PROFILE OF THE ORGANIZATION

MAHINDRA AND MAHINDRA FINANCIAL SERVICES LTD. [MMFSL]

MMFSL is one of the leading non-banking finance companies (NBFCs) with customers on
Rural and semi-urban markets of India. It is a part of Mahindra Group, which is one of the
largest conglomerates of India. They are primarily engaged in providing financing for new and
pre-owned auto and utility vehicles, tractors, cars and commercial vehicles. They also provide
housing finance, personal loans, financing to small and medium enterprises, insurance broking
and mutual fund distribution services.
It was incorporated in 1991 and commenced operations as a finance company in 1993.It was
registered as a deposit-taking NBFC in 1998 and since established a pan-India presence,
spanning 24 states and four union territories through 628 offices as of September 30, 2012.



















Company Profile

Mahindra & Mahindra Financial Services Limited (M&MFSL) is a ,subsidiary of Mahindra and
Mahindra Limited, one of Indias leading tractor and utility vehicle manufacturers. M&MFSL is
one of Indias leading non-banking finance companies focused in the rural and semi-urban sector.
It is primarily in the business of financing purchase of new and pre-owned auto and utility
vehicles, tractors, cars and commercial vehicles.
The company has 559 offices covering 24 states and 4 union territories in India, with over 1.6
million vehicle finance customer contracts since inception, as of June 30, 2011. M&M Financial
Services Ltd has two subsidiaries Mahindra & Mahindra Rural Housing Finance (MRHFL) and
Mahindra Insurance Brokers Ltd
(MIBL). The parentage of the awe-inspiring Mahindra & Mahindra Group and the close
association with dealers through out the country gives company an additional and exclusive
advantage. The companys financial solutions include Vehicle Financing, Refinancing, Housing
Finance, Personal Loans, Fixed Deposits, Insurance Broking and Mutual Fund Distribution.
CRISIL has assigned AA+/Stable, FITCH has assigned AA (ind) /
Positive and Brickwork has assigned AA+/ Positive rating to the Companys long term and
subordinated debt.

VISION
Their Vision is to be the leading rural finance company and continue to retain the leadership
position for Mahindra products.
GOALS
Their goal is to be the preferred provider of financial services, across the rural and semi-urban
areas of India.
STRATEGY
Their strategy is to provide a range of financial products and services to our customers through
our nationwide distribution network.






SWOT Analysis of mahindra Finance

STRENGTHS

Mahindra Finance has advantage of brand name of Mahindra &Mahindra Group.


Mahindra Finance has large asset base of Rs.5000 crores.
It has large distribution channels with 350 branches all over the nation.

Company has large financial base as its IPO was subscribed 26.88 times.

WEAKNESSES

Mahindra Finance provides advisory service and they do not have share broking facility which
their competitors have.

Mahindra Finance is not known to the people.

Mahindra Finance does not make advertisement of its product.


Opportunities

Mahindra Finance has entered into mutual fund distribution which is growing as per Indian
market development

Automobile sector in India is growing as foreign companies entering in India which is useful for
Mahindra Finance as it provides vehicle loans

Mahindra Finance helps individuals in making financial planning which is most profitable in as
investment trend is changing in India.

Threats

The biggest threat for Mahindra Finance in the market is new entry of foreign non-banking
financial institutions.

In case of vehicle financing company has tough competition from large banks like State Bank of
India, ICICI etc.

Subsidiaries of Mahindra Finance

1) Mahindra Insurance Brokers Limited (MIBL)




Mahindra Insurance Brokers Ltd. (MIBL), provides 360
o
insurance solutions, tailor-made for
the diverse needs and risk profiles of our varied consumer base. While providing direct insurance
broking for the retail customer base of around 1.3 million and catering to a large number of
corporate customers, the company also offers a range of plans for the Life as well as Non-life
insurance segments.
MIBL is committed to provide value to its customers by understanding their insurance needs and
risk profile in a highly detailed and systematic manner. This helps in chalking out more
innovative, cost-effective and customised insurance solutions. And its uncompromising
adherence to the highest standards of quality is evident from the fact that it is one of the few
insurance broking companies in India to have been awarded the prestigious ISO 9001:2008
Certification for Quality Management Systems.
MIBL was granted a Direct Broker's Licence by the Insurance Regulatory and Development
Authority (IRDA) in May 2004, enabling it to undertake direct insurance broking in Life and
Non-life businesses. In addition, MIBL has empanelled itself with various public and private
insurance companies to fulfil its promise of delivering customised solutions to customers. In
September 2011, MIBL was granted a Composite Broker licence by the IRDA, thus foraying into
the Reinsurance Broking business along with Direct Broking. As a Total Insurance Risk
Solutions provider, MIBL also plays an integral role in the Risk Management portfolio of
customers.

Vision

"To be India's no.1 Insurance Broker in revenue by 2015."


