customer is received from the executive.
Step 2:
Click on RTO Status in the menu bar to look at the customer list
against which you need to upload the sanction letter.
Step 3:
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Collection
Mode of Collection:
Cash,
Cheque; PDC,
DD,
NEFT/RTGS,
Online Payment, &
ECS/ACH
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Delinquency Rate:
Delinquency rate is the percentage of loans within a loan portfolio that have
delinquent/overdue payments. The delinquency rate is simply the number of
loans that have delinquent payments divided by the total number of loans an
institution holds. Typically, delinquency rates on loans are affected by the
credit quality of the borrower and macroeconomic factors such as
unemployment.
Due Date:
Due date is the date on which the borrower has to pay the instalments which is
stated in the contract. The due date which we usually follows are 5, 10, 15 &
20 of every month and the maximum collection of our branch comes on the
day of 20th of every month. The customers who fail to make payments on their
due date are imposed penalty; which is known as AFC (Additional Finance
Charges).
AFCs are one of the direct sources of income for the company. AFC are
charged at a rate of 36% (current rate) per annum and varies day by day.
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Effective Collection:
Collection of instalments has always been the major focus of management, &
has as much importance of doing business or sanction loans.
Likewise Business team, MMFSL also engages collection team for conducting
effective collection of EMIs from the customers.
MMFSL has come up with various policies and schemes to tackle delinquency
levels in the Organisation.
Following points shall elaborate the moves of MMFSL to curb the collection
effectively:
Separate teams for collection of EMI are lead by ACMs & experienced
executives.
Business teams are responsible to judge the customer profile and the
capability of customer to pay the EMI timely as they sources & generate
customers. Thus, to enhance collection & have smooth conduct of
collection operations, business teams have to look after the collection for
first 12 months of installments. Collection responsibility is shifted to the
collection team of the branch for later installments.
Customers are periodically reminded about their due dates.
Collection team mobilizes themselves to reach out customers at their
residence if the customers are not capable to come to the branch or
having no access to submit their installments.
Business team duly aware the customers about the contingencies and
AFCs for defaulting any installment.
The management uses various analytical tools to give effective
directions to the collection team. Records with current dates are
monitored and analyzed for briefing the direction and to remove
bottlenecks at operations.
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Bucket Movement Report:
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Zero Age Summary:
Zero Age Summary states current data of opening age balance and
current status of the number of customers on due date.
There are six due dates as practiced in MMFSL ie. 1st, 5th, 10th, 15th,
20th, & 25th.
The Collection report is generated “Division” wise which is further
segregated to Area & further to Executive’s field for effective
decision making.
The report would be very beneficial for solving overdue of customers
if monitored and referred on daily basis. The report should be
transparently accessed by all executives using display boards at
branch.
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