INTERNSHIP REPORT

ON
ESAF SMALL FINANCE BANK
NEDUMKANDAM
A project report submitted to Mahatma Gandhi University in practical
fulfilment of the requirements for award of the Degree of Master of Business
Administration

MASTER OF BUSINESS ADMINISTRATION

Submitted by
Adarsh Ravi
Reg no:223240010916

Under the guidance of

Dr. Wranton Perez

DEPARTMENT OF MANAGEMENT STUDIES

DC SCHOOL OF MANAGEMENT AND
TECHNOLOGY
VAGAMON
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 DECLARATION

I ADARSH RAVI, MBA Student of DC SCHOOL OF MANAGEMENT

AND TECHNOLOGY VAGAMON do hereby declare that the internship
report entitled on ESAF SMALL FINANCE BANK is a bonafide work under
the guidance of Dr. Wranton Perez in partial fulfilment award of the degree in
Master of Business Administration of Mahatma Gandhi University. I also
declare that this report has not been submitted to any other University or
institution for the award of any other Degree/Diploma and this represents my
independent work.

Adarsh Ravi
Reg no:223240010916

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 ACKNOWLEDGMENT

Primarily I would like to thank GOD for giving me all grace and assistance for
the successful completion of this internship.
I would like to thank DR. ELIZEBETH GEORGE the PRINCIPAL OF DC
SCHOOL OF MANAGEMENT AND TECHNOLOGY VAGAMON for the
support and encouragement that helped me to this internship.
I greatly acknowledge my project guide Dr. Wranton Perez for the support and
constant guidance throughout the internship.
I am also indebted to the management of ESAF SMALL FINANCE BANK
NEDUMKANDAM for giving me an opportunity to conduct the internship in
their prestigious bank.
I wish to express my sincere gratitude to Mr. SUBASH SOMAN (Manager) for
help rendered at all stages of my internship.
I also wish to thank all the customers, employees, and staffs of ESAF SMALL
FINANCE BANK for their valuable help and cooperation.
I sincerely thank all the faculty members of Department of management
studies, DC SCHOOL OF MANAGEMENT AND TECHNOLOGY
VAGAMON and MBA Department of MG UNIVERSITY KOTTAYAM.
Last but not the least I would like to thank my parents, friends and relatives for
their encouragement and motivation.

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 TABLE OF CONTENTS
SL CONTENTS PAGE
NO NUMBER

1. INTRODUCTION 6
1.1 VISION – MISSION – CORPORATE 7
OBJECTIVES
1.2 MANAGEMENT – BOARD OF DIRECTORS 7
1.3 MILESTONES 8-9
1.4 FUTURE PLANS OF THE ORGANIZATION 9
2.
PRODUCT AND SERVICE PROFILE 10-15

3. INDUSTRY PROFILE 16
3.1 AN OVERVIEW OF THE INDUSTRY –
BUSINESS PROCESS – CURRENT STATUS & 17-20
GROWTH OF THE INDUSTRY
3.2 MAJOR FIRMS – LEVEL & TYPE OF
COMPETITION – MARKET SHARE 21-24
3.3KEY DRIVERS OF THE INDUSTRY 25-27
3.4PROSPECTES & CHALLENGES IN THE 27-29
INDUSTRY

4. JOB PROFILE & EXPERIENCE 30

4.1 OVERVIEW OF JOB PROFILE AS AN 31
INTERN
4.2 DEPARTMENT – FUNCTIONAL AREA OF
THE INTERN 31
4.3 MAJOR DUTIES ASSIGNED –
DESCRIPTION OF SPECIFIC TASKS 32-33
4.4 YOUR EXPERIENCE ON APPLICATION OF
MANAGEMENT ELEMENTS 33-34
5. CONCLUSION 35
5.1 CRITICAL APPRAISAL OF THE
ORGANISATION STRATEGIES – POLICIES – 36-38
PROCEDURES
5.2 YOUR LEARNING EXPERIENCE 39

BIBILOGRAPHY 40

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 CHAPTER 1
ABOUT THE ORGANISATION

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INTRODUCTION
ESAF Small Finance Bank (hereinafter referred as “ESAF”, “the Bank”) is one
of the leading small finance banks in terms of client base size, yield on
advances, Assets under Management (AUM) growth rate, total deposit CAGR,
Net Interest Margin, loan Portfolio concentration in rural and semi-urban areas
and ratio of micro loan advances to gross advances. Headquartered in Kerala,
the Bank has a history of more than 25 years in catering to financially unserved
and under-served segments and is committed to promoting financial inclusion in
the country. The Bank’s business model focusses on the principles of
responsible banking, providing customer-centric products and services through
the extensive application of technology. As at March 31, 2021, the Bank had
operations in 19 states and 2 union territories, 550 branches, and served over 43
lakh customers. ESAF’s aim is to become India’s leading social bank that offers
equal opportunities through universal financial access and inclusion and
livelihood and economic development. To achieve this goal, the Bank follows
a social business strategy with a triple bottom line approach, emphasizing on
people, planet, and prosperity. The Bank has adopted various policies to
implement its triple bottom line approach, including an Environmental, Social
and Governance (“ESG”) policy. Pursuant to the ESG policy, it is committed to,
• The protection of the environment and ensuring sustainable development.

• Promoting financial inclusion and gender equality through specialized

financial services.

• Establishing a governance framework to ensure accountability,

transparency and compliance with internal and external ESG standard.

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1.1 VISION – MISSION – CORPORATE OBJECTIVES

VISION
“To be India’s leading social bank that offers equal opportunities for the whole
society through universal access and financial deepening, thus promoting
financial inclusion, livelihood and economic development as a whole.”

MISSION
“To provide responsive banking services to the underserved and un-served
households in India facilitated by customer-centric products, high quality
service and innovative technology.”

1.2 MANAGEMENT – BOARD OF DIRECTORS

Mr. P R Ravi Mohan Chairman

Mr. Kadambelil Paul Thomas Managing Director & CEO

Dr Joseph Vadakkekara Antony Non-Executive Independent Director

Mr. Thomas Jacob Kalappila Non-Executive Independent Director

Shri. Vinod Vijayalekshmi Vasudevan Non-Executive Independent Director

Shri. Ravi Venkatraman Non-Executive Independent Director

Smt. Kolasseril Chandramohanan Non-Executive Independent Director

Ranjani
Shri. Ajayan Mangalath Gopalakrishnan Non-Executive Nominee Director
Nair
Shri. John Samuel Non-Executive Nominee Director

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1.3 MILESTONES
YEAR MILESTONES

2012 • ESAF completes two decades of social service.