2) Mahindra Rural Housing Finance Limited (MRHFL)

MRHFL, India's largest rural housing finance company, was incorporated with an objective to
transform the rural and semi-urban landscape by providing cost-effective and flexible home
loans. So be it home construction, purchase, extension or improvement, MRHFL provides loans
for most home finance requirements. Today, it successfully serves over 1 lakh customers and
operates in more than 17,500 villages across states like Maharashtra, Madhya Pradesh,
Rajasthan, Gujarat, Bihar, Andhra Pradesh, Tamil Nadu, Karnataka and Kerala.
In fact, MRHFL has been responsible for some major transformations in rural India. People in
the remote villages have very little chance of getting loans from established financial institutions
due to lack of documents. And local money lenders prove too expensive. This is where MRHFL
comes into the picture and provides affordable home loans with minimum documentation.
It has facilitated the upgradation of many 'Kuccha' and unstable structures made of mud to
'Pucca' houses made of bricks and mortar, changing the flooring of houses from rough cement
base to tiles. In short, huts have turned into homes, and dreams into realities.
A subsidiary of MMFSL, Mahindra Rural Housing Finance was incorporated on April 9, 2007
and obtained a certificate of registration to commence the business of a Housing Finance
Institution from the National Housing Bank on August 13, 2007. Mahindra & Mahindra
Financial Services Limited (MMFSL) holds 87.5% of the equity of MRHFL and the National
Housing Bank (NHB) holds the remaining 12.5%. NHB, in turn, is a fully owned subsidiary of
the Reserve Bank of India (RBI).
Mission

"Transforming rural lives. Together"

INTRODUCTION


What is Securitisation?

Securitisation is a process by which assets are sold to a bankruptcy remote special purpose
vehicle (SPV) in return for an immediate cash payment. The cash flow from the underlying pool
of assets is used to service the securities issued by the SPV. Securitisation thus follows a two-
stage process.
In the first stage there is a sale of single asset or pooling and sale of pool asset to a bankruptcy
remote special purpose vehicle (SPV) in return for an immediate cash payment.
In the second stage repackaging and selling the security interests representing claims on
incoming cash flows from the assets or pool of assets to third party investors by issuance of
tradable debt securities.

In others words,it is the process by which, financial assets such as household mortgages, credit
card balances, hire-purchase debtors and trade debtors, etc., are transformed into securities. In
present day capital market usage, the term is implied to include securities created out of a pool of
assets such as household mortgages, credit card balances, hire purchase debtors and trade
debtors, other receivables, etc., transferred, fully or partially, which are put under the legal
control of the investors by the owner (the Originator) in return for an immediate cash payment
and/or deferred consideration through a Special Purpose Vehicle(SPV) created for this purpose.
BASIC STRUCTURE
In its simplest form a Securitization involves (1) the sale of a large pool of Receivables by an
entity (Originator) that creates such Receivables (or purchases the Receivables from entities that
create them) in the course of its business to a "bankruptcy-remote," special purpose entity (SPE)
in a manner that qualifies as a "true sale" (vs. a secured loan) and is intended to achieve certain
results for accounting purposes, as well as protecting the Receivables from the claims of
creditors of the Originator, and (2) the issuance and sale by the SPE (Issuer), in either a private
placement or public offering, of debt securities (Securities) that are subsequently satisfied from
the proceeds of and secured by the Receivables. When the Securitization is "closed," funds flow
from the purchasers of the Securities (Investors - usually banks, insurance companies and
pension funds) to the Issuer and from the Issuer to the Originator. All of these transactions occur
virtually simultaneously.

Originator
the entity that either generates receivables in the ordinary course of its business, or purchases or
assembles portfolios of Receivables (in that sense, not a true "originator"). Its counsel works
closely with counsel to the Underwriter/Placement Agent and the Rating Agencies in structuring
the transaction and preparing documents and usually gives the most significant opinions. It also
retains and coordinates local counsel in the event that it is not admitted in the jurisdiction where
the Originator's principal office is located and in situations where significant Receivables are
generated and the security interests that secure the Receivables are governed by local law rather
than the law of the state where the Originator is located.

Issuer
the special purpose entity, usually an owner trust (but can be another form of trust or a
corporation, partnership or fund), created pursuant to a Trust Agreement between the Originator
(or in a two steps structure, the Intermediate SPE) and the Trustee, that issues the Securities
and avoids taxation at the entity level. This can create a problem in foreign Securitizations in
civil law countries where the trust concept does not exist (see discussion below under "Foreign
Securitizations").

Trustees
Usually a bank or other entity authorized to act in such capacity. The Trustee, appointed
pursuant to a Trust Agreement, holds the Receivables, receives payments on the Receivables and
makes payments to the Security holders. In many structures there are two Trustees. For example,
in an Owner Trust structure, which is most common, the Notes, which are pure debt instruments,
are issued pursuant to an Indenture between the Trust and an Indenture Trustee, and the
Certificates, representing undivided interests in the Trust (although structured and treated as debt
obligations), are issued by the Owner Trustee. The Issuer (the Trust) owns the Receivables and
grants a security interest in the Receivables to the Indenture Trustee. Counsel to the Trustee
provides the usual opinions on the Trust as an entity, the capacity of the Trustee, etc.

Investors
The ultimate purchasers of the Securities. Usually banks, insurance companies, retirement funds
and other "qualified investors." In some cases, the Securities are purchased directly from the
Issuer, but more commonly the Securities are issued to the Originator or Intermediate SPE as
payment for the Receivables and then sold to the Investors, or in the case of an underwriting, to
the Underwriters.

Underwriters/Placement Agents
The brokers, investment banks or banks that sell or place the Securities in a public offering or
private placement. The Underwriters/Placement Agents usually play the principal role in
structuring the transaction, frequently seeking out Originators for Securitizations, and their
counsel (or counsel for the lead Underwriter/Placement Agent) is usually, but not always, the
primary document preparer, generating the offering documents (private placement memorandum
or offering circular in a private placement; registration statement and prospectus in a public
offering), purchase agreements, trust agreement, custodial agreement, etc. Such counsel also
frequently opines on securities and tax matters.

