A

PROJECT REPORT

ON

PROCEDURE ON FINANCING OF TWO-WHEELER LOAN, FOR CENTURION BANK OF PUNJAB LTD

BY SNEHA S. SALGAONKAR

PROJECT GUIDE Mrs. VIJAYA KOLEKAR

IN PARTIAL FULFILMENT OF 2 YEARS FULL TIME COURSE MASTERS IN BUSINESS ADMINISTRATION (AUTONOMOUS)

VISHWAKARMA INSTITUTE OF MANAGEMENT PUNE-411048

ACKNOWLEDGEMENT

It s a great privilege that I have done project in such a well &organized & diversified organization .I am very grateful to all those who helped and supported me in completing the project.

First of all I would like to thank Mr.Renny Joseph (Branch Manager) for giving me an opportunity to work as summer trainee in Centurion Bank of Punjab Limited &also I would like to thank to all the staff members for their cooperation &help given by them. Their experiences & feedback kept me on track and helped me produce much better results.

I am also thankful to our Director, Mr. Sharad Joshi and my Project guide Mrs.Vijaya Kolekar for helping me in completing the project.

I would also like to thankful to all college staff and my friends for helping me directly or indirectly in project.

CONTENTS

Sr. No

TITLE

PG. NO

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

EXECUTIVE SUMMARY GENERAL INTRODUCTION OBJECTIVE COMPANY PROFILE INTRODUCTION TO THE PROJECT RESEARCH METHODOLOGY DATA COLLECTION LIMITATIONS CONCLUSION RECOMMENDATIONS BIBLIOGRAPHY

01 02 04 05 10 43 45 49 50 51 52

EXECUTIVE SUMMARY

This report is on the topic Procedure of two-wheeler Loans. The project was carried out at Centurion Bank of Punjab under the esteemed guidance of Mr. Renny Joseph.

In the present world, every person wants to own the luxuries of life, but due to nonavailability of finance everyone is not able to do so. Hence some apply for loans and thus comes the need for financial institutions to lend various services to the people.

The reason for selecting particular bank is that, It has been among the earliest banks to offer a technology enabled customer interface that provides easy access and superior customer service. Centurion Bank of Punjab ltd. has a nationwide reach through its network of 243 branches and 395 ATMs. The bank aims to serve all the banking and financial needs of its customers through multiple delivery channels, each of which is supported by state-of-art technology architecture.

The entire process of sanctioning or rejecting a loan involves a number of processes. This study involves the various processes involved during the sanctioning or rejection of a loan.

Affordable interest rates and easy loans section by banks and a financial institution has increased the demand for Two-Wheeler loan in India.

GENERAL INTRODUCTION

Loan Industry Profile

A loan is an arrangement between a lender and a borrower. The lender gives money, property, or other asset to the borrower and the borrower agrees to repay the money, with interest, at some future point in time. There is usually a predetermined time for repaying the loan and generally the lender bears the risk that the borrower might not repay the loan. There are many different types and classes of loans, each with their own set of rules and terms.

Given the current interest rates and the likelihood that the rate will go up over the next year as the economy starts picking up, it is a good time to go in for a good rate for a loan. The interest rates will go up as the economy improves and one needs to be locked into a long-term low interest rate.

If one has a personal debt, like from credit cards or any other place, they should probably consider consolidating the debt. One will definitely get a better rate than a credit card will offer. If one has many loans and debt, putting them together into a larger amount allows one to negotiate a better rate.

A loan is based on a simple idea: someone gives you money and you promise to pay it back, usually with interest. Since one must pay back the lender whether the business is a fabulous success or a miserable failure, the entire risk of the new enterprise is placed squarely on ones shoulders. But if you're confident about the prospects of a business and one has the opportunity to borrow money, a loan may be a more attractive source of money than getting it from an equity investor who will own a piece of a business and receive a share of the profits. If the business succeeds as one hope and the person pays back the lender as promised, one will reap all future profits -- there's no need to share them with investors

Loan Industries in Goa:

Currently in Goa the major companies offering loans for 2 wheelers are Centurion Bank of Punjab Ltd., ICICI, Ashok Leyland, HDFC, Tatas, etc. These players dominate the market.

The loan giving houses have a presence at all the major vehicle showrooms in Goa. The various corporate houses have their own loan schemes available to the customers. The loan schemes are formulated to as to meet the demand of the people. So as to formulate an appropriate scheme various information is needed about the people so as to formulate the scheme.

Currently ICICI leads in the 2 wheeler segment followed by Centurion Bank Limited.

OBJECTIVES

To study in detail the process of loan

To improve my practical and general knowledge.

