Professional Documents
Culture Documents
Khyati
Khyati
ON
Submitted by,
Khyati Jain
nd
MBA 2 semester/ Section “B”
Subject Code: 576322(76)
Session 2015-17
FACULTY OF MANAGEMENT
DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY
Approved by AICTE
(Disha Education Society)
Satya Vihar, Vidhansabha-Chandrakhuri Marg, Mandir Hasaud, Raipur(C.G.) 492007
1
DECLARATION
I the undersigned solemnly declare that the report of the project work entitled “A
DETAIL STUDY OF CREDIT POLICY OF SHRIRAM CITY UNION
FINANCE WITH REFERENCE TO RAIPUR CITY”, is based my own work
carried out during the course of my study under the supervision of Prof. Ruchi Gupta
I assert that the statements made and conclusions drawn are an outcome of the project
work. I further declare that to the best of my knowledge and belief that the project report
does not contain any part of any work which has been submitted for the award of any other
degree/diploma/certificate in this University or any other University.
Khyati Jain
Roll No.:5057615031
Enroll No.:AS2685
Section: “B”
2
CERTIFICATE BY INTERNAL GUIDE
This to certify that the report of the project submitted is the outcome of the project work
entitled “A DETAIL STUDY OF CREDIT POLICY OF SHRIRAM CITY
UNION FINANCE WITH REFERENCE TO RAIPUR CITY”
carried out by Khyati Jain bearing Roll No.: 5057615031… & Enrollment No.:… AS2685 Carried
by under my guidance and supervision for the award of Degree in Master of Business
Administration of Chhattisgarh Swami Vivekananda Technical University, Bhilai (C.G), India.
3
CERTIFICATE BY EXAMINERS
This to certify that the report of the project submitted is the outcome of the project work
entitled “A DETAIL STUDY OF CREDIT POLICY OF SHRIRAM CITY
UNION FINANCE WITH REFERENCE TO RAIPUR CITY”
carried out by Khyati Jain bearing Roll No.:……5057615031…… & Enrollment No.:…… AS2685…..
Carried by under my guidance and supervision for the award of Degree in Master of Business
Administration of Chhattisgarh Swami Vivekananda Technical University, Bhilai (C.G), India.
Name and Signature of Internal Examiner Name and Signature of External Examiner
Approved By
Dr. Reshma Shrivastava
Dean,
DIMAT
4
ACKNOWLEDGEMENT
The hard work and struggle and effort that we have made to complete this project give me immense
satisfaction. This project is incomplete without thanking the people who helped and guided me
throughout this project.
We acknowledge my debt to those who have contributed significantly to the project. Gratitude to who
have me the opportunity to do this project.
We express my deep sense of Gratitude to my guide Prof. Ruchi Gupta for this timely inspiration,
valuable guidance for me throughout this project and gave me valuable suggestion junction I would
like to thank Dr. Reshma Shrivastava for their kind co-operation and valuable suggestion till
the completion of this project.
We would like to thanks staff of SCUF for providing their co-operation. And most importantly their
guidance and support that made us do really well.
5
TABLE OF CONTENT
TABLE OF CONTENT
Contents Page No
Declaration by the student (i)
Certificate from the supervisor/Company (ii)
Certificate from internal guide (iii)
Certificate from Examiners (iv)
Acknowledgements (v)
Chapter 1. Introduction to the study 8
6
CHAPTER 1
CREDIT APPRAISAL:-
7
CHAPTER - 2
COMPANY PROFILE
Introduction.
SHRIRAM GROUP :-
The 50,000 Cr Shriram Group had its humble beginnings in the Chit Fund
business in 1974 in Chennai .Mr.R Thyagarajan, Mr.AVS Raja and Mr.T.Jayaraman were the
founders who ventured into these businesses. Not many in the financial services industry thought
at that time, this small Chit Funds business in Chennai would indeed be the foundation for the
financial conglomerate that Shriram is today. Shriram Group’s businesses strive to serve the
largest number of common people through its pioneering and customized financial services.
For nearly 4 decades the tireless efforts for facilitating financial access to small and
medium entrepreneurs through loans and chits has carved a niche for the Shriram Group in South
India.
