A

PROJECT REPORT

ON

PROCEDURE ON FINANCING OF TWO-WHEELER LOAN,

FOR

CENTURION BANK OF PUNJAB LTD

BY

SNEHA S. SALGAONKAR

PROJECT GUIDE

Mrs. VIJAYA KOLEKAR

IN PARTIAL FULFILMENT OF 2 YEARS FULL TIME COURSE

MASTERS IN BUSINESS ADMINISTRATION

(AUTONOMOUS)

VISHWAKARMA INSTITUTE OF MANAGEMENT

PUNE-411048

ACKNOWLEDGEMENT

It s a great privilege that I have done project in such a well &organized & diversified

organization .I am very grateful to all those who helped and supported me in completing

the project.

First of all I would like to thank Mr.Renny Joseph (Branch Manager) for giving me an

opportunity to work as summer trainee in Centurion Bank of Punjab Limited &also I

would like to thank to all the staff members for their cooperation &help given by them.

Their experiences & feedback kept me on track and helped me produce much better

results.

I am also thankful to our Director, Mr. Sharad Joshi and my Project guide Mrs.Vijaya

Kolekar for helping me in completing the project.

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

indirectly in project.

CONTENTS

Sr. No TITLE PG. NO

1. EXECUTIVE SUMMARY 01

2. GENERAL INTRODUCTION 02

3. OBJECTIVE 04

4. COMPANY PROFILE 05

5. INTRODUCTION TO THE PROJECT 10

6. RESEARCH METHODOLOGY 43

7. DATA COLLECTION 45

8. LIMITATIONS 49

9. CONCLUSION 50

10. RECOMMENDATIONS 51

11. BIBLIOGRAPHY 52

EXECUTIVE SUMMARY

This report is on the topic Procedure of two-wheeler Loans. The project was carried

out at Centurion Bank of Punjab under the esteemed guidance of Mr. Renny Joseph.

In the present world, every person wants to own the luxuries of life, but due to non-

availability of finance everyone is not able to do so. Hence some apply for loans and thus

comes the need for financial institutions to lend various services to the people.

The reason for selecting particular bank is that, It has been among the earliest

banks to offer a technology enabled customer interface that provides easy access and

superior customer service. Centurion Bank of Punjab ltd. has a nationwide reach through

its network of 243 branches and 395 ATMs. The bank aims to serve all the banking and

financial needs of its customers through multiple delivery channels, each of which is

supported by state-of-art technology architecture.

The entire process of sanctioning or rejecting a loan involves a number of processes.

This study involves the various processes involved during the sanctioning or rejection of

a loan.

Affordable interest rates and easy loans section by banks and a financial

institution has increased the demand for Two-Wheeler loan in India.

GENERAL INTRODUCTION

Loan Industry Profile

A loan is an arrangement between a lender and a borrower. The lender gives

money, property, or other asset to the borrower and the borrower agrees to repay the

money, with interest, at some future point in time. There is usually a predetermined time

for repaying the loan and generally the lender bears the risk that the borrower might not

repay the loan. There are many different types and classes of loans, each with their own

set of rules and terms.

Given the current interest rates and the likelihood that the rate will go up over the

next year as the economy starts picking up, it is a good time to go in for a good rate for a

loan. The interest rates will go up as the economy improves and one needs to be locked

into a long-term low interest rate.

If one has a personal debt, like from credit cards or any other place, they should

probably consider consolidating the debt. One will definitely get a better rate than a credit

card will offer. If one has many loans and debt, putting them together into a larger

amount allows one to negotiate a better rate.

A loan is based on a simple idea: someone gives you money and you promise to

pay it back, usually with interest. Since one must pay back the lender whether the

business is a fabulous success or a miserable failure, the entire risk of the new enterprise

is placed squarely on ones shoulders. But if you're confident about the prospects of a

business and one has the opportunity to borrow money, a loan may be a more attractive

source of money than getting it from an equity investor who will own a piece of a

business and receive a share of the profits. If the business succeeds as one hope and the

person pays back the lender as promised, one will reap all future profits -- there's no need

to share them with investors

Loan Industries in Goa:

Currently in Goa the major companies offering loans for 2 wheelers are Centurion

Bank of Punjab Ltd., ICICI, Ashok Leyland, HDFC, Tatas, etc. These players dominate

the market.