To find out the level of demand for the Two-Wheeler loan

COMPANY PROFILE

Centurion Bank of Punjab is a new generation private sector bank offering a wide spectrum of retail, SME and corporate banking products and services. It has been among the earliest banks to offer a technology enabled customer interface that provides easy access and superior customer services.

Centurion Bank of Punjab ltd. has a nationwide reach through its network of 243 branches and 395 ATMs. The bank aims to serve all the banking and financial needs of its customers through multiple delivery channels, each of which is supported by state-ofart technology architecture

Centurion Bank of Punjab was formed by the merger of Centurion Bank of Punjab, both of which had strong retail franchise in their respective markets. Centurion Bank had a well-managed and growing retail assets business, including leadership positions in twowheeler loans and commercial vehicle loans, and strong capital base. Bank of Punjab brings with it a strong retail deposit customer base in North India in addition to a sizable SME and agricultural portfolio.

The shares of the bank are listed on the major stock exchanges in India and also on the Luxembourg Stock Exchange.

Among Centurion Bank of Punjab s greatest strengths is the fact that it is a professionally managed bank with a globally experienced and capable management team. Mr.Renny Joseph looks after the day-to-day operations of the bank; AFD Head assisted by junior management team, under the overall supervision and control of the Board of Directors. Mr. Rana Talwar is the Chairman of the Board. Some of the major shareholders viz. Sabre Capital, Bank Muscat and Keppel Corporation, Singapore are represented on the Board.

Centurion Bank of Punjab is a merger of Centurion Bank with Bank of Punjab. This merger took place on June 29, 2005. The swap ratio was 4:9.This means that for every four shares of Bank of Punjab, its shareholders received nine shares of Centurion Bank.

Management
Their day-to-day operations are looked after by Mr. Shailendra Bhandari, Managing Director, assisted by a key management team, under the overall supervision and control of the Board of Directors. The Chairman of the Board is Mr. Rana Talwar. Some of their major shareholders viz. Bank Muscat, Sabre Capital, Keppel Corporation, Singapore and Asian Development Bank, Manila (ADB) are represented on the Board.

At Centurion, every customer is a customer of the bank and not merely of a particular branch. The team of Centurions (people at Centurion) is a part of a professionally managed, profit making, technology oriented, high performance Bank, which gives credence to developing excellence among its people.

The Bank offers a wide range of products, which can be tailor-made to the specific needs of corporate & retail customers across the country. They have been able to carve a niche in highly demanding & challenging financial market due to the undaunted efforts of centurions.

They provide performance-based rewards and career growth opportunities to the dynamic result oriented professionals, who make things, happen and are keen to take on new challenges. The Bank supports its employees to grow with the organization through various development initiatives like cross-functional deployment, internal and external training programs, job enrichment etc. In short, for those with merit, the opportunities are numerous.

They hold the values of integrity, professional excellence, commitment & sense of ownership, rooted in the culture of openness and innovation, in their Bank.

ORGANIZATIONAL CHART

Rana Talwar (Chairman)

Shailendra Bhandari (C.E.O) Renny Joseph Branch Manager (Panjim)

Sagar Naik Marketing Manager

Deepak Malik Sales Manager

Naresh Kumar Marketing manager

All other staff members

Learning at work

Centurion Bank of Punjab limited is a learning organization, where sharing knowledge, within or from outside, is a continuous process. The Centurions motto is We are encouraged to continually expand our capabilities to create the results, we desire. We believe in achieving extraordinary performance by creating environment in which people can excel .

Their people development efforts, which so far were more focused on technical inputs, are now being re-focused towards overall development of human resources. To synergize HR and business objectives, they have identified competencies required for present as well as future business needs through exhaustive training need identification (TNI) exercise. These identified needs will be addressed through their competency building initiatives, so as to support their businesses.

INTRODUCTION TO THE TOPIC

FILING OF DOCUMENTS

The documents collected have to filed in a proper order. The Documents are filed as follows: IRR calculation Post-Dated Cheques CIBIL 3 Pages ECS/SI if any Application form Address proof Photo and signature proof Bank statement IT copy/ letter from employer Field Investigation Report Agreement Sales certificate Invoice Insurance Registration certificate

Notes:

a) IRR: This is calculated on and internal basis. It shows the break up of the amount, the different charges . etc.

b) Post-Dated Cheques (PDC s): The bank collects post-dated cheques from the customers, which are duly signed and crossed with the right amount of EMI-Equal/Equity Monthly Installment, in the name of the Bank.

c) CIBIL (Credit Information Bureau India Ltd.): This document contains information about the credit worthiness of the customer.

d) 3 Pages: These include:1) Approval Memorandum: Various Parameters like Net Income to EMI ratio, Residence Type, Number of years in business.etc. Are rated according to the organizations credit rating chart, and the overall rating is then compared to the given norms and accordingly the loan is sanctioned.