• Rated mfR3 by CRISIL Rating.

2013 • MF Transparency has awarded an official seal of transparency

for transparent pricing.
• K Paul Thomas, CMD becomes the Director of MFIN.
• Selected as service provider for Mahatma Gandhi Pravasi,
Suraksha Yojana by government of India.

2014 • Rated mfR2 by CRISIL Ratings.

• Received ‘NBFC – MFI’ license from RBI.
• Launches Ultra Poor Program in Jharkhand.
2015 • ESAF launched Lahanti institute of Multiple Skills of
Jharkhand.
• Rated A – by Brickwork rating a premier rating agency.
• ESAF quarterly newsletter ‘Lahanti’ wins NiB award among
corporate journals among Indian.
2016 • ESAF won Inclusive Finance India award by ACCESS
ASSIST
• K Paul Thomas, CMD wins dhanam marketing man of the
year 2015.
• Graded MFI 1 by care ratings.
• Crossed 1 million & 20 billion loan portfolio.
• ESAF received Indywood CSR Excellence award.
2017 • ESAF launches ESAF small finance bank, the first bank from
Kerala since independence.
• ESAF won banking excellence award from chamber of Indian
micro small & medium enterprise.
• ESAF celebrated 25 years of social service.

2018 • ESAF Small Finance bank received RBI approval for NRI
operations.
• Govt. of India picks ESAF for Atal Pension Yojana.
• ESAF Small Finance Bank opened 100 new retail banking
outlets.

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 2019 • ESAF Small Finance Bank Launches ‘HUMANOID ROBOT’.

2020 • ESAF Small Finance Bank opens 500 new retail banking
outlets.
2022 • ESAF Small Finance bank opens 500 new Retail Banking
Outlets.

1.4 FUTURE PLANS OF THE ORGANIZATION

The future plans of ESAF Small Finance Bank are,
▪ ESAF Small Finance Bank expects normalcy in business from July, may
list as early as September.
▪ ESAF bank to shift focus to SME lending & supply chain finance for
future growth.
▪ To pursue national and international funds available for development of
sustainable finance products, training and capacity building.
▪ Building awareness and participation to environmental protection, climate
change risk mitigation and compliance among staff, customers and other
stake holders, to encourage them to adapt environment-friendly lifestyle.
▪ To promote sustainability through financial services creating long term
value, setting branch level and department level targets on sustainable
banking and monitoring them regularly.
▪ To report using global reporting standards for comprehensive
sustainability reporting.
▪ To communicate the sustainability strategy and results to key
stakeholders including investors, customers, project partners,
Government, media etc.
▪ To train, equip and strengthen involvement of staff in social and
environment sustainability initiatives so as to enhance their performance.
▪ Establishing tie-ups with institutions, organisations and manufacturers
involved in sustainable development through products & services.
▪ Partnering and associating with State & Central Government Institutions,
NABARD and other institutions for developing a Sustainable Banking
culture in the banking sector.
▪ To pursue national/international partnerships/network memberships to
synergise and work together for SDGs and Sustainable Banking priority.

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 CHAPTER 2
PRODUCT AND SERVICE PROFILE

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 PRODUCT/ SERVICE PROFILE
➢ Financial Services
➢ Social services
➢ Environmental services
Financial services
For meeting the financial bottom line, we have addressed the needs of our
clients by developing appropriate products through a series of processes. On the
service part, we have introduced innovations like door-to- door services,
according to the convenience of the clients. ESAF Small Finance Bank has
registered healthy financials ever since its inception and has grown at 90%
Year-on-Year in the last year, much above the industry average. The following
are some loan products developed by us, after understanding the customer
requirements.

• Sanitation loans
• Water loans
• Micro-energy loans
• Ultra poor microfinance loan
• Home improvement loans
• Education loans

i. Micro loans

Micro loans are provided to individuals without being secured by

collateral. In order to be given a loan an individual must be part of sub-
groups, which normally comprises five to ten peoples. Three to five sub-
groups combine to form a “Sangam”. Target customers for our micro
loans are women in unserved and underserved households in India.
The established lending institutions generally cover salaried or self-
employed professionals who have a steady source of income or work in
an organised sector. Microfinance benefits the people who are involved in
profession such as fishery, artisans, constructions work, vendors, small
entrepreneurs etc. These individuals generally work in unorganised
sectors and live in remote villages or slums in urban areas.

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 ii. Liability Product or Deposits
Liability products of the bank comprise of current accounts,
savings accounts, fixed deposits and recurring deposits. The bank also serves
segments like HNIs, corporate entities , sole proprietorship, children, farmers,
trust associations, societies and clubs, non- resident Indians (NRIs), micro loan
customers and senior citizens, and offers personalized banking services
including doorstep banking and other differentiated product.

iii. Retail Assets

ESAF has been expanding its portfolio of retail loan products. The
target customers are salaried individuals, the self- employed, businesses and
customers who have graduated from micro loans. The bank sources customers
for retail loan through sales executives, dealers and direct sales agents on a
walk-in business correspondents. The retail loan portfolio includes housing
loans, Loan against Property, Gold loans, Auto loans, Personal loans, clean
energy loans, lease retail discounting and educational loans.

iv. Agricultural loans

The bank targets individual farmers and joint borrowers engaged in
agriculture and allied activities, such as dairy farming, fishery, animal
husbandry, poultry farming, bee keeping, sericulture, Agri infrastructure, Agri
processing Units, and Agri ancillary activities for its Agri lending portfolio.
The product are focused to meet the financing needs of farmers in agriculture
and allied activities includes term loans, diary development loan, Farmer
Producer Organisation (FPO) finance , KCC and Agri gold loan, third party
products and other offers. ESAF also provides various other products and
services. It distributes third-party life and general insurance policies,
government pension products (Atal Pension Yojana and the National Pension
System), mutual funds and undertakes sale of point of sale (POS) through the
referral method. The bank provides foreign exchange services, which includes
currency exchange and outward and inward remittances, Bharat Bill Payment
System services, money transfer services and safe deposit locker services. In
addition, it provides depository services to the retail and institutional segment.