The loan giving houses have a presence at all the major vehicle showrooms in

Goa. The various corporate houses have their own loan schemes available to the

customers. The loan schemes are formulated to as to meet the demand of the people. So

as to formulate an appropriate scheme various information is needed about the people so

as to formulate the scheme.

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

Limited.

OBJECTIVES

To study in detail the process of loan

To improve my practical and general knowledge.

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

COMPANY PROFILE

Centurion Bank of Punjab is a new generation private sector bank offering a wide

spectrum of retail, SME and corporate banking products and services. It has been among

the earliest banks to offer a technology enabled customer interface that provides easy

access and superior customer services.

Centurion Bank of Punjab ltd. has a nationwide reach through its network of 243

branches and 395 ATMs. The bank aims to serve all the banking and financial needs of

its customers through multiple delivery channels, each of which is supported by state-of-

art technology architecture

Centurion Bank of Punjab was formed by the merger of Centurion Bank of Punjab,

both of which had strong retail franchise in their respective markets. Centurion Bank had

a well-managed and growing retail assets business, including leadership positions in two-

wheeler loans and commercial vehicle loans, and strong capital base. Bank of Punjab

brings with it a strong retail deposit customer base in North India in addition to a sizable

SME and agricultural portfolio.

The shares of the bank are listed on the major stock exchanges in India and also on

the Luxembourg Stock Exchange.

Among Centurion Bank of Punjab s greatest strengths is the fact that it is a professionally

managed bank with a globally experienced and capable management team. Mr.Renny

Joseph looks after the day-to-day operations of the bank; AFD Head assisted by junior

management team, under the overall supervision and control of the Board of Directors.

Mr. Rana Talwar is the Chairman of the Board. Some of the major shareholders viz.

Sabre Capital, Bank Muscat and Keppel Corporation, Singapore are represented on the

Board.

Centurion Bank of Punjab is a merger of Centurion Bank with Bank of Punjab.

This merger took place on June 29, 2005. The swap ratio was 4:9.This means that for

every four shares of Bank of Punjab, its shareholders received nine shares of Centurion

Bank.

Management

Their day-to-day operations are looked after by Mr. Shailendra Bhandari,

Managing Director, assisted by a key management team, under the overall supervision

and control of the Board of Directors. The Chairman of the Board is Mr. Rana Talwar.

Some of their major shareholders viz. Bank Muscat, Sabre Capital, Keppel Corporation,

Singapore and Asian Development Bank, Manila (ADB) are represented on the Board.

At Centurion, every customer is a customer of the bank and not merely of a

particular branch. The team of Centurions (people at Centurion) is a part of a

professionally managed, profit making, technology oriented, high performance Bank,

which gives credence to developing excellence among its people.

The Bank offers a wide range of products, which can be tailor-made to the

specific needs of corporate & retail customers across the country. They have been able to

carve a niche in highly demanding & challenging financial market due to the undaunted

efforts of centurions.

They provide performance-based rewards and career growth opportunities to the

dynamic result oriented professionals, who make things, happen and are keen to take on

new challenges. The Bank supports its employees to grow with the organization through

various development initiatives like cross-functional deployment, internal and external

training programs, job enrichment etc. In short, for those with merit, the opportunities are

numerous.

They hold the values of integrity, professional excellence, commitment & sense

of ownership, rooted in the culture of openness and innovation, in their Bank.

ORGANIZATIONAL CHART

Rana Talwar (Chairman)

Shailendra Bhandari (C.E.O)

Renny Joseph Branch Manager

(Panjim)

Sagar Naik Marketing Manager

Deepak Malik Sales Manager

Naresh Kumar Marketing manager

All other staff members

Learning at work

Centurion Bank of Punjab limited is a learning organization, where sharing

knowledge, within or from outside, is a continuous process. The Centurions motto is We

are encouraged to continually expand our capabilities to create the results, we desire. We

believe in achieving extraordinary performance by creating environment in which people

can excel .