2) Pre-Disbursement Checklist A checklist, wherein the different documents required are tick marked depending on their presence.

3) Disbursement Checklist This contains information on the Transaction, the EMI, Commission, and Initial Paymemt.etc.

e) ECS (Electronic Clearance System)/SI (standing Instruction) if any: Some Banks offer ECS, where the amount is credited to the Organizations account automatically every month. SI is when the customer has an account in the organization and the amount due gets debited from his/her account every month.

f) Application Form: This form contains the required information about the customer.

g) Address proof: These are the documents given by the customer for verification of the customers given address.

h) Photo/Signature proof: These are the documents given by the customer for verification of the customer s photograph and signature

Checking Files

1) ID proof: should match application form 2) Address: proof should match application form 3) cheques/ECS (electronic clearing service) letter or standing instructions 4) Fi report (recommended/not recommended) 2 times 5) Application form filled properly 6) Bank statement (no cheque bounces 7) DRR+CIBIL+3documents (completed) etc)

Cheques should be crossed &the right amount should be mentioned. number of cheques are also checked ECS ---Form Has Tom Be Filled &Signed By Manager Of Respective Banks Standing Instructions Are Given When Customer Has A/C in Centurion Bank of Punjab ltd. required signature should be there on agreement FI report if states that the customer is not recommended, field investigation is done again. The documents given from address& ID proof should be match the address &ID in then application form. -Hypothecation on required documents should be marked. Application form should contain required signature check references, telephone numbers (at least 1 should be landline no.) Incase of joint a/c both signature is required

Co-borrower

Students/housewife/person not working/having low income/NRI/staying in rented house/any other risk factors seen __co. borrower can be taken -have to fill the application form like the borrower -will be marked as co-borrower -should not have any risk factors as borrower -should sign in the agreement as co-borrower

INSTITUTIONS TO BE PROSPECTED: CATEGORY A:

Profit making public/private ltd companies &government organizations having salary account with Centurion Bank Punjab Ltd. Limited companies listed on BSE/NSE making profits &in existence for at least 4 years. Central& state government organizations who can provide undertaking for salary deduction to CBL and where salaries are paid by cheque/credit to bank account (not in cash) CATEGORY B:

Government department other than central &state government organization All govt. organization where undertaking for salary deduction& payment to CBL is given by employees society, provided the society is profit making & in existence for at least 4yrs Private ltd companies having minimum 25 employees & making profit at least 2yrs Large & well established educational /medical institutions run by private trusts/societies. must be in existence for at least 3yrs.

INSTITUTIONS TO BE AVOIDED: Institutions in existence for less than 4yrs Institutions where salary is paid in cash Institutions where neither salary slip nor certificate showing deduction & net salary is available. Institutions where there has been a strike or lock- out in the last 2 years. Municipalities/Town municipal Council/nagar palika Gram Phanchayats DMHO (Divisional Medical health officer) Government Department where budgetary allocation is not available Sick public sector companies of the government. Temporary Departments set up by the central/state Government for completion of specific projects. Irrigation departments BEO ( Block Education Officer) BDO Block Development Officer) Post offices Charitable organization & Trusts. Chit Funds Fire Department/ Forest department. Unregistered societies / societies running in losses / societies not in existence for at least 4 years Societies not empowered by the management for salary deduction. Public / Pvt. Ltd companies referred to BIFR or running in losses.

BORROWER SELECTION CRITERIA

Employee must be confirmed Minimum 5 year must be left` for retirement Net take home pay must be at least Rs. 3000/Net take home pay must be at least Rs. +2.5 times EMI Net take home pay after proposed EMI must be more than 50%of gross pay Employees should not be transferable outside the district. Employees must not have been suspended from service at any time Employees salary must be subject to ESI/PF deduction One guarantor working in the same organization must stand guarantor.

PROCESS
1. 2. 3. 4. 5. 6. 7. log In FI & CIBIL Filling of all required documents Checking of files Approval / Non approval of loans Punch in ( Disbursement) of files Sending to main office ( Bangalore)

5A

5N

5A

5N

1) Files received are entered into the computers consists of the details of the loan. 2) The documents are placed in order: a) Document form regarding vehicle b) Application form - 1 c) Application form -2 (If co d) FI report e) Documents regarding address ID & Income f) Agreement g) 3 pages h) CIBIL ( put in by centurion Bank) i) Post dated cheques ( placed in a special brown envelope) borrower exists)

j) IRR calculated & there are filed

3) Checking of files The files are checked as mentioned before. 4) The files are scrutinized & depending on the documents in it they are either approved or not approved.