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 v. Micro, Small and Medium Enterprises (MSME) &
Corporate Loans
The MSME and corporate loan portfolio of the bank has been growing. The
target customers for the MSME and Corporate loans are MSMEs, NBFCs, MFIs
and existing micro loan customers who want to grow their businesses. Apart
from the working capital loans and term loans targeted at small and micro
enterprises, the bank is also expanding its supply chain finance by partnering
with fintech/ tech platforms to source more customers and other web-based
platforms that facilitate financing/ discounting of trade receivables of MSMEs.

Social Services
The Organization has set social targets for each of its branch network on the
following indicators,
• Reaching the poor
• Reducing the poverty levels
• Reaching rural clients
• Access to toilets
• Access to water& sanitation
• Reaching out of persons with disabilities
• Improvement in housing
• Promoting health insurance

a) Progress Out of Poverty Index (PPI)

PPI is a tool used to track the poverty status of the clients. The data collected is
validated through random checks conducted by the internal audit and the R&D
teams. The service quality is verified through telephone enquiries and
household visits.

b) Livelihood Support Services

ESAF provide livelihood support services to the client by-
• Organising skill training programs
• Creating marketing avenues to sell their products.
• Linking them to government schemes

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 c) Healthcare Service

Apart from owning two hospitals in the rural areas of Palakkad, we

have initiated other activities like AROGYAM Project, AROGYA
MITHRA, Medical Camps and Welfare measures for the physically
challenged.

d) Child Care Centres

ESAF offers educational support to the tribal children in Jharkhand.
We provide systematic value-based education to 1600 plus children in 37
Child Care Centres in Jharkhand.
For children of our Sangam members and staff, we offer scholarship programs
and for children in Government schools we encourage their reading habits by
sponsoring newspapers.
e) ESAF Mangalya Nidhi
A special scheme to offer wedding assistance of Rs 50,000 to the daughters of
the Sangam members (up to 25 deserving members).

Environmental Services
They observe environmentally significant days and distribute organic /
clean energy products to our members. We support them by offering convenient
loan products.
Launching organic product
ESAF along with Adat Farmers Service Co-operative launched the
‘Jaivam Amrutham Organic Matta Rice’ cultivated in the Kole fields of Adat
Panchayath.
Loans for promoting energy efficient products.
• Solar lamps
• Water purifiers
• Energy efficient cook stoves
Oorja Kiran
Oorja Kiran program was organized with the support of Energy
Management Centre, Kerala Government. The program was initiated for
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creating awareness among the general public and equipping them in managing
all forms of energy. It also aims to promote energy efficiency and energy
conservation by developing new sources of energy as well as novel energy
technologies.
Other environmental incentives
• Promoting bio-gas plant
• Promoting organic farming
• Financing Farmer Producers Organisation
ESAF has organised a funding ecosystem to support the FPOs
based on the stages in their life cycles.

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 CHAPTER 3
INDUSTRY PROFILE

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3.1 AN OVERVIEW OF THE INDUSTRY – BUSINESS
PROCESS – CURRENT STATUS & GROWTH OF THE
INDUSTRY
The Indian banking system is one of the largest and most complex in the world,
with more than 100 scheduled commercial banks and more than 96,000 branches.
It has undergone a significant evolution since the country’s independence in
1947, and today it plays a vital role in the economic development of India. In the
early days following independence, the Indian banking system was primarily
dominated by a few state-owned banks, with limited banking services and limited
reach, particularly in rural areas. However, in the decades that followed, the
Indian government, in consultation with the Reserve Bank of India (RBI),
implemented a series of economic and financial sector reforms that led to a
significant expansion of the banking system.
One of the most important changes in the Indian banking system
was the nationalization of 14 major banks in 1969 and an additional six banks in
1980. This brought nearly 80% of the banking system under government control
and expanded banking services to many rural and unbanked areas. Additionally,
the government introduced policies that encouraged the growth of regional rural
banks and co-operative banks, further increasing the reach of the banking system
in rural areas. In the 1990s, the Indian government liberalized the banking sector,
allowing private and foreign banks to operate in India. This led to increased
competition and the entry of several new players into the market. The introduction
of technology, such as internet banking and mobile banking, has also improved
the efficiency and reach of the banking system.
the Indian banking system has undergone significant evolution over
the years and today plays a vital role in the economic development of the country.
While it has several advantages such as wide reach, strong deposit base, and
technological advancements, it also faces several challenges like low credit to
deposit ratio, high NPAs, and limited access to formal banking services. The
government and the Reserve Bank of India (RBI) are taking various measures to
address these issues and further improve the Indian banking system.

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BUSINESS PROCESS
In the United States, banks are regulated by the Federal Reserve. Banks must
retain at least 10% of each deposit on hand but can lend out the other 90% as
loans. The reserve requirement applies to all types of banks that are licensed to
operate in the United States, and they can hold the reserve as a deposit in the local
Fed bank or as cash in the vault.
The actual reserve requirement is determined by the Federal Reserve Board
of Governors. When the Fed reduces the reserve requirement for member banks,
it is implementing an expansionary monetary policy, which increases the amount
of money in the economy. On the other hand, when it increases the reserve
requirement, it is implementing a contractionary monetary policy that reduces
liquidity. All the Fed’s member banks must be insured with the Federal Deposit
Insurance Corporation (FDIC).

Types of Bank Accounts

1. Savings account
A savings account is a bank account that a customer can deposit
money in that they do not need right away, but that is available for withdrawal
whenever needed. The bank loans out the money to borrowers and charges
interest on the amount of credit disbursed.
2. Checking account
checking account allows customers to access their deposited funds
with ease, and they can use it to make their financial transactions such as paying
bills. A customer can access the funds by writing a check, using a debit card to
withdraw money or make payments, or by setting up automatic transfers to
another account.
3. Certificate of deposit
A certificate of deposit is a bank account that holds a fixed amount of money for
a defined period such as six months, one year, two years, etc. It pays a fixed
interest rate on the amount held.