Shriram City Union Finance Ltd. (Shriram City) is a major Group company that
deals with retail finance particularly targeting the unmet needs of entrepreneurs seeking
meaningful ways of living with dignity. However, the magnitude of company’s social and
economic impact on the community at large was not ascertained until this Social Accounting and
Audit (SAA) exercise was commissioned. SAA is a framework of accountability developed
voluntarily by an organization to define its alignment with its mission and to understand how it
has performed in relation to this mission. It guides the organization to understand the importance
of effectively measuring impact so that they can report on performance, account to stakeholders
and make the case for continued investment in their work.
Group 0f companies :-
Shriram transport finance.
Shriram city union finance.
Shriram general insurance.
Shriram life insurance.
8
Shriram chits pvt. Ltd.
Shriram capital.
Shriram property.
9
SHRIRAM GROUP ORGANISATIONAL STRUCTURE
10
ABOUT SHRIRAM CITY :-
Type of Company Shriram City is incorporated as a Public Limited Company. It is the retail
finance arm of the Shriram Group
An Overview
Shriram City is a deposit-accepting Non-Banking Financial Company (NBFC) registered with
RBI, offering:-
(i) Financing for two wheelers, appliances and other commercial goods, (“Product Finance”),
(ii) Pre-owned and new vehicle loans,
(iii) Personal loans,
(iv) Loans against gold, and
(v) Loans to the small enterprise finance segment.
11
Shriram City also leads the total Indian micro, small and medium enterprises market with 53 %
share
Shriram City leverages on the Shriram Group’s ecosystem to reach out to prospective customers
and the focus has been in maximizing its association with the “Shriram” brand name and the
synergies offered by the infrastructure, of other entities in the Shriram Group. Shriram City’s
customer base over the years has significantly comprised of customers of other entities in the
Shriram Group. The large customer bases and wide-spread network of business outlets of entities
such as, Shriram Transport Finance Company Limited, (one of the largest organized asset
financing NBFCs in India), and entities operating under the “Shriram Chits” brand, has
continued to provide Shriram City with a large platform of target Customers.
Shriram City has a strong foothold in south India. Over the last 25
years Shriram City has established a pan-India presence, with 911 branches as of March 31,
2012, across 17 states in India, with a significant presence in south India. As on March 31, 2012,
the total employee strength of Shriram City is 3,348. Shriram City has a strong concentration of
business in south India with 650 of our 911 branches as on March 31, 2012, located in the states
of Tamil Nadu, Andhra Pradesh and Karnataka 91% of its Assets under Management as on
March 31, 2012 were represented by loans originated in the states of Tamil Nadu, Karnataka and
Andhra Pradesh. However, it has continued to make efforts to expand and penetrate into other
regions in India.
TURNOVER:- The net profit of Rs. 17.31cr. For the quarter ended June 30,2015,
GROWTH RATE:- An increase of 17.31 percent over last year’s Rs. 10.31 cr.
MISSION:-
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Personal loan , small business loan
BRANCH OFFICES:-
CHATTISGARH-
Raipur.
MADHYAPRADESH-
Indore, Bhopal.
MAHARASTRA-
WEST BENGAL-
Kolkata
EMPLOYEE STRENGTH
Shriram city union finance is a pvt sector organization that offers services in financial
services with employee strength of 501- 1000.
Shriram foundation took the education a the key to economic prosperity & that such
education both at the primary school as well as the secondary school level should be
given to children ,especially girls. The foundation sought to achieve this objective
through several initiatives.
13
Running schools for the underprivileged children, give life, an aid program for deprived
children in remote areas of the country.
14
CHAPTER 3
LITERATURE REVIEW
15
insolvent. Unlike the historical banking panics of the 19th and early 20th centuries, the current
banking panic is a wholesale panic, not a retail panic. In the earlier episodes, depositors ran to
their banks and demanded cash in exchange for their checking accounts. Unable to meet those
demands, the banking system became insolvent. The current panic involved financial firms
'running' on other financial firms by not renewing sale and repurchase agreements (repo) or
increasing the repo margin ('haircut'), forcing massive leveraging, and resulting in the banking
system being insolvent
16
CHAPTER – 4
Methodology is the most essential for the research work. It is also called as main body or part of
the research format. In this chapter the researcher the have been described the research design the
method adopted for the sources of data, selections of subjects, selection of the test items, scoring
of the question, administration of the schedule and test items.