Checked for:Age limit Job stability Residence stability Income FI report Tele verification report (when FI not present on time, telephone the 2 guarantees on agreements) CIBIL

If approved the delivery order is sent to the dealer and the file got is rechecked if not approved the file got is scrutinized and the cause for non approval is found and remedies are found for the same. E.g.: if the person is a minor or person s income is less, then the file would be the remedy for this problem. 5 a) the re- checked and approval files are finally punched in the system ..

The details regarding the customer, the agreement bike documents are fed into the computer, through fox-pro software. The same is then sent to Bangalore the files punched in the morning are sent before 12 and the files punched in the afternoon are sent before 4. b) The files that are punched are then entered into their (branch) system, for future records. The important fields here are the date of first invoice, amount the no mentioned in the insurance certificate, details of the cheques etc. c) The details of the file are again entered into the computer with disbursement details through cancel.

d) The details with were entered through Fro- pro are converted into note pad and printed the print copy taken is placed in the respective files. These files are then stamped and signed along with the seal of centurion bank of Punjab Ltd.and are sent.

Delivery order (D.O)

When a person approaches the executives of centurion bank of Punjab Ltd. for a loan, the executives first see that an FI is carried out. Once the FI report comes back as positive, a delivery order is received by the executives, the bike can be given to the customer and the required documents are selected and sent to the bank.

High risk profile / Non target profile

The bank also names customers under high Risk profile/Non- Target some of them are: 1) food chains 2) Real estate agents/property dealers 3) Chit funds/nidhi companies 4) Video parlor operators 5) Manpower consultants 6) Drivers,conductors,sweepers,mechanics 7) Cable operators 8) Auto/2 wheeler spare part dealers 9) Wine merchants 10) Std/Xerox booth operators 11) Builders/contractors/building material suppliers 12) Defence/security related forces (para military forces) reserve police force 13) Small time travel & tour operators (5 employees) 14) Small time transporters Industry professionals (including actors, directors, producers&distributors) 15) Stock brokers 16) Insurance agent other than government insurance companies

The above customers are required to meet the standard credit norms &in addition should submit: any 1 of the following proof of ownership of residence. __Electricity bill __water board bill __property tax receipt __share certificate form a registered society __sale deed __title deed

Repayment track record subject to the following: -the repayment track should be at least 12 months -The repayment should not have expired more than 12 months before the date of application -Not more than 1 cheque bounces in 12 months -Not more than 30 dbd &current at the time of application

Loan to value not exceeding 70% Example: If volume of vehicle =X Loan value is not equal to more than 70%of X

3 PAGES

1. Approval memorandum

Various parameters like Net income to Emi ratio: Resident type, Number of years in business etc are rated according to their credit rating chart, and the overall rating is

then compared to the given norms &accordingly the loan is sanctioned/rejected. An approval memorandum is prepared based on the field investigation report. The approval memorandum is basically a grading system prepared to check whether the loan should be sanctioned or rejected. The approval memorandum is prepared in such a way: (P.T.O) Customer Name_______________________________________________ Residence Locality______________________________________________ Dealer __________________________ Scheme_____________________ Vehicle___________________________ Tenure_____________________ PARAMETER GRADE RATING(To be filled in by staff) Gross Income Net Income EMI Net Income to EMI ratio Co-Hirer/Guarantor Income Self+Co-Hirer Income Total Income/EMI ratio A B C D=B/C E F=B+E G=B/C

Residence(Owned/Rented and Years) Residence Type No. of Years in Business No. of Years in Service Employer Category No. of Dependants Age Standard of living(as per F.I) Total Initial Payment %

I J K L M N O

P TOTAL Average Rating

Justification (especiallypoorcases)________________________________________________ SANCTIONED/REJECTED _________________________________________________

2. Pre-disbursement check list To check whether the required particulars are present in the file Example: Proposal form, income proof etc.This is to ensure everything is correct and in order. The pre disbursement checklist is prepared so as to ensure the forms are in order and whether the reports are correctly filled in. A pre disbursement checklist is of the following type: Agrt. No: Particulars Proposal Form Approval Memorandum Income Proof Address Proof Photograph Borrower Photograph Guarantor Agreement Signed at Proper Places Performa Invoice Security Dep. filled and stamped PDC status Coverage IRR Bank Challan for IP Yes No Borrower Name: Remarks