Their people development efforts, which so far were more focused on technical

inputs, are now being re-focused towards overall development of human resources. To

synergize HR and business objectives, they have identified competencies required for

present as well as future business needs through exhaustive training need identification

(TNI) exercise. These identified needs will be addressed through their competency

building initiatives, so as to support their businesses.

INTRODUCTION TO THE TOPIC

FILING OF DOCUMENTS

The documents collected have to filed in a proper order. The Documents are filed as

follows:

IRR calculation

Post-Dated Cheques

CIBIL

3 Pages

ECS/SI if any

Application form

Address proof

Photo and signature proof

Bank statement

IT copy/ letter from employer

Field Investigation Report

Agreement

Sales certificate

Invoice

Insurance

Registration certificate

Notes:

a) IRR:

This is calculated on and internal basis. It shows the break up of the amount, the different

charges . etc.

b) Post-Dated Cheques (PDC s):

The bank collects post-dated cheques from the customers, which are duly signed and

crossed with the right amount of EMI-Equal/Equity Monthly Installment, in the name of

the Bank.

c) CIBIL (Credit Information Bureau India Ltd.):

This document contains information about the credit worthiness of the customer.

d) 3 Pages:

These include:-

1) Approval Memorandum:

Various Parameters like Net Income to EMI ratio, Residence Type, Number of years in

business.etc. Are rated according to the organizations credit rating chart, and the overall

rating is then compared to the given norms and accordingly the loan is sanctioned.

2) Pre-Disbursement Checklist

A checklist, wherein the different documents required are tick marked depending on

their presence.

3) Disbursement Checklist

This contains information on the Transaction, the EMI, Commission, and Initial

Paymemt.etc.

e) ECS (Electronic Clearance System)/SI (standing Instruction) if any:

Some Banks offer ECS, where the amount is credited to the Organizations account

automatically every month. SI is when the customer has an account in the organization

and the amount due gets debited from his/her account every month.

f) Application Form:

This form contains the required information about the customer.

g) Address proof:

These are the documents given by the customer for verification of the customers given

address.

h) Photo/Signature proof:

These are the documents given by the customer for verification of the customer s

photograph and signature

Checking Files

1) ID proof: should match application form

2) Address: proof should match application form

3) cheques/ECS (electronic clearing service) letter or standing instructions

4) Fi report (recommended/not recommended) 2 times

5) Application form filled properly

6) Bank statement (no cheque bounces etc)

7) DRR+CIBIL+3documents (completed)

Cheques should be crossed &the right amount should be mentioned. number of

cheques are also checked

ECS ---Form Has Tom Be Filled &Signed By Manager Of Respective Banks

Standing Instructions Are Given When Customer Has A/C in Centurion Bank of

Punjab ltd.

required signature should be there on agreement

FI report if states that the customer is not recommended, field investigation is

done again.

The documents given from address& ID proof should be match the address &ID

in then application form.

-Hypothecation on required documents should be marked.

Application form should contain required signature check references, telephone

numbers (at least 1 should be landline no.)

Incase of joint a/c both signature is required

Co-borrower

Students/housewife/person not working/having low income/NRI/staying in rented

house/any other risk factors seen

__co. borrower can be taken

-have to fill the application form like the borrower

-will be marked as co-borrower

-should not have any risk factors as borrower

-should sign in the agreement as co-borrower

INSTITUTIONS TO BE PROSPECTED:

CATEGORY A:

Profit making public/private ltd companies &government organizations having

salary account with Centurion Bank Punjab Ltd.

Limited companies listed on BSE/NSE making profits &in existence for at least 4

years.