OBJECTIVES :-
PRIMARY DATA:
Data which is called by researcher , new things and fresh data from the selective sample
source.
SECONDERY DATD:
It means data that are already available. Data which is reused by researcher, that data is already
collected by other to the available sources.
My research is based on also secondary data , which is analyzed by someone else. When the
research utilized secondary data , then we have to look in various sources from where to obtain
us. In this cause we are not confronted with the problems, usually associate with the original data
, secondary may be published data or unpublished.
17
OBJECTIVES
OBJECTIVES :-
18
DATA COLLECTION
Research design:
As the research is about the lending process at SCUF and determining various
factors, Descriptive research and exploratory research methodology will be opted.
Descriptive research describes the lending process of SCUF . it also describes the
compliance relating to lending market that should be known to t5he stake holders.
The data used for the research would secondary .the secondary data would be
obtained with the help of company websites, internal reports, and discussion with senior
personnel in credit admin. Department
DATA COLLECTION
Company website.
Internal reports.
Verification reports.
Discussion with senior personnel in credit admin department.
DATA ANALYSIS
The data collected shall be analyzed with the help of excel in order to make pie charts, graph
etc.
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LENDING PROCESS AT SCUF
1. LOGIN STAGE
The files are the first sourced from the direct sales (DSA) and the
the direct sales team (DST) offices, from where the documents then come in SCUF
office for the initial minimum credit parameter (MCP)check here KYC norms ( Pan
card, residential adresss,years in business ,stability etc. ) 2year ITR and 6months bank
statement of primary banking are checked.
If files do not meet the MCP norms they are rejected and sent
back to the DSA with the pending document list. If the files are ok then credit
information bureau (INDIA) limited (CIBIL), fraud control unit and verification
reports are filed.
Once the necessary checks are done by the credit admin. Team
goes ahead with entering the necessary data in the eligibility sheet .i.e. the internal
excel sheet that help in the eligibility calculation of the customer .here KYCdetails,
customer liabilities (other loans if any) ,banking of all the business related accounts
and financial of previous 3 years are entered.
The objective of preparing the eligibility sheet is to determine
the maximum loan amount can be funded to the customer by analyzing the following.
1. The customer should have minimum average banking so that he is eligible to pay
the EMI.
2. The total sales, net profit, cash profit should have an up warded trend.
3. There should be no EMI bounces in the previous 6months.
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4. There should be no DPD’s in the CIBIL report.
Once the above norms are met the files is then
forwarded to the underwriters.
Here the underwriters reevaluate the documents
and eligibility sheet .they analyzed.
1. The repayment track of the customer is checked for EMI bounces .if bounces
are seen in the prev.6 months there is an outright of rejection of the file.
2. CIBIL reports are checked to see if there are any DPDS in the EMI payment
and if there is an overdue in the loan track.
3. Eligibility sheet is checked where in banking of the client is analyzed , if the
customer is more than amount is internally transferred is removed, this give a
clearer picture of the total credit amount has to match the total sales turnover of
the firm.
4. The client should have an average bank balance so that he is capable enough to
pay EMI if the loan is sourced.
5. If the applicant has any other business the financial are analyzed to check the
firm has a good performance.
If any of the above mentioned points are not met and donot meet the
company policy the file is rejected outright. But if all conditions are met the
underwriters go ahead and fix an appointment with the client for a personal
discussion.
PERSONAL DISCUSSION
21
financial ,etc are analyzed personal discussion helps the credit manager deciede
whether the customer should be funded or not.
In this stage the credit manger and the underwriter and the credit manger analyze
following;
i) Personal. (Integrity of customer & kyc was cross checked indirectly).
ii) Loan payment. (Integrity are checked)
iii) Business. (Capacity of customer is checked).
iv) Financial (customer firms balance sheet, gross profit, net profit,
debtors, stock days, creditors days are checked.)
v) Banking. (Customer credit and od are checked.)