Custodian
An entity, usually a bank that actually holds the Receivables as agent and bailee for the Trustee
or Trustees.
Rating Agencies
Moody's, S&P, Fitch, IBCA and Duff & Phelps. In Securitizations, the Rating Agencies
frequently are active players that enter the game early and assist in structuring the transaction. In
many instances they require structural changes, dictate some of the required opinions and
mandate changes in servicing procedures.


Servicer
The entity that actually deals with the Receivables on a day to day basis, collecting the
Receivables and transferring funds to accounts controlled by the Trustees. In most transactions
the Originator acts as Servicer.

Backup Servicer
The entity (usually in the business of acting in such capacity, as well as a primary Servicer when
the Originator does not fill that function) that takes over the event that something happens to the
Servicer. Depending upon the quality of the Originator/Servicer, the need and significance of the
Backup Servicer may be important. In some cases the Trustee retains the Backup Servicer to
perform certain monitoring functions on a continuing basis.

True sale
Simply structuring the securitised vehicle to the bankruptcy remote does not ensure that its
assets will be scheduled from those of the seller in the event that the seller becomes the subject to
a bankruptcy proceedings.
The transfer of the underlying assets must be an absolute assignment, or true sale, of those
assets. The transfer of those assets must, therefore constitute a sale for accounting purposes to
assure that the securitisation vehicle will be entitled to future cash flows from the receivables
even if the seller becomes bankrupt.
STRUCTURAL DIAGRAM

Asset Backed Securitisation

ABS in its basic form consists of the pooling of a group of homogeneous loans, the sale of these
assets to special purpose company or trust, and the issue by that entity of marketable securities
against the pooled assets. The payment of interest and principal on the securities is directly
dependent on the cash flows arising from the underlying pooled assets. ABS is a process that
creates a series of securities which is collaterised by assets mortgaged against loans, assets leased
out, trade receivables, or assets sold on hire purchase basis or instalment contracts on personal
property.


Mortgage Backed Securitisation
The securitisation of assets historically began with, and in sheer volume remains dominated by
residential mortgages. The receivables are generally secured by way of mortgage over the
property being financed, thereby enhancing the comfort for investors. This is because mortgaged
property does not normally suffer erosion in its value like other physical assets through
depreciation.


BASIC STRUCTURES OF SECURITISATION

1) Par Structure

In a par structure, the consideration paid by the investors for the PTCs is equal to the pool
principal. The monthly principal repayment promised to the investors is the same as that to be
received from the underlying pool. However, the yield earned on the outstanding pool principal
is generally different (pool yield is usually higher) from that payable to the investors on the
balance PTC principal. Thus, the total cash flows receivable on the pool is higher than the
amount payable on the PTCs. This difference is termed as Excess Interest Spread. (EIS) While
this amount typically belongs to the Originator, its claim on the EIS is subordinated to that of the
PTC holders; thereby the EIS functions as a source of credit enhancement.



2) Premium Structure

In a Premium structure, the pool cashflows are discounted at the PTC yield and such
discounted value is paid by the PTC holders as consideration. Unlike par structures, in a
premium structure, instead of the principal, the cashflows receivable (from the pool) are matched
on a month on month basis with the cashflows payable (to the PTCs). The PTC yield is lower
than the pool yield, so the pool cashflows discounted at the PTC yield is higher than the pool
principal. This difference between the discounted cashflows and the pool principal is the
premium paid by the investors.


Pool Features Par Structure Premium Structure
Tenure 3 years 3 years
Pool Principal Rs. 1,000.0 mn Rs. 1,000.0 mn
Pool IRR 12.00% 12.00%
Pool Cashflows Rs. 1,185.2 mn Rs. 1,185.2 mn
Investor Yield 10.0% 10.0%
PTC Consideration Rs. 1,000.0 mn Rs. 1,029.6 mn
PTC Cashflows Rs. 1,155.6 mn Rs. 1,185.2 mn
Pool Pricipal=PTC Pool Pricipal=PTC
Principal Principal

EIS= Pool Cashflow- PTC
Cashflow
Rs. 29.6 mn Nil
CREDIT ENHANCEMENT

Credit Enhancement is provided to the SPV to cover the losses associated with the pool of assets.
The rating given to the securities issued by the SPV (PTCs) by a rating agency will reflect the
level of enhancement.
It accomplishes two goals-
a) It provides a source of funds to supplement payments on the underlying assets in the
event collection on the assets is insufficient to pay schedule interest and/or principal.
b) It allows the different tranches within the securitisation to achieve the desired ratings,
even in the cases where asset originator or the asset cannot support such a rating.

Credit Enhancement comprises of the following-


1) Opening Overdues

It is the amount due from the obligors, if realised from the obligors on any future date
shall be deposited by the servicer in the Collection and Payout Account and form part of
the Credit Enhancement.



2) Excess Interest Spread

Spread refers to the difference between the amount of interest received on the assets
and the amount of interest to be paid on the securities that have been issued by the SPV.
If there is excess spread, i.e more net interest income than is required to meet the
expenses of the SPV, than an element of reserve funds begin to accumulate. These reserve
funds can be used in the event of default by one of the assets in the pool.