Proof/Dealer Receipt Disbursement Voucher Brokerage details Signature Verification NOC from other Partners(In the case of partnership firm) Board Resolution/M and AOA(Companies) Field Investigation Report Others

3. Disbursement check list This contains: i) Party name ii) Transaction structure i.e. invoice value, fixed amount, Emi amount iii) Commission details iv) Initial payment Here all the financial details regarding the 2 wheeler are entered. The EMI (Equated Monthly Installment), Invoice Value, Down Payment and number of months for the installment are added along with the initial payment. A disbursement checklist for 2 wheelers looks like this: Party Name ___________________

Transaction Structure: Invoice Value_________ Down Payment_______ Finance Amount_______ Rate of Interest_________ Advance EMI__________ Tenor ___________ EMI Amount___________ First _______months X Rs____ Second______months X Rs____ Last ________months X Rs____ First Due Date_____________ Initial Payment: ________________ Cheque/DD no: __________ Deposited on: ___________ Last Due Date_____________

Down Payment Service Charges EMI s in Advances Security Deposit Booking Charges Total Collected

PDC S CHEQUES PDD S invoice, registration 1. EMI-Equity/Equal monthly installment 2. CPA-Central processing agency 3. TVR-Tele-Verification report 4. EOD- End of day 5. TAT-Turn around time 6. COPS-Central operations 7. DDO-Drawing disbursing authority

Post Dated Cheques Deposit &items Report

Once the files are punched, the cheques from each file are punched &the details of the cheque deposit i.e. which cheque is going to be deposited & when are send to the customer, along with a notice stating the consequences of delayed payment &cheque bounce.

Pre disbursement formalities

Document required from borrower & dealer: Collect individual borrowers documents Prepare disbursement checklist Collectinvoice, insurance cover note &R.T.O Tax challan copy from

dealer.Hypothecationof CBL must be mentioned on invoice and insurance cover note. Get the agreement stamped and signed Obtain one cheque from borrower

DOCUMENTS REQUIRED FROM INSTITUTIONS Particulars Government Private organization sector societies Educational Medical Institutes Y Y

Undertaking Y Y Y Signature Verification Of Y Y Authorized Signatory Management awareness Y* letter * Required for societies of private sector institutions only.

NOTE: Undertaking must be on Rs100/- stamp paper or on institutions letter head with Rs 100/- special adhesive stamp affixed on it &cancelled.

POST DISBURSEMENT FORMALITIES: Post-Dated Cheques deposit and items report Monthly letter to be sent for deduction and payment of installments Should be sent on 15th of the month for installment due in 1st week of next month. Details of the case such as invoice, insurance and RC are recorded into the system for further reference.

Amount of Loan to be financed: LTV Brand Hero Honda Normal Brand Splendor + Passion+ CD Dawn CBZ Ambition/Karizma Victor Max Fiero Scooty Mopeds All Models Freedom Scooter Boxer Pulsar Caliber Eliminator 2 Stroke Scooter 5 Stroke Scooter Spirit/Spice M 80 Entire/Libero Cruz RXZ -185 7BX/YB Boss Nova Style/Zing Aquilla All Models Annex-1 LTV 85% 85% 85% 85% 75% 85% 85% 85% 85% 75% 85% 85% 75% 85% 85% 85% 75% 80% 80% 80% 80% 80% 80% 80% 80% 70% 75% 75% 70% 70%

TVS

Honda LML Bajaj

Yamaha

Kinetic

Enfield

TO WHOM SHALL THE BANK LAND

A. Individual Salaried individuals excluding -Temporary jobs -Daily wages employees -Contract workers

Self employed individuals including -Proprietor in sole proprietorship firms -Partner in partnership firm -Self employed professionals viz Doctors, CA s, Architects, etc -Directors in companies

Excludes: -Persons with strong political affiliations -Persons with no defined source of regular income -lawyers -Recovery/Repossession agents -Bar owners /employees -Chit fund owners/employees

B.Firms and Companies Partnership firm Private/public ltd.company

Excludes: Trust and charitable organization including private non-charitable trust.

Products to be financed: To concentrate on all two wheeler 100 cc and above scooterettes (without gear bikes) can be financed. No mopeds would be financed except Bajaj M80.Tvs super XL would be considered at specific locations (dealers) only.

SCHEMES
Various schemes that are provided to the customer are as follows:

1) Advance EMI Schemes: Here EMI is paid in advance at the start only.