2. OPERATION
If the personal discussion goes well and the credit manager is sure about
the customer’s integrity and capacity .Ago ahead is given for the loan to be processed.
The credit admin. team after the PD ,gets some important doc. Ready .these loans
documents are as below.
i) Sanction letter
ii) Deduction letter
iii) Application letter.
iv) Co-borrower letter.
v) Post dated cheques / ecs.
vi) Enterprise finance agreement.
KYC.
FINANCIAL/ BANKING
VERIFICATION DOCUMENTS.
PROPERTY PAPER S
22
LOAN DOCUMENTS.
All these above documents have to be self attested by the customers 7& also have
to be verified by the DSA and the DST by attesting stamp on the documents.
Once all documents are ok and pendency if any is resolved the operation team will
upload the case onto UNO system where the customer detail is entered. The loan
agreement no. for the customer is obtained after the case is disbursed on UNO as soon the
case is disbursed request mentioning the loan amount and the cheque payable location is
sent to the cheque print dept. of SCUF. on this request is processed by the cheque
printing team, the cheques will be respective axis bank branches .the cheque is send to
the customers and the acknowledgement is obtained on the cheque copy the files are
ready to be dispatched to Chennai.
3. DISPATCH
Once all the activities are completed and the customer gives an
acknowledgement on the receipt of the cheque , the dispatch entry is entered in UNO and
the dispatch no. is generated .after this the customer files are sent to the archival team in
Chennai.
This complete the entire lending process.
4. INTERNAL AUDIT
Once the files are disbursed by the operation team, they can be picked
up by the internal audit has to be done before files dispatched to Chennai .the internal
auditor randomly select the files for audit. The scope of this audit ensure that files are
being disbursed as per the credit policy of SCUF. The audit also serves as afeedback
mechanism for both credit as well as operation teams , so that improvements if any can
23
be implemented .an audit report is prepared at the end of each month , which has detail of
audit cleared files and discrepant files
One of the most important factor for any financial institution KYC plays a crucial role
in deciding where the customer can be funded or not .other document includes customer
financial credibility & repayment capacity .a eligibility calculation sheet is also prepared
for analysis purpose which will help in deciding the credit program that customer can be
funded under, the loan amount ,EMI & ROI.
Under business loan policy there are two programmes BL standard (loan is funded
on financial creditability) and banking surrogate (loan is funded basis of calculation
average banking balances)
Based on the documentation provided by the customer & findings of the eligibility
calculator, the credit team can decide the program that the customer should funded under.
Once the documentation eligibility calculations are verified the next important factor
is the personal discussion, here the credit officer will have to face personal discussion
with the customer.
a) It gives the credit officer an opportunity ton gauge the customer reactions to the
question being asked.
b) It helps in understanding whether customer readily & honesty reveals business/
banking / liability details or needs to be probed for the right answer
c) The body language and the interest level of the customer can also be understood
through the PD.
After the PD if credit officer is ok w.r.t all aspect of the case , the file will be
processed .in case pendency mail will be sent to the respective location for solution
and once they are rectified the file will be processed.
24
At times a loan request can also be cancelled, if customer is not happy with
SCUF TERMSA & CONDITIONS.
1 Business proof & residence proof Any one from the following documents .
Latest landline bill / mobile bill/ electricity bill
Valid passport
Valid driving license.
Gas card.
25
Latest property tax bill.
26
5 STABILITY PROOF Any one from the following documents
Post paid mobile bill
Electricity bill
Valid dl
Valid passport
Property tax bill.
Gas book
LIC premium receipt
Voter id
Sales tax certificate
Shop establishment certificate
TDS certificate
IT returns
27
FINANCIAL /BANKING:
Last 3 year ITR is required must carry the ward no. where it has been filed and also
the serial no. for filing difference between 2 ITR filing date has to be minimum 6 months
mandatory.
Other document required audited annual reports .tax audit report with annexure for
last v3year is required in the case where TO >=60 LACS.