3) Cash Collateral

It means the facility to be provided/ caused to be provided be the Cash Collateral
Provider, which shall be in the form of Fixed Deposits, which Cash Collateral shall
provide protection to any shortfalls in the monies available to meet the Investor payouts,
arising on account of differences between the billed amounts and the amount collected
towards the same, or on account of prepayment. The cash collateral is being in the form
of fixed deposits placed in the cash collateral account by cash collateral provider.


PROCESS OF SECURITISATION

STEP 1

The originator either has or creates the underlying assets,that is, the transaction
receivables out of which are to be securitised.


STEP 2

The originator selects the receivables to be assigned.


STEP 3

A special purpose entity is formed.


STEP 4

The special purpose company acquires the receivables, at their discounted value.


STEP 5

The SPV issues securities, either back to the originator who then takes it to the
market, or to investors either Debt type securities or beneficial interest certificates. These are
publicly offered or privately placed, as found conducive.



STEP 6

The Servicer for the transaction is appointed, normally the Originator.


STEP 7

The Debtors of the Originator or obligator are/ are not notified depending on the legal
requirements of the country concerned. Most likely, the Originator will try to avoid
notification.


STEP 8

The Servicer collects the receivables, usually in a Escrow Mechanism, and plays off
the collection to the SPV.


STEP 9

The SPV either passes the collections to the investors, or reinvests the same to pay
off to investors at stated intervals.


STEP 10

In case of any default, the Servicer takes action against the Debtors as the SPVs
agent.


STEP 11

Only when the small amount of outstanding receivables is left to be collected, the
Originator usually cleans up the transaction by buying back the outstanding receivables.


STEP 12
At the end of the transaction, the Originators profit, if retained and subject to any
losses to the extent agreed by the Originator, in the transaction paid off.

EXECUTIVE SUMMARY

With the capital market going through a lean phase and companies increasingly facing funding
problems, the focus is now on raising money through securitisation.

Securitisation, in its most basic form, is the repackaging of asset cash flows into securities. It
means legally isolating sources of cash flow from avoidable risk, and issuing debt backed by this
revenue. This debt can then be placed in the public-listed debt security market or privately.

The increasing focus on securitisation has been furthered by the announcement from the finance
ministry that the Government has plans to fund power companies through receivables due from
State Electricity Boards (SEB). Given the size of SEB dues owed to power companies running
into thousands of crores the deals, when they are through, could create a huge base of
securitised instruments. The National Housing Bank is taking the initiative so that housing
finance companies can raise money by issuing bonds backed by future loan receivables. And
with the capital market in dumps, it could be the answer for large corporations that are facing
funding problems.

However, the picture is not yet so clear and time alone will tell if Indian markets make the best
utilization of securitisation and reap rich benefits from it. But there is hope of great
improvements in the market place.

Worldwide, anything that can generate a cash flow can be securitised. If you can imagine an
asset that produces a cash flow, or can be made to produce a cash flow, it is probably supporting
an asset-backed security (ABS) somewhere right now.













PRACTICAL UTILITY OF THE PROJECT

The main purpose of conducting such type of study is to know the current scenario of the
Securitisation market in India. As securitisation is not so popular in Indian financial markets
instead of having benefits gained by the originator therefore an urgent attention was needed just
to know the causes. The process of securitisation is not known by most of the general public
therefore there is a need to explain its entire process.

























OBJECTIVES

The primary objective of the study is to analyse and study the concept of securitisation in detail.
As in the present scenario the organizations are facing the problems of raising funds and
securitization is one of the many possibilities to solve such problem.
Therefore my objective was to study the practical aspect of the structures of securitisation. As
different organisations follow different types of structures so it was important to find the reasons
for selection of a particular structure by an organization.


The following are the major objectives of my project:-
1) To understand the conceptual framework of the securitisation.
2) To understand the operational mechanism in practice.
3) To analyse the problems and prospects of securitisation in India.
4) How the originator is deriving the benefits out of securitisation.
5) Reasons why securitisation is not so popular in Indian Financial Markets.









RESEARCH & METHODOLOGY

As my project is Descriptive in nature therefore I have to mostly rely on the Secondary data
sources instead of primary sources. But I have included both Primary Data as well as Secondary
Data for the better understanding of the concept.


SOURCES OF DATA

1) Primary Data Collection
As there is very little source for the collection of the primary data in Securitisation
therefore I have very few Primary Sources.
a) Observation-
I critically examined the practicle aspect of the securitisation process. I
observed the working as how the securitisation process gets started and eventually
comes to completion.


b) Internal personnel-
I took help from the personnel of treasury department of the
Mahindra Finance for better understanding of he concept.


c) External personnel-
I had meetings with the employees of reputed credit rating
agencies such as FITCH and CRISIL. It had helped me in advanced understanding of
securitisation process and its practical applicability to the NBFCs.









2). Secondary Data Collection

a) Books-
I have referred to 2 books on securitisation by well-known authors.

Securitisation: A Primer By Arnab Chowdhury

Securitisation: A financial instrument of the new millennium By Vinod Kothari


b) Internet-
I have referred to various internet websites and forums for getting the
knowledge of my topic. Visiting the various companies websites which are dealing in
securitization.

c) RBIs
Latest Guidelines on Securitization
[Discussed in the Annexure below]

























DATA ANALYSIS
&
INTERPERTATION









DATA ANALYSIS & INTERPRETATION
DATA ANALYSIS
Analysis is the process of placing the data in an ordered form, combining them with the existing
information and extracting the meaning from them. In other words analysis is an answer to the
questions what message is conveyed by each group of the data which are otherwise raw facts
are unable to give meaning full information. A raw data become an information only when they
are analyzed and put in a meaning form.