2) Green Channel Scheme: Here income proof is not required. For Hero Honda the loan rate is 20% and for all other bikes it is 25%. The customers have to pay 40% of the on road price, should have their own residence and must be in business or service for at least 5 years

3) Margin Money Scheme: Here a minimum of 20% is paid to the dealer directly and the rest is paid in equal monthly installments

4) Any Other SchemeSuch scheme is given with prior approval

5) Zero % scheme with subventions: Dealers provide the bank with subventions. If the loan amount is Rs.X, then by deducting the subvention, the IRR percentage will increase thus making it profitable o the bank.

6) High LTV Scheme: Here up to 95% of the on road price can be financed. -Only for scooters and motorbikes -Bajaj, Hero Honda, Honda, TVS.

Some schemes are decided on the spot depending on the capacity of the customer such schemes are calculated with the help of following formula:

=Loan amount*interest *year+loan amount/month

TERMS AND CONDITIONS 1. Finance amount o On road price o Minimum 10,000/o Borrower stake <20%else approval of country head is required

2. Tenor: -12-36 month s else special approval by country head -less than 100cc, maximum =24 months

3. IRR: -8.5 at branches -10.6 at dealerships

4. Service charges: -2% of finance amount -500 when loan <25,000

5. Dealer Commission This is the commission given to the dealers.

6. Security deposit

7. Interest on security deposit

8. TWPC (Two wheeler precautionary charges)

Eligibility Criteria:

SR.NO 1. 2. 3.

CRITERIA Age Income Employment / Business

4.

5. 6. 7.

Minimum Monthly net Income Stay at current Minimum 1 year Residence Location Must live & work within the geogRaphic limits of the city as defined Telephone at Preferable Residence / Place of work

SALARIED 21-25 years Minimum Net salary of Rs 8500 p.m Minimum 12 months in Current employment &Employed For at least 2 yrs should be a Confirmed employee 3 times EMI

SELF-EMPLOYED 21-60 years Minimum Net income of Rs 40,000/-p.a Minimum 3 years

3 times EMI

Minimum 1 year Minimum 1 year Must

Minimum length of service can be waived incase of professionals like MBAs, CA s, ICWA s, provided that the applicant is working with a reputed employer .must be a confirmed employee. If length of employment in the current job is less than 12 months, details of previous employment in the last 2 years may be obtained. Case must be done with guarantor. The balance period for retirement should be >the tenor of the finance facility Incase of parent student proposal the parent has to be taken as co-borrower /guarantor. Incase of married couples, salaries of both the spouses can be considered as coborrower. When approval is made although the eligibility criteria is not met, AM must record the exceptional approval & the reason.

FIRMS AND COMPANIES Sr.No 1 2 3 4 5 Criteria Minimum year in a Business Minimum net Income Location Phone PDCs Firms 3years Rs 40,000/-p.a City where loan is booked Necessary at place of Business From account of firm/ Companies Pvt/Public Ltd Companies 3years Rs40,000/-p.a Rs 40,000/-p.a Rs 40,000/-p.a Rs40,000/-p.a

PRE APPROVAL DOCUMENTS: 1. Application form completely filled &signed by customer. 2. Income proof 3. Address proof 4. Identity proof 5. F.I. agency report 6. Approval memorandum to be issued on the basis of credit scoring

PRE DELIVERY DOCUMENTATION -Agreement duly signed by borrower &stamped -Signature verification -Post dated cheques -Memorandum &articles of association incase of company -Partnership deed/letter of authority/consent letter incase of partnership firm delivery order to be issued

TRADE ADVANCE Trade advance is provided by remitting a pre-approved amount to the dealer & this amount is reversed against vehicle purchased from the dealer .The main purpose of providing trade advance by the bank is to ensure increased sales by virtue of the agreement with the dealer to confirm with their commitments .The advantage to the dealer is the perception that the provision of term loan facility to the ultimate & end user would serve as an effective sales aid.

REPOSESSION OF VEHICLE Agency for repossession Agents appointed for repossession must have an agreement signed with CBL REPOSESSION All repossession orders will have to be issued under CBL s name and not TCFC .IF the HP endorsement on the RC book will continue to be in the name of CBL ,every repossession order issued by CBL should have a certified true copy of the court order approving the merger attached to it . In short repossession means when the customer doesn t pay loan amount (i.e installment)for 2 months, in this case vehicle is later on taken back.