Bank statement of latest 12 month of the customer primary banking should be
submitted. if more than 1 bank account there, then all bank account for the concern to be
obtained .customer having only saving account not to be considered
verification documents :
For the KYC documents provided by the customer name verifications are carried
out by authorize agencies on behalf of SCUF to authencate the document detail.
Details of the verifications documents are stated below.
i) CIBIL
ON the basis of pan card no. customer detailed can be check out .i.e
previous loans etc.
ii) RESIDENCE CONTACT POINT VERIFICATION
Residence CPV is the verification of the customer residence address
customer standard of living is known by this report.
iii) OFFICE CPV
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IV) FRAUD CONTROL
LOAN DOCUMENTS :-
SANCTION LETTER:-
Sanction letter is a document that has detail about the borrower all detail
listed in this letter should match with these documents submitted by the customer in the login
stage .This letter also enlist detail about the loan amount sanctioned to the customer ,the tenor of
the loan, ROI, processing charges ,pre installment interest ,payment charges ,cheques bounces
,late payment charges ,cheques swapping charges ,stamp duty charges. In case LAP and the EMI
payable by the customer EMI of SCUF hits on the 5th of every month.
Sanction letter has to be signed by the borrower and the credit manger of SCUF.
DEDUCTION LETTER:-
APPLICATION LETTER ;-
It is submitted by the customer who states detail about the document submitted by him while
applying for the loan printed on the customer company letter head, this letter is signed by the
customer.
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POST DATED CHEQUES AND ECS:-
Customer has the opt. for either for PDC or ECS. In case of PDC post dated EMI.
Cheques are signed and given by customer.
In this MICR code a/c no. effective date, tenure, installment amt. has to be
updated and this form is signed by the customer.
v) cancelled cheque:-
The cancelled cheque is send along ecs mandate form so that MICR code a/c
no. can be verified
Enterprise finance agreement is a booklet which is duly signed by SCUF and the customer,
this agreement contains all legal aspect that has to be followed by the customer. it is also has all
loan details , mortgage details.
30
FACTORS THAT LEAD TO REJECTION OF FILES;-
many SME apply for loan SCUF but not all files are selected and sanctioned with the loan
amount requested by the customer even before the underwrites recheck the files and the credit
manager go ahead with the personal discussion there are the rejected in login stage by t5he credit
admin team . the reason for the same could be KYC norms ,financial/banking norms not being
met
all the times can also be rejected after the personal discussion stage .case lead to the
rejection if the business activity not assigned at the time of visit, something suspicious found
during visit, customer comes out over aggressive and reactive on normal discussion ,if the office
set upon is in shady area or n area which could challenged for the collection . Here the main
reasons for rejection could be that underwriters and the credit manager are not satisfied with
customer answer in the PD or at the times the customers negotiations with the credit manger
regarding the EMI amount, ROI and the tenure.
The rejection of files may be due to many reasons and to understand reasons for this
scenario. I have analyzed 50 customer application files get rejected we can also observe common
traits for the rejection from the below analysis.
graphical representation has been used to explain reasons for the rejection as per the
analysis done on the 50 files it was found that the main reason for the rejection are due to
financial banking, CIBIL and policy norms being met .the financial norms not being met is a
major factor for the rejections.
31
15%
financial
33%
banking
27%
cibil
25% policy
lets look into further of the factors that lead to these rejections.
The below diagram gives a further breakup of financial that is one of the main reasons for
rejections.
32
20
18
16
14
12
10
0
CP NP DRS SALES T/O CRS DAYS GP
The following is detailed explanation for the reasons that lead to file rejection:
1. CASH PROFIT;
CP is very important aspect that is viewed in the financials of the
applicant as this gives the actual profit or the actual cash inflow after deducting all cash
expenses and adding all non cash expenses to the net profit of the firm. if there is a dipin
the cp of 5% or more in the previous 3 years the file is rejected.
2. NET PROFIT;
NP is obtained after deducting after all financial, administrative & selling
expenses of the firm from the gross profit of the firm. the value is obtained before all the
taxes and interest paid hence, it is important NP have an increasing trend .even there is a
dip in the dip in the 5%or more the file is rejected.