INTERPRETATION
Interpretation is a process of relating various bits of information to existing information.
Interpretation attempts to answer well, what relation existing between the findings to research
objectives and hypothesis framed for the study in the beginning.













TABLE 6.1
Q.1 TYPE OF ACCOUNT TO OPERATE WITH BANK?

SL. NO ACCOUNT TYPE NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Saving Account 58 58%
2 Current Account 22 22%
3 Fixed Deposit 17 17%
4 NRI Account 13 13%

Analysis: From the above table it could be inferred that 58% of the customers are choosing
savings account and very few of about 13% prefer NRI Account.

Interpretation: Most of the respondents are preferring savings account. Presently the bank
offers varieties of account services to the customer.









CHART 6.1












58%
22%
17%
13%
Saving Account Current Account Fixed Deposit NRI Account
0
10
20
30
40
50
60
70
Account Type
Saving Account
Current Account
Fixed Deposit
NRI Account
TABLE 6.2
Q.2Facility Level of MAHINDRA FINANCE?
SL. NO FACILITY LEVEL NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Excellent 27 27%
2 Good 43 43%
3 Satisfactory 23 23%
4 Poor 7 7%
Total 100 100%

Analysis: From the above table it could be inferred that 43% of the customers are satisfied with
the service and quality of products of their bank. Only 7% of customers are says poor facility in
MAHINDRA FINANCE.
Interpretation: Most of the respondents say MAHINDRA FINANCE offering good facility to
its customer. But to the other end few people says the facilities are less.







CHART 6.2














27%
43%
23%
7%
Excellent Good Satisfactory Poor
0
5
10
15
20
25
30
35
40
45
50
FACILITY LEVEL
Excellent
Good
Satisfactory
Poor

TABLE 6.3

Q.3 MAHINDRA FINANCEs VALUE ADDED SERVICE?

SL. NO VALUE ADDED
SERVICE
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Senior Citizen 57 57%
2 Prepaid Cards 24 24%
3 Fixed Deposit 7 19%
Total 100 100%


Analysis: From the above table it could be inferred that 57% of the customers are using senior
citizen service and only 19% are using fixed deposit scheme.

Interpretation: Most of the respondents are utilizing the value added service as senior citizen
accounts. But rarely very few people are choosing recurring deposit account.




CHART 6.3














12%
57%
24%
7%
0
10
20
30
40
50
60
Young Star Senior Citizen Prepaid Cards Recurring Deposit
VALUE ADDED SERVICE
Young Star
Senior Citizen
Prepaid Cards
Recurring Deposit
TABLE 6.4

Q.4 PRODUCT RATINGS OF MAHINDRA FINANCE FROM OTHERS?

SL. NO PRODUCT
RATING
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Excellent 16 16%
2 Good 62 62%
3 Better 20 20%
4 Poor 2 2%
Total 100 100%


Analysis: From the above table it could be inferred that 62% of the customers rate MAHINDRA
FINANCE products as Good. Only 2% of the people Rate MAHINDRA FINANCE products as
Poor.

Interpretation: Most of the respondents are rating the products as good. Moderate peoples are
rating as excellent. Only few people in the customers are rating the MAHINDRA FINANCE
products as poor.






CHART 6.4











16%
62%
20%
2%
0
10
20
30
40
50
60
70
Excellent Good Better Poor
Product Rating
Excellent
Good
Better
Poor
TABLE 6.5

Q.5 REFERRING MAHINDRA FINANCE TO OTHERS?

SL. NO REFERRING
MAHINDRA
FINANCE
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Yes 76 76%
2 No 18 18%
3 Not Sure 6 6%
Total 100 100%


Analysis: From the above table it could be inferred that 76% of the customers are ready to refer
MAHINDRA FINANCE to others. Only 6% of customers are not sure what to do.

Interpretation: Most of the respondents are obviously ready to refer Mahindra Finance to their
friends, relatives and others. But few of them are not sure on this decision also some people are
straight forward in not referring Mahindra Finance to others.







CHART 6.5











76%
18%
6%
0
10
20
30
40
50
60
70
80
Yes No Not Sure
Referring Mahindra Finance
Yes
No
Not Sure
TABLE 6.6

Q.6 RELATIONSHIP WITH MAHINDRA FINANCE A/C OPERATIONS?
SL. NO MAHINDRA
FINANCE
ACCOUNT
OPERATIONS
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 < 1 Year 17 17%
2 1-5 Years 55 55%
3 5-10 Years 17 17%
4 >10 Years 11 11%
Total 100 100%


Analysis: From the above table it could be inferred that 55% of the customers are having
relationship with the bank for about 1-5 years. Only 11% of customers are having more than 10
years of relationship with Mahindra Finance.

Interpretation: Most of the respondents are satisfied with the service offered by Mahindra
Finance. Presently the bank has more customers who have the account with them for more than a
year and less than 5 years.