The register should contain following information at the minimum: Name of the borrower Agreement number Date of repossession Repossession agent Vehicle number Model Make Colour of vehicle Location where vehicle is parked Custody of PDD with(sign of person with whose custody PDD is lying) Custody of keys with (signature of person in whose custody keys are lying) Condition of vehicle at the time of repossession Record date of sale of vehicle/refinance of vehicle Party to whom sale /refinance given ,sale proceed details Reports available to facilitate termination Statement of account (History of borrower payment) Termination approval memorandum(am) Termination accounting entries Ledger account for reconciliation

Terminations

Termination on client request Termination on account of maturity of the case Forceful customer given a separate a/c number whenever customer asks for termination first a/c number Repayment a/c all cheques are deposited on monthly basis if loan is mature unless customer comes for the closure of loan. Loan a/c here actual loan amount is booked ,principle amount is deducted every month PDC A/C here principle +interest is added to this a/c ,in other words all the number of PDC S are loaded in this a/c &on the monthly basis ,the cheques are deposited in his personal a/c

There are two types of termination -Matured termination -for closure termination Matured termination This termination, the PDC s are banked from first installment to last insallment,till the loan matures. For closure /pre mature A person can close his a/c anytime after 6 months from the date of loan senctioned.The customer can for close the a/c by paying future principle +Pre mature penalty +interest for current EMI .incase of a normal termination In case of pre-mature termination ,where customer has overdue amount then he has to fulfill above condition +overdue EMI /bounce charges +delay payment charges.NOC s are also issued 7balance PDC s are given back.NOC sd are issued in both the termination after the A/C s are cleared on the operations side .NOC S are signed by the branch head.

Repayment account is viewed for any overdue EMI .which is then included in termination a/c with bounce cheque. Calculation of Rate of interest: Different vehicles are charged different rates of interest, Eg: Hero Honda=X% Here the agent can charge more than X% to the customer, but not less than X%.The agent decides the rate depending on the customer

TWO WHEELER PROCESS FLOW Sr. no 1 Activity Customer walks in the show room , DCA gives our scheme and takes the details of the customer (name, both addresses, telephone numbers , occupation ,name of employer ,DOB, names of references, loan amount , tenure, invoice value ,LTV,EMI amount and model)and faxes/by telephone gives the same to CPA shop.(in a standard format below).customer fills the application form. Data entry for satyam De-dupe (later on in the LOS system)and firing of FI by e-mail /phone to FI agency to be done simultaneously .FI cut off time 2 p.m.i.e cases received by CPA till 2p.m will be decisioned on the same day ,and cases received after 2 p.m on the next day morning. TVR and Ref check to be done at CPA shop FI Report received (e-mail/phone confirmation followed by physical reports)EOD.TAT for FI -4hrs local,24 hrs out-station .TATs are not honored ,local cr. Mgr. And AFD Head can jointly take a decision to issue DO .For outstation cases, DO can be issued only after receipt of FI report.(95% cases to be decided in these TAT) Delivery Order (DO) to be issued for those cases where the FI& De dupe, TVR, Ref check are positive .Dealer can deliver the vehicle, subject to all Pre-delivery documents along with PDCs and loan agreement is collected from the customer. Standard format of DO is given below. Completed files of all approved cases Received in CPA.(Files to have complete app form, margin money receipt ,supporting dox for income, age, address proof ,full set of PDCs /SI etc., invoice ,insurance cover note with the bank hypothecations)TAT for local cases 48 hrs ,for outstation cases 72 hrs from delivery. Credit Checks the file for completeness ,and Day number Day Zero Owner Sales

Day zero

CPA

3 4

Day zero Day zero

CPA FI Agency & CPA

Day zero/one

CPA

Day two/Three

Sales

Day Two

CPA

10

11 12

13

14

15

CAM is prepared Files to be screened /sampled By FCU. Pre sampling checks at the rate 3%of overall logins In case of negative FCU report ,Collection will be intimated either to track such cases separately ,or for repossession Files cleared by credit will be handed over to local Ops for post delivery checking and disbursals Local Ops checks the same and e-mails the Disbursement Advice to COPs COPs check the Disbursement. Advice and book the loan on the system ,A/C number is generated ,and funds are released to respective AFD ,in their disbursement pay order a/c for disbursement to dealers Post approvals by COPs, local OPs .to do the disbursement to dealer either by pay order /TA adjustment. Local Ops completes the file with proof of disbursement and send the same to COPs for storage and PDC Management .TAT-3 days from disbursement. COPs to complete the data entry in the system and store files and PDCs for all future use.

/Three Day Two /Three

CPA

CPA

Day Two /Three Day Two /Three Day Three / four

Cr .Mgr/ CPA Ops Local Ops

Day Three / four Day six/seven

Local Ops

Local Ops

COPs

RESEARCH METHODOLOGY

Research Survey to find out the customer profile of Loan Applicants:

Project Idea

The Research Survey was conducted to find out the customer profile of those people applying for 2 wheeler loans at Goa.Currently in Goa the major companies offering loans for 2 wheelers are Centurion Bank Ltd, ICICI, Ashok Leyland, HDFC, Tatas, etc.