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Types of Banks
1. Commercial banks
Commercial banks are the most common type of bank. They provide
various services such as providing business loans, accepting deposits, and
offering basic investment. Products to both individuals and private businesses.
Commercial banks also offer other financial services such as global trade
services, merchant services, insurance products, retirement products, and treasury
services. They make money by providing business loans to individual and
corporate borrowers and earning interest income from them, and by charging
service fees.
2. Credit unions
A credit union is a type of bank that is open to a specific category of
people who are eligible for membership. It is member-owned and is operated by
the members based on people helping people. Traditionally, credit unions served
either residents of a local community, members of a church, employees of a
specific company or school, etc.
The ownership structure of credit unions allows them to offer more
personalized and lower-cost banking services to their members. Due to their small
operating size, credit unions may pay higher interest rates than banks, and
customers can build a better relationship with the banking staff. On the downside,
the credit unions’ operations are limited, and the customer’s deposits are less
accessible.
3. Investment banks
Investment banks are banks that provide corporate clients access to
the capital markets to raise funds for expansion. They help companies raise funds
in the stock market and bond market to finance their expansion, acquisitions, or
other financial plans. They also facilitate mergers and acquisitions by identifying
viable companies for acquisition that meet the buyer’s criteria.
Investment banks make money by offering advisory services to
corporate clients, trading in the financial markets, and representing clients in
mergers and acquisitions. Some examples of large investment banks in the U.S.
include Merrill Lynch, Goldman Sachs, J.P. Morgan, and Bank of America.

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CURRENT STATUS AND GROWTH OF BANKING
INDUSTRY
The Indian banking system consists of 12 public sector banks, 22 private
sector banks, 44 foreign banks, 43 regional rural banks, 1,484 urban cooperative
banks and 96,000 rural cooperative banks in addition to cooperative credit
institutions. As of September 2022, the total number of ATMs in India reached
217,308 out of which 49.81% are in rural and semi urban areas.
As of November 4, 2022, bank credit stood at Rs. 129.26 lakh crore (US$
1,585.09 billion). As of November 4, 2022, credit to non-food industries stood at
Rs. 128.87 lakh crore (US$ 1.58 trillion). In 2020-2022, bank assets across sectors
increased. Total assets across the banking sector (including public and private
sector banks) increased to US$ 2.67 trillion in 2022. In 2022, total assets in the
public and private banking sectors were US$ 1,594.51 billion and US$ 925.05
billion, respectively.
RBI has decided to set up Public Credit Registry (PCR), an extensive
database of credit information, accessible to all stakeholders. The Insolvency and
Bankruptcy Code (Amendment) Ordinance, 2017 Bill has been passed and is
expected to strengthen the banking sector. Microfinance industry’s gross loan
portfolio (GLP) by 10% in FY22 to Rs. 2.85 trillion (US$ 36.42 billion).
As of June 01, 2022, the number of bank accounts—opened under the
government’s flagship financial inclusion drive ‘Pradhan Mantri Jan Dhan
Yojana (PMJDY)’—reached 45.60 crore and deposits in the Jan Dhan bank
accounts totalled Rs. 1.68 trillion (US$ 21.56 billion).
Rising income is expected to enhance the need for banking services in rural areas,
and therefore, drive the growth of the sector. India is the world's largest market
for Android-based mobile lending apps, accounting for 82% of all online lenders
worldwide. India currently has 887 active lending apps.
The digital payments revolution will trigger massive changes in the way
credit is disbursed in India. Debit cards have radically replaced credit cards as the
preferred payment mode in India after demonetisation. In November 2022,
Unified Payments Interface (UPI) recorded 7.30 billion transactions worth Rs.
12.11 trillion (US$ 148.63 billion).

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 3.2 MAJOR FIRMS – LEVEL & TYPE OF
COMPETITION – MARKET SHARE

MAJOR FIRMS
ESAF Small Finance Bank is a standalone small finance bank and is not a
subsidiary or a part of any major financial firm or conglomerate. It is owned and
managed by ESAF Small Finance Bank Limited, which is a publicly listed
company on the Indian stock exchanges.
However, ESAF Small Finance Bank has formed partnerships with various
companies and organizations to expand its reach and offer a range of products
and services to its customers. Some of the major partnerships of ESAF Small
Finance Bank include:
1. Mastercard: ESAF Small Finance Bank has partnered with Mastercard
to offer its customers a range of debit and credit cards with enhanced
security features and global acceptance.
2. Equifax: ESAF Small Finance Bank has partnered with Equifax, a
leading credit bureau, to offer credit reports and credit scores to its
customers.
3. Fincare Small Finance Bank: ESAF Small Finance Bank has a
partnership with Fincare Small Finance Bank to offer co-lending products
to customers.
4. Suryoday Small Finance Bank: ESAF Small Finance Bank has a
partnership with Suryoday Small Finance Bank to offer customers access
to both banks' products and services.
5. Bharat Bill Payment System: ESAF Small Finance Bank is a member of
the Bharat Bill Payment System, which allows customers to pay their
bills online through a single platform.
These partnerships help ESAF Small Finance Bank to leverage the strengths of
other companies and offer a wider range of products and services to its
customers.

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LEVEL & TYPE OF COMPETITION
ESAF Small Finance Bank operates in a highly competitive market and faces
competition from various players. Here are some of the types of competition
that ESAF Small Finance Bank may face:
• Other Small Finance Banks: ESAF Small Finance Bank competes with
other small finance banks that offer similar financial services to their
customers. Some of the notable small finance banks in India are Ujjivan
Small Finance Bank, Equitas Small Finance Bank, Fincare Small Finance
Bank, etc.
• Large Public and Private Sector Banks: ESAF Small Finance Bank
also competes with large public and private sector banks that have a
wider reach and offer a variety of banking services. Some of the popular
public and private sector banks in India are State Bank of India, ICICI
Bank, HDFC Bank, Axis Bank, etc.
• Non-Banking Financial Companies (NBFCs): ESAF Small Finance
Bank also faces competition from NBFCs that offer similar financial
services like microfinance loans, gold loans, etc. Some of the popular
NBFCs in India are Bajaj Finserv, Muthoot Finance, Manappuram
Finance, etc.
• Cooperative Banks: ESAF Small Finance Bank also faces competition
from cooperative banks that offer banking services to their customers.
Cooperative banks are usually established for the benefit of their
members, who are also their shareholders. Some of the popular
cooperative banks in India are Saraswat Bank, Apna Sahakari Bank,
Cosmos Bank, etc.
• Payment Banks: ESAF Small Finance Bank also competes with payment
banks that offer digital payment services and remittance services to their
customers. Payment banks are licensed by the Reserve Bank of India
(RBI) to offer payment services, but they cannot offer credit services.
Some of the popular payment banks in India are Paytm Payments Bank,
Airtel Payments Bank, Fino Payments Bank, etc.
• Fintech Companies: ESAF Small Finance Bank also faces competition
from fintech companies that provide financial services using technology.
Fintech companies offer various financial services like digital payments,
investment management, lending, insurance, and wealth management.
Some of the popular fintech companies in India are Paytm, PhonePe,
Zerodha, Policy Bazaar etc.