CHART 6.6












17%
55%
17%
11%
0
10
20
30
40
50
60
< 1 Year 1-5 Years 5-10 Years >10 Years
MAHINDRA FINANCE ACCOUNT OPERATIONS
< 1 Year
1-5 Years
5-10 Years
>10 Years
TABLE 6.8

Q. BEST INSURANCE PRODUCT IN MAHINDRA FINANCE?

SL. NO INSURANCE
PRODUCT
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Tax Saver 15 15%
2 Investment 20 20%
3 Security 5 5%
4 All the Above 60 60%
Total 100 100%

Analysis: From the above table it could be inferred that 60% of the customers choose the entire
insurance product for their benefits. Only 5% of the customers choose the insurance product
offered them security.

Interpretation: Most of the respondents are investing in MAHINDRA FINANCE for tax
saving, investment and security for their money. This shows that the customers believe
MAHINDRA FINANCE has a best insurance market in India.




CHART 6.8














15%
20%
5%
60%
0
10
20
30
40
50
60
70
Tax Saver Investment Security All the Above
INSURANCE PRODUCT
Tax Saver
Investment
Security
All the Above
TABLE 6.9

Q. OTHER MAJOR SERVICES IN MAHINDRA FINANCE?

SL. NO OTHER SERVICES
IN MAHINDRA
FINANCE
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Vehicle loan 16 16%
2 Home loan 54 54%
3 Personal loan 23 23%
4 Bond 7 7%
Total 100 100%

Analysis: From the above table it could be inferred that 54% of the customers feel the home loan
is the service other than the general service. Only 7% of the people prefer to Forex exchange.

Interpretation: Most of the respondents are utilizing the additional service of home loan
fascilities from MAHINDRA FINANCE. But only few people are utilizing the personal loan ,
bond and other services from MAHINDRA FINANCE.







CHART 6.9










0
20
40
60
80
100
120
Vehicle
loan
Home
loan
Personal
loan
Bond Total
1 2 3 4
PERCENTAGE OF RESPONDENTS 16% 54% 23% 7% 100%
NUMBER OF RESPONDENTS 16 54 23 7 100
A
x
i
s

T
i
t
l
e

Chart Title
TABLE 6.12
Q. AWARNESS AND SATISFACTION LEVEL OF VARIOUS LOANS?
SL. NO LOAN SCHEME NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Vehicle loan 8 8%
2 Personal loan 15 15%
3 Home loan 72 72%
4 SME Loan 5 5%
Total 100 100%

Analysis: From the above table it could be inferred that 72% of the customers are aware of the
Home Loan. Only 5% of the customers are not sure on the SME loan.

Interpretation: Most of the respondents are Aware about the home loan in Mahindra Finance.
But few customers are not so.









CHART 6.12













0
20
40
60
80
100
120
Vehicle
loan
Personal
loan
Home
loan
SME
Loan
Total
1 2 3 4
PERCENTAGE OF RESPONDENTS 8% 15% 72% 5% 100%
NUMBER OF RESPONDENTS 8 15 72 5 100
A
x
i
s

T
i
t
l
e

Chart Title
TABLE 6.13

Q. LOCKER FACILITY AVAILING CUSTOMER?
SL. NO LOCKER
FACILITY
PREFERENCE
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Business People 50 50%
2 Government Staff 30 30%
3 Bank Staff 13 13%
4 House Wifes 7 7%
Total 100 100%

Analysis: From the above table it could be inferred that 50% of the customers using locker
facility are business class people. Only 7% of the customers are house wifes using locker
facility.

Interpretation: Most of the respondents say they are utilizing the locker facility in Mahindra
Finance. The main players are business class people. Followed by government staffs and then
bank staffs.






CHART 6.13












50%
30%
13%
7%
0
10
20
30
40
50
60
Business People Government Staff Bank Staff House Wifes
LOCKER FACILITY PREFERENCE
Business People
Government Staff
Bank Staff
House Wifes
TABLE 6.14

Q. RELATIONAL SHIP BETWEEN BANKER & CUSTOMER?
SL. NO RELATIONSHIP
BETWEEN BANK
& CUSTOMER
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Good 13 13%
2 Moderate 58 58%
3 Better 9 9%
4 Poor 20 20%
Total 100 100%

Analysis: From the above table it could be inferred that 58% of the customers are have moderate
relationship with Mahindra Finance. Only 9% of the customers feel relationship between bank &
customer is better.

Interpretation: Most of the respondents are having a moderate relationship between the bank &
customer. But few customers are feeling it is better and some feel it is poor in relationship.





CHART 6.14














13%
58%
9%
20%
0
10
20
30
40
50
60
70
Good Moderate Better Poor
RELATIONSHIP BETWEEN BANK & CUSTOMER
Good
Moderate
Better
Poor

TABLE 6.15

Q. FIXED DEPOSIT INTEREST RATE SLAB OF MAHINDRA FINANCE FROM
OTHER BANKS?

SL. NO FIXED DEPOSIT
RATE
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 2- 3% 5 5%
2 3- 4% 27 27%
3 5- 10% 40 40%
4 Above 10% 28 28%
Total 100 100%

Analysis: From the above table it could be inferred that 40% of the customers are satisfied with
the interest rate slab. Only 5% of customers are not satisfied.

Interpretation: Most of the respondents are satisfied with the fixed rate slab with the bank.
Hence it is offering the interest rate at minimum level. Also few people are not aware of the
interest rate of fixed deposit in Mahindra Finance.