Central& state government organizations who can provide undertaking for salary

deduction to CBL and where salaries are paid by cheque/credit to bank account

(not in cash)

CATEGORY B:

Government department other than central &state government organization

All govt. organization where undertaking for salary deduction& payment to CBL

is given by employees society, provided the society is profit making & in

existence for at least 4yrs

Private ltd companies having minimum 25 employees & making profit at least

2yrs

Large & well established educational /medical institutions run by private

trusts/societies. must be in existence for at least 3yrs.

INSTITUTIONS TO BE AVOIDED:

Institutions in existence for less than 4yrs

Institutions where salary is paid in cash

Institutions where neither salary slip nor certificate showing deduction & net

salary is available.

Institutions where there has been a strike or lock- out in the last 2 years.

Municipalities/Town municipal Council/nagar palika Gram Phanchayats

DMHO (Divisional Medical health officer)

Government Department where budgetary allocation is not available

Sick public sector companies of the government.

Temporary Departments set up by the central/state Government for completion of

specific projects.

Irrigation departments

BEO ( Block Education Officer) BDO Block Development Officer)

Post offices

Charitable organization & Trusts.

Chit Funds

Fire Department/ Forest department.

Unregistered societies / societies running in losses / societies not in existence for

at least 4 years

Societies not empowered by the management for salary deduction.

Public / Pvt. Ltd companies referred to BIFR or running in losses.

BORROWER SELECTION CRITERIA

Employee must be confirmed

Minimum 5 year must be left` for retirement

Net take home pay must be at least Rs. 3000/-

Net take home pay must be at least Rs. +2.5 times EMI

Net take home pay after proposed EMI must be more than 50%of gross pay

Employees should not be transferable outside the district.

Employees must not have been suspended from service at any time

Employees salary must be subject to ESI/PF deduction

One guarantor working in the same organization must stand guarantor.

PROCESS

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

1

2

3

5A

5N

4

6

2

7

5A

5N

8

6

7

1) Files received are entered into the computers consists of the details of the

loan.

2) The documents are placed in order:

a) Document form regarding vehicle

b) Application form - 1

c) Application form -2 (If co borrower exists)

d) FI report

e) Documents regarding address ID & Income

f) Agreement

g) 3 pages

h) CIBIL ( put in by centurion Bank)

i) Post dated cheques ( placed in a special brown envelope)

j) IRR calculated & there are filed

3) Checking of files

The files are checked as mentioned before.

4) The files are scrutinized & depending on the documents in it they are

either approved or not approved.

Checked for:-

Age limit

Job stability

Residence stability

Income

FI report

Tele verification report (when FI not present on time, telephone the

2 guarantees on agreements)

CIBIL

If approved the delivery order is sent to the dealer and the file got is rechecked if not

approved the file got is scrutinized and the cause for non approval is found and remedies

are found for the same.

E.g.: if the person is a minor or person s income is less, then the file would be the remedy

for this problem.

5 a) the re- checked and approval files are finally punched in the system ..

The details regarding the customer, the agreement bike documents are fed into the

computer, through fox-pro software. The same is then sent to Bangalore the files punched

in the morning are sent before 12 and the files punched in the afternoon are sent before 4.

b) The files that are punched are then entered into their (branch) system, for future

records.

The important fields here are the date of first invoice, amount the no mentioned in

the insurance certificate, details of the cheques etc.

c) The details of the file are again entered into the computer with disbursement details

through cancel.

d) The details with were entered through Fro- pro are converted into note pad and printed

the print copy taken is placed in the respective files. These files are then stamped and

signed along with the seal of centurion bank of Punjab Ltd.and are sent.

Delivery order (D.O)

When a person approaches the executives of centurion bank of Punjab Ltd. for a loan, the

executives first see that an FI is carried out. Once the FI report comes back as positive, a

delivery order is received by the executives, the bike can be given to the customer and the

required documents are selected and sent to the bank.