22
 • Regional Rural Banks (RRBs): ESAF Small Finance Bank may also
face competition from regional rural banks that provide banking services
to rural areas. RRBs are established with the objective of providing credit
and other financial services to the rural population. Some of the popular
RRBs in India are Baroda Gujarat Gramin Bank, Ellaquai Dehati Bank,
Narmada Jhabua Gramin Bank, etc.
• Credit Cooperatives: ESAF Small Finance Bank may also face
competition from credit cooperatives that provide credit and other
financial services to their members. Some of the popular credit
cooperatives in India are Indian Farmers Fertiliser Cooperative Limited
(IFFCO), KRIBHCO, National Agricultural Cooperative Marketing
Federation of India (NAFED), etc.
• Microfinance Institutions: ESAF Small Finance Bank may also face
competition from microfinance institutions (MFIs) that provide
microcredit and other financial services to the poor and low-income
households. MFIs focus on providing financial services to those who are
excluded from the formal banking sector. Some of the popular MFIs in
India are Bandhan Bank, Ujjivan Small Finance Bank, Bharat Financial
Inclusion Limited (BFIL), etc.
• Foreign Banks: ESAF Small Finance Bank may also face competition
from foreign banks that operate in India. Foreign banks offer a wide
range of banking services and cater to various customer segments. Some
of the popular foreign banks in India are Standard Chartered Bank,
Citibank etc…

MARKET SHARE
ESAF Small Finance Bank Ltd incorporated in 2016 in Thrissur,
ESAF Small Finance Bank is one of the leading small finance bank in terms of
AUM CAGR, client base etc. Along with serving the underserved and unserved
population, ESAF also distributes third party life and general insurance,
government pension products, serves NRI customers by offering NRE and NRO
bank accounts. NRI deposits were brought into operation in June 2018 and the
total deposits from NRIs stood at 16.98% and 10.83% at 30 September 2019
and 31 March 2019, respectively.
As of November 30, 2019, the bank has 403 branches, 38 ultra small branches
and they serve around 3.73 million customers. And as of 31 May 2021, the bank
had 550 branches, 327 ATMs, 421 customer service centres, 12 business
correspondents and 158 banking agents, spread across 21 states and 2 union
23
territories. The amount of customers served also increased to 4.68 million
customers.
IPO Synopsis
ESAF Small Finance Bank filed its DRHP worth Rs.997.78 crore with
SEBI. The IPO consists of a fresh issue worth Rs.800 crore and an offer for sale
worth around Rs.197.78 crore by its various shareholders. In the OFS, PNB
Metlife will offload shares worth Rs.21.33 crore, Bajaj Allianz Life will offload
shares worth Rs.17.46 crore, the promoter will offload shares worth Rs.150
crore and PI Ventures is planning on selling shares worth Rs.8.73 crore while
John Chakola will offload shares worth Rs.26 lakh. The company is also
considering a pre-IPO placement of Rs.300 crore, which will reduce the same
amount from the fresh issue.
The book running lead managers to the issue are Axis Capital, Edelweiss
Financial Services, IIFL Securities and ICICI Securities. The net proceeds are to
be used for augmentation of bank’s Tier-I capital base in order to meet the
bank’s future capital requirements. The promoters of the bank are ESAF
Financial Holdings and Kadambelil Paul Thomas, who hold a 69.40% stake in
the bank, currently.
FINANCIAL STATUS OF ESAF SMALL FINANCE BANK
Bank ROE Total Income PAT Capital Adequacy GNPA %
(In Rs bn) ratio
AU SFB 22.30% 57.5 1,171 23.40% 2.70%

Equitas SFB 12.70% 36.1 384.2 24.20% 3.70%

Ujjivan SFB 0.30% 31.2 8.3 26.40% 7.00%

Jana SFB 7.80% 27.3 84.3 19.30% -

Utkarsh SFB 9.40% 17.3 111.8 21.90% 3.70%

ESAF SFB 8.70% 17.7 105.4 24.20% 6.70%

Fincare SFB 11.80% 13.8 113.1 29.50% 3.46%

Suryoday 0.90% 8.8 11.9 51.50% 9.40%

SFB
Capital SFB 9.50% 5.6 40.8 19.80% 2.08%

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3.3 KEY DRIVERS OF THE INDUSTRY
The banking industry is up for major transformation in the
upcoming years. It has transformed up to a great extent, but the technological
impact is going to bring a major transformation in the upcoming years. Not
just technology: changing customer behaviour, digital transformation, and
growing regulatory requirements have made it obvious for the banking
industry to look for a major evolution. It won’t be wrong to claim that the
evolution of the banking industry is also a reflection of changing customer
behaviour. The mode of access or collecting information has significantly
changed over the years. To be specific, customers are more interested in
digital communication, which makes things simple yet effective. It is
incredible to witness the technological or digital enrichments in core banking
functionalities and operations.
1. Digital Transformation
Upgrades in digital technology have started offering varieties of
modes for interacting with the customers in modern times for the banking
industry. To be specific, the modes like internet banking or mobile banking
have significantly changed the way of interaction with the banks and
accessing the transaction details. Moreover, high-end analytics tools are
being used to make the customer experience more engaging than ever.
It is obvious thus to bring changes in banking regulations or to
make it more technology oriented. It is not just that the industry has
transformed from functional perspectives; it has witnessed the major
operational transformation as well. Along with customer user experience,
back-office systems are being modified and enhanced.
2. Fintech Service Providers
Fintech providers are certainly going to be the key business
drivers in the banking industry. Their role is going to be even more
impactful. There should be no surprise about this upon observing the way
these technologies have competed with the usual ways of delivering financial
services.
Though it is still an emerging concept for the banking industry in
remote parts but looks established in major sectors, it promises a lot from
future perspectives. Fintech can indeed be claimed as one of the hottest
banking industry trends at present.