CHART 6.15














5%
27%
40%
28%
0
5
10
15
20
25
30
35
40
45
2- 3% 3- 4% 5- 10% Above 10%
FIXED DEPOSIT RATE
2- 3%
3- 4%
5- 10%
Above 10%

TABLE 6.16

Q. OPINION ABOUT THE CHARGES LEIVED BY MAHINDRA FINANCE?

SL. NO CHARGES LEIVED
BY MAHINDRA
FINANCE
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 High 26 26%
2 Moderate 64 64%
3 Low 10 10%
Total 100 100%


Analysis: From the above table it could be inferred that 64% of the consumers feel that the
charges are high comparatively from other banks. Only 10% of consumers are not satisfied in
charges levied by Mahindra Finance.


Interpretation: Most of the respondents are not satisfied the charges levied by Mahindra
Finance. Customers are expecting the charges to be reduced to get more benefit from the bank.









CHART 6.16























26%
64%
10%
0
10
20
30
40
50
60
70
High Moderate Low
CHARGES LEIVED BY MAHINDRA FINANCE
High
Moderate
Low

TABLE 6.17

Q. HOW DO YOU KNOW MAHINDRA FINANCE?

SL. NO HOW YOU
KNOW MAHINDRA
FINANCE
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Advertisements 20 20%
2 Friends & Relatives 61 61%
3 Awareness 18 18%
4 Direct Selling Agents 1 1%
Total 100 100%


Analysis: From the above table it could be inferred that 61% of the consumers are referred by
friends & relatives for the best service offered by Mahindra Finance. Only 1% of consumers are
came by direct selling agents.

Interpretation: Most of the respondents tell they are referred by their friends and relatives.
Where very few came by the advertisements and the awareness created by the bank. Very less in
count are generated by direct selling agents.






CHART 6.17



















20%
61%
18%
1%
0
10
20
30
40
50
60
70
Advertisements Friends &
Relatives
Awareness Direct Selling
Agents
HOW YOU KNOW MAHINDRA FINANCE

Advertisements
Friends & Relatives
Awareness
Direct Selling Agents





TABLE 6.18

Q. MOSTLY PREFFERED LOAN OFFERED BY MAHINDRA FINANCE?

SL. NO MOSTLY
PREFERRED
LOAN
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Personnel Loan 10 10%
2 Commercial Loan 8 8%
3 Housing Loan 72 72%
4 Educational Loan 5 5%
Total 100 100%

Analysis: From the above table it could be inferred that 72% of the consumers are choosing
housing loan

Interpretation: Most of the respondents prefer housing loan from Mahindra Finance. Only few
of the customers prefer education loan and other loans in Mahindra Finance













CHART 6.18






















10%
8%
72%
5%
0
10
20
30
40
50
60
70
80
Personnel Loan Commercial Loan Housing Loan Educational Loan
MOSTLY PREFERRED LOAN
Personnel Loan
Commercial Loan
Housing Loan
Educational Loan



TABLE 6.19

Q. IS MANAGER AVAILABLE FOR ANY CLARIFICATION?

SL. NO MANAGER
DISCUSSION
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Yes 68 68%
2 No 32 32%
Total 100 100%

Analysis: From the above table it could be inferred that 68% of the customers are satisfied since
the manager is available for any clarification. Only 32% of the customers says it is not followed
in Mahindra Finance.

Interpretation: Most of the respondents are satisfied with the clarification facility with manager.
But some customers feel not so.










CHART 6.19









68%
32%
0
10
20
30
40
50
60
70
80
Yes No
MANAGER DISCUSSION
Yes
No
TABLE 6.20

Q. OTHER SERVICE OUTLETS OF MAHINDRA FINANCE?
SL. NO OTHER SERVICES NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Yes 95 95%
2 No 5 5%
Total 100 100%

Analysis: From the above table it could be inferred that 95% of the customers are aware that
Mahindra Finance has other service outlet . Only 5% of the customers do not know there are any
branches.
Interpretation: Most of the respondents are aware that there are branches throughout the india.
Where we can see that many people are aware in the branch regarding other outlets.









CHART 6.20














95%
5
0
10
20
30
40
50
60
70
80
90
100
Yes No
OTHER SERVICES
Yes
No
TABLE 6.21

Q. DRAWBACKS/ PROBLEM WITHIN MAHINDRA FINANCE?

SL. NO CUSTOMER
SUGGESTION
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
1 Yes 86 86%
2 No 12 12%
3 Not Sure 2 2%
Total 100 100%


Analysis: From the above table it could be inferred that 86% of the consumers are suggesting
that there are drawbacks within ION. Only 12% of consumers are sure that there are no internal
problems in MAHINDRA FINANCE.


Interpretation: Most of the respondents tell that there are some internal problems and
drawbacks in Mahindra Finance. Where few people saythat no problem in Mahindra Finance.