The loan giving houses have a presence at all the major vehicle showrooms in Goa. The various corporate houses have their own loan schemes available to the customers. The loan schemes are formulated to as to meet the demand of the people. So as to formulate an appropriate scheme various information is needed about the people so as to formulate the scheme.

Objectives Primary Objective To find out the customer profile of the loan applicants i.e. the people applying for loans at the Two- wheeler showrooms in Goa. Secondary Objective To find out the approximate number of people applying for loans at the 2 wheeler showrooms in Goa and which scheme of loan they apply for. Management Problem The management problem submitted was to find out the customer profiles of those people applying for loans at 2 wheeler showrooms. Research Problem

My research problem was defined as to find out the number of people applying for loans at the 2 wheeler showrooms, the profile of people and the various schemes they go for while applying for loans.

Type of Research
Type of research being used for the study was both qualitative and quantitative. The information was gathered by using structured questionnaires and interviewing the centurion Bank Limited employees present at the various 2 wheeler showrooms in Goa.The areas covered were the 2 wheeler showrooms in Panjim.These were used as representation of both North and South Goa as they fall in the respective areas.
The present study was conducted for Centurion Bank of Punjab Limited, Panjim-Goa.The study was mainly based on analysis of data collected through detailed questionnaires. The data was collected by visiting all the Two- wheeler showrooms in Panjim areas and collecting information from the employees present there. The analysis of the information gathered was done by using absolute numbers, percentages, and pie charts.

DATA COLLECTION

The necessary information and data is collected as follows:

a. Primary sources: o Information and data collection was done with the help of the questionnaire o We also carried out personal interviews with the customer

b. Secondary sources: o Information and data was collected from books, journals, periodicals etc. Information was collected from the brochures provided by the Study unit

THE PROFILE OF CUSTOMERS a) Gender of People - The data was analyzed to find out the gender of the people applying for loans The numbers were later converted to percentages to get an approximate result.

Gender of People

10% Male Female 90%

The number of male people taking loans was found out to be much higher than female. Approximately 90% of the people taking loans were male. This showed that bikes like motorcycles were more dominant in the loan market.

b) Age Group

The data was analyzed to find out the age group of the loan

applicants i.e. to which age group the majority of the applicants belong to. The numbers were later converted to percentages to get an approximate result.

Age Group

18 -25 26-40 41 and above

It was found out that approximately 70% of the loan applicants were between the age group 26-40.The number of loan applicants were found to be very few in the above 41 group. Thus the majority of people were in the 26-40 age groups.

c) Income Group

The data was analyzed to find out the income group of

the applicants. This was to find out to which income group the majority of the loan applicants belong too. This is also essential to find out the approximate installment payment that can be expected i.e. the installment payment that has to be paid when taking a loan.

Income Group

Upto 5000 5000 - 10000 10000 - 20000 20000 and above

From the above pie chart we come to the conclusion that 70% of the people belong to the below Rs.5000 per month age group. Almost no people belonging to the above 20000 per month apply for loans. Thus it makes sense to fix a low monthly installment as majority of those are in the Rs.5000 and below category.

LIMITATIONS

1) While doing the study the employees of , Centurion Bank of Punjab limited were not interested to give out information, as it was company specific & confidential. In many cases; they just refused to spare any time.

2) Since the project duration was only two months, time constraint limits the area of study.

CONCLUSIONS

Growth in populations and income level had led to increase in the demand for TwoWheeler loan. Affordable interest rates and easy loans section by banks and a financial institution has increased the demand for Two-Wheeler loan in India.

Customer satisfaction level of most respondent is higher for Centurion Bank of Punjab limited which is provided by survey.

RECOMMENDATIONS

The time taken in providing service to the customer should be minimized so as to give quick and efficient service

Another recommendation is that the Centurion Bank Of Punjab Limited should do more and more promotion of their service and the customers should be made aware of the cost benefit advantages of taking services from authorized company dealer

More visibility through advertising is needed specially media advertising like TV channels, radio stations, etc.

There is a need to open more branches /offices at the major localities in different cities and if possible in towns.

Special schemes like lucky draws, attractive prices could be used for promotion

BIBLOGRAPHY

Financial Management(Text and Problems) By Khan and Jain

Financial Management By I.M. Pandey

Market Research By Tull and Hopkins

Newspaper clippings, company records, booklets and files.

www.centurionbop.co.in

This document was created with Win2PDF available at http://www.daneprairie.com. The unregistered version of Win2PDF is for evaluation or non-commercial use only.