3. DEBTORS DAYS:
Debtors ratio measures how quickly cash is being collected from debtors
.the longer it takes for a company to collect, the greater the no. of days debtors.
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DEBTOR DAYS = DEBTORS / TOTAL SALES * NO OF DAYS (365)
if the debtor days for the firm is more than 120 days the file is rejected as it
clearly indicates that the firm cannot recover cash from the debtors quickly and hence it
can also be difficult for the firm to pay the EMI very month as the cash flows is very
slow.
4. SALES TURNOVER:
Sales turnover is expressed in monetary terms but can also be expressed
in terms of the total amount of stock or product sold.
if the turnover is shows a declining trend year on year then it is serious
concern and must be arrived in detail .we should have4 a justification a declining trend
and in case same time . if the turnover has a decline of more than 10 % in consecutive 3
years the files is rejected. but if only one year has a dip sale and firm has again increased
sales in the next year clarification can be asked from the same.
5. CREDITORS DAY:
CREDITORS DAYS RATIO MEASURES THE TOTAL NO. OF
DAYS THE FIRM TAKES TO PAY HIS CREDITOR
34
The below diagram gives a further breakup of banking:
BANKING
40
35
30
25
20
15
10
0
cheque bounce min. Bal. over utilaztion
t/onot equal to financial
negative bance transfers
35
The following is a detailed explanation for the reason that leads to
the file rejections;
1. CHEQUE BOUNCE.
if a firm bank a/c does not have sufficient funds to pays off the debts
it leads to cheque bounce a cheque bounce indicates that the does not maintain a
minimum cash balance ,hence the files are rejected as the customer must have
sufficient balance to clear EMI on the date of presentation.
2. MINIMUM BALANCE;
It is necessary that the customer maintains a
minimum bank balance.
3. OVER UTILIZATION;
Customer available for CC/DD facility .this facility has a limit i.e.
the customer the customer cannot exceed this limit .hence if it is not found
continuously over utilizes this facility in period of one year the file is rejected.
4. TURNOVER NOT EQUAL TO SALES:
Usually it is assumed that the customer business dealings are done
through banking and with the help of the same we try and establish the recent
turnover the company. Total turnover as per provisional will in turn reflect in 12
month banking assuming all payments are remitted to the account within stipulated
time frame. We also acquire the VAT returns wherever possible to establish the
recent sales figure. in rare case the business also has the cash proportion where these
basics cannot be applied therefore if the banking turnover does not support the
projected figures provide by the customer then it should be questioned and in case of
unsatisfactory explanation the case should be declined. the total sales should \be equal
to the total banking turnover. it can exceed the sales but if it is less than it should be
confirmed as cash transaction also happen.
36
The below diagram gives a further breakup of CIBIL:
30
25
20
15
10
0
dpd over due low score write off suit file
37
1. DPD :-
if continues DPD are seen in the CIBIL report the files rejected.
2. OVERDUE ;-
applicant should not have any over dues from any financer at the time of
SCUF loan offering.
3. LOW SCORE:-
if score is less than 700 is seen the files is rejected.
4. SUIT FILE.:-
IF CIBIL shows a loan status. as suit file , the file is rejected.
5. WRITEOFF;-
if CIBIL loan written off the files is rejected
16
14
12
10
0
DTI DSCR LISTED FIRM NEGATIVE PROFILE.
The following is detailed explanation for the reason that leads to file to rejection.
1. Debt to income:-
If the DTI is more than the turnover, the file will be rejected.
2. Debt services coverage ratio:-(LTV)
38
DSCR should be in between 0.85 to 1.10 if it is less than this ratio file is
rejected
3. Listed firm:-
The firm that has to be financed should not be listed firm.
4. Negative profile:-
If the customer is under negative profile as list as per SCUF
credit policy, the case will be rejected
For e.g.:- politician, lawyer, liquor shop owner, driver, beauty parlor
etc.
39
s.no. Company Delinquency percentage
40
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
HDB RELIGARE FINANCE DHFL SCUF
DELIQUENCY PERCENTAGE
The following analyses were done to on the delinquency rate for the above mentioned
companies.
risk appetite on delinquency vary bank to bank / financial institute organizations generally set
their delinquency parameter along with IRR are inception or every financial year as per business
demands high IRR means high risk.