CHART 6.21













86%
12 2
0
10
20
30
40
50
60
70
80
90
100
Yes No Not Sure
DRAWBACKS/ PROBLEM WITHIN MAHINDRA
FINANCE
Yes
No
Not Sure






FINDINGS OF THE SYUDY
















FINDINGS OF THE STUDY
58% of the respondents are opinion that the customers are choosing saving account in
Mahindra Finance.
43% of the respondents are opinion that the customers are satisfied with the service and the
quality of products in Mahindra Finance.
57% of the respondents are opinion that the customers are using senior citizen services in
Mahindra Finance.
62% of the respondents rated that Mahindra Finance products is good.
76% of the respondents are ready to refer Mahindra Finance to others.
55% of the respondents have relationship with the Mahindra Finance for about 1-5 years.
60% of the respondents are opinion that all the insurance products of Mahindra Finance are
beneficial.
72 of the respondents are opinion that they are aware of home loan product of Mahindra
Finance.
50% of the respondents are utilizing the locker facility in Mahindra Finance by business class
people.
72% of the respondents are opinion that the publicity of Mahindra Finance to the people is
done through friends & Relatives.
64% of the respondents are sure that the levied charges by Mahindra Finance are low.
72% of the respondents are opinion that the customers prefer Housing Loan from Mahindra
Finance.
68% of the respondents are satisfied with the manager availability for any clarification.
58% of the respondents are opinion that the customers have moderate relationship with
Mahindra Finance.
95% of the respondents are aware of the Mahindra Finance service outlets in other areas
50% of the respondents agree that customers have some drawbacks and problems in
Mahindra Finance.
40% of the respondents are satisfied with the interest rate slabs.
36% of the respondents are opinion that the immediate attention on any complaints.
71% of the respondents are opinion that they do not expect any more service from Mahindra
Finance.
INDIAN SECURITISATION MARKET

Issuance volume in the Indian securitisation market was Rs.36, 603crores in FY2012, a
growth of 15% over the previous fiscal. The increase in volumefollowing a continuous decline
for three yearswas on account of a 26% rise in securitisation of retail loans (both Asset-
Backed Securitisation or ABS, and Residential Mortgage-Backed Securitisation or RMBS,
cumulatively).
As per the Master Circular by the RBI for Lending to Priority Sector released in July 2011,
loans by banks to NBFCs no longer qualify as Priority Sector Lending (PSL); post this change in
regulation there was only one major way in which banks could meet their shortfall in priority
sector lending targets, viz., acquisition of compliant portfolios from NBFCs.
On the other hand, Originators (read NBFCs) motive in entering into these transactions was a
finer pricing, capital relief and tenure-matched funding, apart from keeping open an alternate
fund-raising channel. This led to a rise in transactions involving bilateral assignment of retail
loan poolsmainly including loans to Small and Medium Enterprises (SMEs) or Small Road
Transport Operators (SRTOs) and micro creditespecially during the last quarter of the year.
Bilateral assignmentsaccounting for around 75% of ABS and RMBS volume in India
continued to be the preferred route relative to conventional securitisation, given that these
transactions were not covered by RBIs guidelines of Feb 2006 on securitisation, thus making
them less restrictive for Originators.

WHY A COMPANY SHOULD DO SECURITISATION?

1) The cost of raising the funds through securitisation is always less than the cost of funds
raised through other sources.

2) Securitisation helps in raising funds at a rating higher than what is the actual rating of the
originator.

3) After securitisation the securitised assets (receivables) go off the balance sheet of the
originator. This is especially helpful in the banking industry which has to adhere to
capital adequacy norms.






SECURITISATION IN INDIA: OBSTACLES

There are many hindrances which are faced by the Indian Companies while having the
securitisation done in the Indian Market.
These Hindrances are the prime reasons for slow evolvement of securitisation in Indian Market.
Following are the most prominent obstacles of securitisation:-
1) Stamp duty on transfer of assets by originator to the SPV is as high as up to 13%
.
2) If PTCs are issued in the form of a receipt, it is not transferable by endorsement and
delivery; if PTCs are issued in the form of promissory note then it will attract Stamp
Duty.




CONCLUSIONS

The detailed study on the topic of securitisation and gaining the practical knowledge has helped
me in the better understanding of the topic.
It has helped me in the fulfilment of objects of my study. After completing the Internship now I
have the proper idea of Securitisation and its practical aspects.
Though retail loan securitisation improved in FY2012, the issuance volume in India continues to
remain subdued and concentrated among few Originators. Around 75% of the market in FY2012
was essentially bilateral loan pool trading, driven by the economics of priority sector lending
targets. It follows that the investor segment is largely banksmainly private sector and foreign
banks. Mutual Funds have mostly been absent from the securitisation market for a variety of
reasons, the latest being the unresolved issue of income tax authorities claim on taxing the
income from securitised instruments.














LIMITATIONS OF THE PROJECT

There were few limitations of the project which are as follows
1) Time constraint-
As the internship was about of only 45 days and the securitisation is a
very vast topic to cover therefore I had to complete the research in the prescribed time
only.



2) Lack of knowledge in general public-
As securitisation is a much specialised topic
therefore only few people had the thorough knowledge of the topic.



3) Confidentiality-
All the data and the terms and conditions included in the securitisation
transaction is kept confidential therefore it was very difficult as a researcher to find new
things.















SUGGESTIONS

The final guidelines on securitization and bilateral assignments are expected to result in a
significant decline in volume of bilateral assignments given the prohibition on credit
enhancements by Originators in these transactions13. The other key factors that will largely
shape the course of securitisation of retail asset loans going forward are the extent to which the
Nair committee recommendations are adopted and also the legal stance on the taxation of PTCs.
In addition to regulatory prescriptions, the pace of growth in loan book size among key players
would continue to be a basic determinant of level of securitisation activity




















BIBLIOGRAPHY

1) Securitisation: A Primer By Arnab Chowdhury

2) Securitisation: A financial instrument of the new millennium By Vinod Kothari

3) www.rbi.com

4) www.icra.com

5) www.indiaratings.co.in

6) www.vinodkothari.com