High risk profile / Non target profile

The bank also names customers under high Risk profile/Non- Target some of them are:

1) food chains

2) Real estate agents/property dealers

3) Chit funds/nidhi companies

4) Video parlor operators

5) Manpower consultants

6) Drivers,conductors,sweepers,mechanics

7) Cable operators

8) Auto/2 wheeler spare part dealers

9) Wine merchants

10) Std/Xerox booth operators

11) Builders/contractors/building material suppliers

12) Defence/security related forces (para military forces) reserve police force

13) Small time travel & tour operators (5 employees)

14) Small time transporters

Industry professionals (including actors, directors, producers&distributors)

15) Stock brokers

16) Insurance agent other than government insurance companies

The above customers are required to meet the standard credit norms &in addition

should submit: any 1 of the following proof of ownership of residence.

__Electricity bill

__water board bill

__property tax receipt

__share certificate form a registered society

__sale deed

__title deed

Repayment track record subject to the following:

-the repayment track should be at least 12 months

-The repayment should not have expired more than 12 months before the date of

application

-Not more than 1 cheque bounces in 12 months

-Not more than 30 dbd &current at the time of application

Loan to value not exceeding 70%

Example: If volume of vehicle =X

Loan value is not equal to more than 70%of X

3 PAGES

1. Approval memorandum

Various parameters like Net income to Emi ratio: Resident type, Number of years in

business etc are rated according to their credit rating chart, and the overall rating is

then compared to the given norms &accordingly the loan is sanctioned/rejected. An

approval memorandum is prepared based on the field investigation report. The approval

memorandum is basically a grading system prepared to check whether the loan should be

sanctioned or rejected. The approval memorandum is prepared in such a way: (P.T.O)

Customer Name_______________________________________________

Residence Locality______________________________________________

Dealer __________________________ Scheme_____________________

Vehicle___________________________ Tenure_____________________

PARAMETER GRADE RATING(To be filled in by

staff)

Gross Income A

Net Income B

EMI C

Net Income to EMI ratio D=B/C

Co-Hirer/Guarantor Income E

Self+Co-Hirer Income F=B+E

Total Income/EMI ratio G=B/C

Residence(Owned/Rented

and Years)

H

Residence Type I

No. of Years in Business J

No. of Years in Service K

Employer Category L

No. of Dependants M

Age N

Standard of living(as per

F.I)

O

Total Initial Payment % P

TOTAL

Average Rating

Justification

(especiallypoorcases)________________________________________________

SANCTIONED/REJECTED

_________________________________________________

2. Pre-disbursement check list

To check whether the required particulars are present in the file Example: Proposal form, income proof etc.This is to ensure everything is correct and in order. The pre disbursement checklist is prepared so as to ensure the forms are in order and whether the reports are correctly filled in.

A pre disbursement checklist is of the following type:

Agrt. No: Borrower Name:

Particulars Yes No Remarks

Proposal Form

Approval Memorandum

Income Proof

Address Proof

Photograph Borrower

Photograph Guarantor

Agreement Signed at Proper

Places

Performa Invoice

Security Dep. filled and

stamped

PDC status

Coverage

IRR

Bank Challan for IP

Proof/Dealer Receipt

Disbursement Voucher

Brokerage details

Signature Verification

NOC from other Partners(In

the case of partnership firm)

Board Resolution/M and

AOA(Companies)

Field Investigation Report

Others

3. Disbursement check list

This contains: i) Party name ii) Transaction structure i.e. invoice value, fixed amount, Emi amount iii) Commission details iv) Initial payment

Here all the financial details regarding the 2 wheeler are entered. The EMI

(Equated Monthly Installment), Invoice Value, Down Payment and number of

months for the installment are added along with the initial payment. A

disbursement checklist for 2 wheelers looks like this:

Party Name ___________________

Transaction Structure:

Invoice Value_________ Advance EMI__________

Down Payment_______ Tenor ___________

Finance Amount_______ EMI Amount___________

Rate of Interest_________ First _______months X Rs____

Second______months X Rs____

Last ________months X Rs____

First Due Date_____________ Last Due Date_____________

Initial Payment: ________________

Cheque/DD no: __________

Deposited on: ___________

Down Payment

Service Charges

EMI s in Advances

Security Deposit

Booking Charges

Total Collected

PDC S CHEQUES

PDD S invoice, registration

1. EMI-Equity/Equal monthly installment

2. CPA-Central processing agency

3. TVR-Tele-Verification report

4. EOD- End of day

5. TAT-Turn around time

6. COPS-Central operations

7. DDO-Drawing disbursing authority

Post Dated Cheques Deposit &items Report

Once the files are punched, the cheques from each file are punched &the details of the

cheque deposit i.e. which cheque is going to be deposited & when are send to the

customer, along with a notice stating the consequences of delayed payment &cheque

bounce.

Pre disbursement formalities

Document required from borrower & dealer:

Collect individual borrowers documents

Prepare disbursement checklist

Collectinvoice, insurance cover note &R.T.O Tax challan copy from

dealer.Hypothecationof CBL must be mentioned on invoice and insurance cover

note.

Get the agreement stamped and signed

Obtain one cheque from borrower

DOCUMENTS REQUIRED FROM INSTITUTIONS

Particulars Government organization

Private sector

societies Educational Medical Institutes

Undertaking Y Y Y Y Signature Verification Of Authorized Signatory

Y Y Y

Management awareness letter

Y*

* Required for societies of private sector institutions only.

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

POST DISBURSEMENT FORMALITIES:

Post-Dated Cheques deposit and items report

Monthly letter to be sent for deduction and payment of installments

Should be sent on 15th of the month for installment due in 1st week of next

month.

Details of the case such as invoice, insurance and RC are recorded into the system for

further reference.

Amount of Loan to be financed:

LTV Brand Normal Brand Annex-1 LTV Splendor + 85% Passion+ 85% CD Dawn 85% CBZ 85%

Hero Honda

Ambition/Karizma 75% Victor 85% Max 85% Fiero 85% Scooty 85%

TVS

Mopeds 75% Honda All Models 85%

Freedom 85% LML Scooter 75% Boxer 85% Pulsar 85% Caliber 85% Eliminator 75% 2 Stroke Scooter 80% 5 Stroke Scooter 80% Spirit/Spice 80%

Bajaj

M 80 80% Entire/Libero 80% Cruz 80% RXZ -185 80%

Yamaha

7BX/YB 80% Boss 70% Nova 75% Style/Zing 75%

Kinetic

Aquilla 70% Enfield All Models 70%

TO WHOM SHALL THE BANK LAND

A. Individual

Salaried individuals excluding

-Temporary jobs

-Daily wages employees

-Contract workers

Self employed individuals including

-Proprietor in sole proprietorship firms

-Partner in partnership firm

-Self employed professionals viz Doctors, CA s, Architects, etc

-Directors in companies

Excludes:

-Persons with strong political affiliations

-Persons with no defined source of regular income

-lawyers

-Recovery/Repossession agents

-Bar owners /employees

-Chit fund owners/employees

B.Firms and Companies

Partnership firm

Private/public ltd.company

Excludes:

Trust and charitable organization including private non-charitable trust.

Products to be financed:

To concentrate on all two wheeler 100 cc and above scooterettes (without gear

bikes) can be financed. No mopeds would be financed except Bajaj M80.Tvs

super XL would be considered at specific locations (dealers) only.

SCHEMES

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

1) Advance EMI Schemes:

Here EMI is paid in advance at the start only.

2) Green Channel Scheme:

Here income proof is not required. For Hero Honda the loan rate is 20% and for

all other bikes it is 25%. The customers have to pay 40% of the on road price,

should have their own residence and must be in business or service for at least 5

years

3) Margin Money Scheme:

Here a minimum of 20% is paid to the dealer directly and the rest is paid in

equal monthly installments

4) Any Other Scheme-

Such scheme is given with prior approval

5) Zero % scheme with subventions:

Dealers provide the bank with subventions. If the loan amount is Rs.X, then by

deducting the subvention, the IRR percentage will increase thus making it

profitable o the bank.