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3. Business and Revenue-Boosting Models
The banking industry outlook is getting more digital technology
oriented. Innovation in digital technology has enriched customer experience
through a high-end user-interface. The fintech companies are emphasizing
preparing roadmaps based on the same technology. Data management tools
and analytics tools are being used and going to be extensively used to enrich
sustainability in the banking sector.
The smooth performance and customer engagement in the
banking sectors of modern days are said to be due to the advanced process
optimization. In other words, there is a significant transformation that has
occurred in terms of the operation mode of the global banking sector. The
level of enhancement of core banking like vital models have managed to
deliver superior business goals. In other words, it can be claimed as the
prime revenue driver for banks. Leveraging digital technology in this
context, the emphasis is being given towards the development of up-to-the-
minute business scope. Ultimately, a streamlined process helps deliver a
better customer experience — the immediate business scope of such helps
the customers or clients in taking immediate business decisions.
4. Changing the Scenario from a Lender’s Perspective
A lot has been already discussed regarding the evolution of
customer behaviour over time. At the same time, liabilities of the lenders
about the economic challenges of the banks are going to be the critical
factors. The risk factors confronted while deciding whether to grant or deny
loans have been decisive. Functional models of the banks and other financial
institutions have been transformed as well. Scenarios are being tried to be
changed through the introduction of creative ideas like instant payment
schemes. However, there is still no alternative to limiting the occurrences
involving greater financial risks.
5. Efforts to Minimize the Risk factor
The compulsion of a borrower to address the possible threats is a
key factor in analysing for getting it well about their efficacy to pay back the
loan amounts. Financial service providers have a great role to play in this
context. They are the people ultimately who have to have thorough
knowledge regarding the ability of clients. Undoubtedly, they have been the
business drivers for financial companies. But, with transforming scenarios,
these business drivers’ financial services have to transform as well. Upon
observing the regular modes of the functionality of the banking industry, the

26
emphasis has always been giving towards sustainability and enduring
customer relationships. To ensure that the business does not get affected and
the relationship remains similarly endured, banks should come up with new
products or loan payment models, where the financial threats remain
nominal.
6. AI Being the Key Driver
Because data and technology have traditionally been the bank
performance, drivers, concepts like AI in banking are obvious to be the
game-changer. AI is certainly going to streamline the banking procedures in
a great way. Expanding the scope of automation, technology can indeed
make the process more effective and productive at the same time. With
automation, it is obvious for the entire process to be accomplished in a cost-
effective fashion. All that the banks have to ensure is that the privacy of
customer data is thoroughly secured with them.
7. Cloud Computing
The impact and acceptance of cloud computing in the banking
industry are very much evident. The rate of migration over the cloud
platform among the banks and financial organizations, even at remotest parts
or small towns has significantly grown. Successfully integrating all the units
and segments of a bank or financial institution, and streamlining the data
access, has been phenomenal all the way. Naturally, it is growing at a bigger
scale and in a very encouraging way, is unsurprising.

3.4 PROSPECTES & CHALLENGES IN THE

INDUSTRY
Prospects available to banking sector;
Despite of Various challenges there are prevailing so many opportunities that
empower banking business.
▪ Offering new services
Banking sector provides so many new services and trending
methods for banking transaction such as e-banking, funds transfers,
electronic bill payments. These services reduce transactions time and are
easy to access. These transactions provide banking sector new avenues to
achieve growth.

27
 ▪ Introducing payment banking
Payment bank is a new type of bank introduce by RBI. These
banks can’t accept more deposits from consumer but provide services like
ATM, Debit Cards, Credit cards and mobile banking to customers. These
banks accept utility bills from public. They can’t issue loans and cards to
public. These banks provide fast services rather than traditional banking.
▪ Digital literacy
Indian government introduced National Digital Literacy mission
with a mission to encourage digital literacy skills in India by 2020.this step
will help to educating the rural public to understand the benefits, functions
and procedure followed by different banks.
▪ Competitive advantage
By adopting e-banking banks can get competitive advantage over
other financial competitors. Reductions of operational cost by using e-
banking, Access to new areas, strong customer relationship are example of
these benefits some benefits.
▪ Untouched rural market
In rural segment about 70% of population is not aware about
banking transactions. This sector can become. big opportunities for public or
private banks. These banks should introduce their services to rural people
and connect with new consumer and can capture a big part of financial
market.
▪ Product differentiation
Indian banks strengthen themselves by providing different services
to their customers. By attending consumer preferences banks can improve
their earnings and reduce their cost. Banks can provide different services as
online banking facilities, payment banking, user payment interface, easy
norms for loans, less formalities for banking proceedings.
▪ Retail lending
Indian market has shifted from traditional place to online stores.
Online trades improve banking because mode of payment is either by cards
or online through different payment apps that enhance banking transactions.
Paytm, PayPal, Forecharge, Mobi Kwik are some example of payments apps.
Some online stores have their own account for transact with consumer that
improve banking business.
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Challenges faced by the banking industry
Indian banking sector achieved a new height in pace of development from pre
nationalization era to till now. But still some factors that challenge the banking
sector and become hindrance in the growth of banking sector. Some challenges
faced by Indian banking system are as follows;
➢ Lack of Knowledge
There is little knowledge of banking operations in rural sector of
India. People are not aware about the procedure followed by banking system.
They have a little knowledge about services and facilities provided by banks.
Due to this reason mostly, people can’t avail the services rendering by this
sector and this become a major problem for rural banking sector.
➢ Non-performing assets
According to RBI Financial Stability Reports 2017 Indian Banking
Sector Bad loans amounted to approx. 10 lakhs crore which is greater than 137
small countries of world. In all Public Sector Banks about 75% of their lending
is bad loans and this becomes major issue for banking sector industries.
➢ Cyber Threats
In India out of total banking transaction 95% are transacted in cash.
With the increased use of information technology, internet, smartphone
Cybercrime becomes the major threat for Indian banking system. Banking
sector should take initiatives to control these Cybercrime.
➢ Competition by other financial institutions
Today every business survives by providing different and quality goods
and services to their customer in competition world. Banking sector also faced
thrill competition by other financial institutions that provide their services on
easy norms in comparison to the banks. They provided loans on less interest rate
with less security norms. So, the customer shifts their attention to other
institutions for their financial requirements. And banking sector is becoming
low growth sector due to low profitability and productivity.
➢ Inadequate Infrastructure
In many areas of rural segment there is no proper infrastructure for
banking institutions. There is no proper space for working of banks and any
other facilities and resources that are necessary for adequate operations of
banking system.