Following are few reasons which determine the business delinquency from the perspective of
bank or financial institutes:-
External factors.
Internal factors.
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Economic slowdown and recession where customers looses their job or suffers heavy
looses in business.
Natural calamity or a n accident where customer or family member face a permanent
physically disability or illness where incurs major medical expenses.
Government policy changes interest rates and other loan terms.
Internal factors:-
Wrong assessment or an underwriting on loan can lead to the nonpayment of the EMI
from customer end.
Customer’s intentions of availing a loan for fraudulent activities lead to the delinquency.
customers faces a service3s issue with the bank or financial institution where he rebel
against his EMI payment or disown the responsibility of liability.
42
CHAPTER – 5
The main factor considered while sanctioning a loan are not only the banking, financial
statement of account, etc. but the integrity of the customer is of utmost importance in the
entire lending process.
Not all files that come in through the DSA and DST are approved and funded. Because of
many reasons the files that meet companies’ norms are funded with the loan requested by
customer.
I learnt that every company has a risk appetite because of which they are able to tale
certain risk while funding their customer .even SCUF has a risk appetite but looking at
delinquency percentage I do not feel that they have taken a good amount of risk while
funding their customer as this may have lead to decreasing their expected increase in
sales.
even if certain customer do not meet the norms / requirement of SCUF the credit manager
takes waiver for such cases and such customers are then funded with the loan amount
with the loan amount that was requested.
I also noticed that not all files rejected by SCUF, at times customer himself reject the
proposal given by SCUF .the reason may be better offering from competitors, customer
may not always agree with terms and conditions put forth by SCUF.
43
CHAPTER- 6
SUMMARY OF FINDINGS
SUMMARY OF FINDINGS:-
The main factor considered while sanctioning a loan are not only the banking, financial
statement of account, etc. but the integrity of the customer is of utmost importance in the entire
lending process. Not all files that come in through the DSA and DST are approved and funded.
Because of many reasons the files that meet companies’ norms are funded with the loan
requested by customer .I learnt that every company has a risk appetite because of which they are
able to tale certain risk while funding their customer .even SCUF has a risk appetite but looking
at delinquency percentage I do not feel that they have taken a good amount of risk while funding
their customer as this may have lead to decreasing their expected increase in sales .even if certain
customer do not meet the norms / requirement of SCUF the credit manager takes waiver for such
cases and such customers are then funded with the loan amount with the loan amount that was
requested. I also noticed that not all files rejected by SCUF, at times customer himself reject the
proposal given by SCUF .the reason may be better offering from competitors, customer may not
always agree with terms and conditions put forth by SCUF.
44
CHAPTER -7
SUGGESTIONS:-
SCUF have its own business loan policy defined for up to 20 lac. during my internship at
SCUF I noticed that some are also being financed are also being financed for more than
20 lacs ,hence the policy should also defines separate parameter for loan amount MORE
THAN 20 LACS.
Being NBFC a lot of paper work seen especially the documents that are taken from the
customer . these are then sent to archival team in Chennai once the loan is sanctioned .
but if there is a delinquent customer or if certain customer document has to be rechecked
, This proves to be very time consuming activity and chances of documents are getting
misplaced are high hence, SCUF should create server where back up i.e. soft copies of
the customer files are keep easy reference.
SCUF should promote their product on TV, business magazines etc. so that they are more
visible in the market .competition is increasing among loan provider moreover; the
internet is the best medium to spread the awareness of the company and its products.
Howsoever SCUF advt. is not wide spread on the internet as it should be .hence advt.
should made on sites like money control. , yahoo, finance etc. as it will help to gain the
attention of many.
The UNO software used by the operations team should be user friendly, as the details of
the customer entered in one page of the software has to be again manually in the pages
this is rather cumbersome task. Hence they should be an option added that would
automatically pull the data in the tab. this will help the operation team to finish the entries
at a faster speed.
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BILIOGRAPHY:-
WEBLIOGRAPHY:-
WWW.SHRIRAMCITY.IN
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