29
 CHAPTER 4
JOB PROFILE & EXPERIENCE

30
4.1 OVERVIEW OF JOB PROFILE AS AN INTERN
The main objective of doing internship is to gain exposure and
practical experience in the skills possessed by them. Internship in marketing
department helps the intern to understand about the application of marketing
principles and concepts to real world business situations, marketing planning,
budgeting etc. It also helps the interns to understand about the plans, policies,
procedures, and practices followed by the organization under marketing sector.
So that interns will get clear idea about what are the main sections which may
come under marketing in the department.

4.2 DEPARTMENT – FUNCTIONAL AREA OF THE

INTERN
Internship in marketing department helps the interns to
understand the application of the marketing principles and concepts in the real
world of business marketing planning, product placement, visibility, new
product launch, budgeting etc. It also helps the intern to understand about the
plans, policies, procedures and practices followed by the organization under
marketing sector. The intern will get a clear idea about what is the areas that
comes under marketing department.
Main objectives of doing internship under marketing department;
• To understand the marketing structure of the organization.
• To analyse the strength, weakness, opportunities and threat of marketing
department.
• To understand what are the challenges faced by marketing managers
inside corporates.
• Identify and define the common or unique business terminology used at
the worksite.
• Produce high quality documents utilizing Word, Excel, Access or
PowerPoint.
• Identify methods for promoting an e-commerce business.
• Analyse the customer service practices and attitudes in the organizational
culture.
• Apply your selling philosophy and report of the results and insights
gained.
• Analyse how prices output levels and profits are determined.

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4.3 MAJOR DUTIES ASSIGNED – DESCRIPTION OF
SPECIFIC TASKS
DUTIES AND RESPONSIBILITIES
During the period of internship, I was assigned various tasks
which have helped me understand the day-to day working of the Finance
Department. Due guidance from the Marketing executives have helped me
accomplish the works assigned to me.
➢ SWOT Analysis
I was asked to prepare the SWOT analysis of the company. I completed the task
by collecting information from past organizational study reports and from the
interactions with the heads of various departments.
➢ Voucher Checking
Verified various Vouchers of the company with respective bill attached to it.
And annual reports of different financial years are compared.
➢ Assisting the Operations manager and Gold officer
I assisted in the overall operations and sales activity. I did the various activities
relating to the accounts like current account, Savings account, NRI account,
Life Insurance (LI), Gold Loan, Fixed Deposit.
➢ Personal loan documentation and PL processes
KYC (Know your customer) was collected Aadhar card and Pan card are
verified. Cibil score, updated salary slips, and bank statements are verified (3
months’ salary slip and 6 month updated bank statements and cibil score must
above 650).
➢ Customer Request Management
KYC (Know your customer) was collected Aadhar card and Pan card are
verified. Cibil score, updated salary slips, and bank statements are verified (3
months’ salary slip and 6 month updated bank statements and cibil score must
above 650). Learned about customer management process and how to solve
various bank related issues of the customer. Eg; Phone number updating.
➢ Customer Calling
Called customers and inquired about the satisfaction of the banking services and
seeked information about the using of net banking, maintaining minimum
balance etc…
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 ➢ Field wise marketing
Brochures were distributed and various other things like stepney covers are also
distributed as a part of marketing. And I got an idea about the marketing process
of ESAF Bank.

4.4 YOUR EXPERIENCE ON APPLICATION OF

MANAGEMENT ELEMENTS
• Strategic Planning
Market Analysis: Banks conduct market research to understand customer needs,
competitor strategies, and market trends.
Setting Objectives: Clear marketing objectives are established, such as
increasing market share, expanding into new markets, or launching new
financial products.
• Organizational Structure
Marketing Departments: Banks have dedicated marketing departments
responsible for designing and executing marketing campaigns.
Cross-functional Teams: Collaboration between marketing, sales, and other
departments ensures a unified approach to customer acquisition and retention.
• Leadership and Team Management
Effective Leadership: Bank managers provide direction and support to
marketing teams, ensuring alignment with overall business goals.
Team Development: Continuous training and skill development for marketing
professionals are crucial for adapting to changing market dynamics.
• Risk Management
Compliance: Ensure that marketing practices adhere to banking regulations,
including consumer protection and data privacy laws.
Reputation Management: Monitor and manage the bank's reputation by
addressing customer complaints and negative feedback promptly.
• Customer Relationship Management (CRM)
Database Management: Maintain a comprehensive customer database for
personalized marketing efforts.

33
Customer Segmentation: Segment customers based on demographics, behavior,
and preferences to tailor marketing messages.
• Innovation and Adaptation
Adaptive Marketing: Banks adapt marketing strategies in response to changing
market conditions and emerging technologies.
Product Development: Innovate by creating new financial products and services
that meet evolving customer needs.
• Communication and Branding
Brand Management: Develop and maintain a strong brand image that
communicates trustworthiness and reliability.
Multichannel Marketing: Utilize various marketing channels, including digital
platforms, social media, email marketing, and traditional advertising, to reach a
wider audience.
• Ethical Considerations
Ethical Marketing: Ensure marketing practices are ethical and transparent to
build trust with customers.
Social Responsibility: Engage in socially responsible marketing campaigns that
align with the bank's values and corporate social responsibility initiatives.
• Resource Allocation
Budgeting: Allocate financial resources for marketing campaigns, advertising,
and promotions.
Technology Investments: Invest in marketing technologies (MarTech) for data
analysis, customer relationship management (CRM), and automation.
• Performance Measurement
Key Performance Indicators (KPIs): Monitor marketing KPIs like customer
acquisition cost (CAC), customer lifetime value (CLV), and return on
investment (ROI).
Data Analytics: Use data analytics to gain insights into customer behaviour and
preferences, enabling data-driven marketing decisions.

34
CHAPTER 5
CONCLUSION

35
5.1 CRITICAL APPRAISAL OF THE ORGANISATION
STRATEGIES – POLICIES – PROCEDURES
To meet the varying funding needs of our customers, we offer holistic financial
coverage through our lending activities, including Auto, Gold, Agricultural, and
Housing Loans. Through the Micro-Recurring Deposit Scheme, we enable them
to save on a regular basis. Their also catalyse their entrepreneurial spirit by
serving them through MSME loans, helping them start their own business
ventures.
Key strategies of ESAF Small financial bank includes.
➢ Geographic Reach
ESAF Small Finance Bank has a strategy of expanding its presence in rural
and semi-urban areas where banking services are often limited. They aim to
set up branches, banking outlets, and business correspondents in these areas
to provide banking facilities to the underserved population.
➢ Product Offering
The bank focuses on designing and offering a range of products and services
that cater to the specific needs of their target customers. These may include
basic savings accounts, current accounts, fixed deposits, recurring deposits,
microloans, small business loans, and other financial products that address
the financial requirements of individuals and small businesses in rural and
semi-urban areas.
➢ Technology Adoption
ESAF Small Finance Bank is committed to promoting financial literacy and
awareness among its target customers. They undertake various initiatives to
educate customers about the benefits of formal banking, saving habits, and
responsible borrowing. These initiatives may include financial literacy
programs, training workshops, and community engagement activities.
➢ Partnerships and Collaborations
ESAF Small Finance Bank may form strategic partnerships and
collaborations with other organizations, including government agencies,
non-governmental organizations (NGOs), and microfinance institutions
(MFIs), to expand its reach and better serve its target customers. These
collaborations may involve sharing resources, expertise, and knowledge to
promote financial inclusion and deliver comprehensive financial services.

36
POLICIES
These are the main policies following by the ESAF bank.
➢ Know Your Customer (KYC) Policy
ESAF Small Finance Bank would have a KYC policy in line with regulatory
requirements. This policy would define the bank's procedures for customer
identification, verification, and due diligence. It would outline the documents
and information required from customers and the steps taken to ensure
compliance with anti-money laundering (AML) and counter-terrorism financing
(CTF) regulations.
➢ Information Security and Data Privacy Policy
Given the importance of protecting customer data and maintaining information
security, ESAF Small Finance Bank would likely have a policy that addresses
these aspects. This policy would outline measures to safeguard customer
information, protect against data breaches, and ensure compliance with relevant
data protection laws and regulations.
➢ Code of Conduct and Ethics Policy
ESAF Small Finance Bank is expected to have a code of conduct and ethics
policy that sets out the expected behaviour and ethical standards for its
employees. This policy would guide employees on matters such as integrity,
confidentiality, conflict of interest, and professional conduct.
➢ Human Resources (HR) Policy
ESAF Small Finance Bank would have HR policies in place to govern various
aspects of employee management, including recruitment, performance
evaluation, training and development, employee benefits, and grievance
handling.
PROCEDURES
Various procedures following by the ESAF Small Financial Bank are;
➢ Loan Application and Approval Procedure
When a customer applies for a loan, ESAF Small Finance Bank would have
procedures to follow, including the application process, evaluation of
creditworthiness, assessment of loan eligibility, and approval criteria. These
procedures may involve verifying income documents, conducting credit checks,

37
evaluating collateral (if applicable), and following internal risk assessment
guidelines.
➢ Transaction Processing Procedure
ESAF Small Finance Bank would have procedures to ensure smooth and secure
transaction processing. This includes procedures for depositing and
withdrawing funds, transferring money, issuing, and cancelling cheques, and
handling electronic transactions. These procedures typically involve verification
of customer details, authorization checks, and adherence to applicable
regulatory guidelines.
➢ Risk Management Procedure
ESAF Small Finance Bank would have procedures to identify, assess, and
manage various risks it faces. These procedures may include guidelines for
credit risk assessment, operational risk monitoring, liquidity management, and
market risk mitigation. They would also cover procedures for compliance with
regulatory requirements and adherence to internal control mechanisms.
➢ Security and Fraud Prevention Procedure
ESAF Small Finance Bank would have procedures to ensure the security of
customer data and prevent fraud. These procedures may include protocols for
information security, data encryption, access controls, regular security audits,
and fraud detection mechanisms. They would also encompass guidelines for
customer authentication, transaction monitoring, and reporting suspicious
activities.
➢ Customer Service Procedure
ESAF Small Finance Bank would have procedures in place to handle customer
queries, complaints, and requests. These procedures may include a designated
customer service department or helpdesk, defined escalation processes, and
protocols for resolving customer issues in a timely and satisfactory manner.

38
5.2 YOUR LEARNING EXPERIENCE
TASK 1: Voucher Checking
I was able to understand different vouchers and how to verify different vouchers
such as debit voucher, credit voucher, supporting voucher, journal voucher etc.
and got a clear picture about the financial statements.
TASK 2: Assisting the Operations manager and Gold officer
I learned about the Savings account, Current account, NRI account, Life
insurance, gold loan, Fixed deposit etc.
TASK 3: Personal loan documentation and PL processes
Learned how to process the personal loan documentation and the verification of
various documents for confirmation. And learned about KYC (Know your
customer).
TASK 4: Customer Request Management
Learned about the customer management process and how to solve various bank
related problems of the customers like customer phone number updating. KYC
was collected and Aadhar and pan card are verified.
TASK 5: Field wise marketing
During the field wise marketing I got a clear understanding about the marketing
process of ESAF small finance bank. I engaged in marketing activities include
distribution of brochures and the distribution of the stepney covers as a part of
the marketing.
TASK 6: Customer Calling
After communicating with customers, I came to know about the various aspects
like Compliance and Record Keeping, Data Collection and Analysis,
Personalized Assistance, Convenient Access to Services, Efficient Problem
Resolution etc. Through customer calling I got a clear idea about the various
customers of ESAF small finance bank.
TASK 7: SWOT Analysis
Through conducting the SWOT analysis, I learned about the various internal
strengths and weakness and external opportunities and threats of the ESAF
Small Finance Bank. And formulate various policies and solutions.

39
 BIBILOGRAPHY
• Impact of Brand Awareness and Intentions by Prabha R S
• Research Methodology by C.R.Kothar
• Methodology of Educational Research by Lokesh Koul
• Bank Marketing by Dr. S.M. Jha
• Bank Marketing Strategies: An Indian Perspective by Namrata
Sandhu, Dilpreet Singh
• Principles of Marketing by Philip T. Kotler, Gary Armstrong

Websites
• https://www.esafbank.com/
• https://indianexpress.com/
• https://www.esafbank.com/about-us/
• https://en.wikipedia.org/wiki/ESAF_Small_Finance_Bank
• https://www.facebook.com/ESAFSmallFinanceBank/events

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