6) High LTV Scheme:

Here up to 95% of the on road price can be financed.

-Only for scooters and motorbikes

-Bajaj, Hero Honda, Honda, TVS.

Some schemes are decided on the spot depending on the capacity of the

customer such schemes are calculated with the help of following formula:

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

TERMS AND CONDITIONS

1. Finance amount

o On road price

o Minimum 10,000/-

o Borrower stake <20%else approval of country head is required

2. Tenor:

-12-36 month s else special approval by country head

-less than 100cc, maximum =24 months

3. IRR:

-8.5 at branches

-10.6 at dealerships

4. Service charges:

-2% of finance amount

-500 when loan <25,000

5. Dealer Commission

This is the commission given to the dealers.

6. Security deposit

7. Interest on security deposit

8. TWPC (Two wheeler precautionary charges)

Eligibility Criteria:

SR.NO CRITERIA SALARIED SELF-EMPLOYED 1. Age 21-25 years 21-60 years

Minimum Net salary of Rs Minimum Net income 2. Income 8500 p.m of Rs 40,000/-p.a

3. Employment / Minimum 12 months in Minimum 3 years

Business Current employment &Employed

For at least 2 yrs should be a

Confirmed employee 4. Minimum 3 times EMI 3 times EMI

Monthly net

Income 5. Stay at current

Minimum 1 year Minimum 1 year

Residence 6. Location Must live & work within the geog- Minimum 1 year

Raphic limits of the city as defined 7. Telephone at Preferable Must

Residence /

Place of work

Minimum length of service can be waived incase of professionals like MBAs,

CA s, ICWA s, provided that the applicant is working with a reputed employer

.must be a confirmed employee.

If length of employment in the current job is less than 12 months, details of

previous employment in the last 2 years may be obtained. Case must be done with

guarantor.

The balance period for retirement should be >the tenor of the finance facility

Incase of parent student proposal the parent has to be taken as co-borrower

/guarantor.

Incase of married couples, salaries of both the spouses can be considered as co-

borrower.

When approval is made although the eligibility criteria is not met, AM must

record the exceptional approval & the reason.

FIRMS AND COMPANIES

Sr.No Criteria Firms Pvt/Public Ltd Companies 1 Minimum year in a 3years 3years

Business 2 Minimum net Rs 40,000/-p.a Rs40,000/-p.a

Income 3 Location City where loan is booked Rs 40,000/-p.a 4 Phone Necessary at place of Rs 40,000/-p.a

Business 5 PDCs From account of firm/ Rs40,000/-p.a

Companies

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

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

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

REPOSESSION OF VEHICLE

Agency for repossession Agents appointed for repossession must have an agreement signed with CBL

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

The register should contain following information at the minimum:

Name of the borrower

Agreement number

Date of repossession

Repossession agent

Vehicle number

Model

Make

Colour of vehicle

Location where vehicle is parked

Custody of PDD with(sign of person with whose custody PDD is lying)

Custody of keys with (signature of person in whose custody keys are lying)

Condition of vehicle at the time of repossession

Record date of sale of vehicle/refinance of vehicle

Party to whom sale /refinance given ,sale proceed details

Reports available to facilitate termination

Statement of account (History of borrower payment)

Termination approval memorandum(am)

Termination accounting entries

Ledger account for reconciliation

Terminations

Termination on client request

Termination on account of maturity of the case

Forceful customer given a separate a/c number whenever customer asks for termination first a/c number

Repayment a/c all cheques are deposited on monthly basis if loan is mature unless customer comes for the closure of loan.

Loan a/c here actual loan amount is booked ,principle amount is deducted every month

PDC A/C here principle +interest is added to this a/c ,in other words all the number of PDC S are loaded in this a/c &on the monthly basis ,the cheques are deposited in his personal a/c

There are two types of termination -Matured termination -for closure termination

Matured termination This termination, the PDC s are banked from first installment to last insallment,till the loan matures.

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

Repayment account is viewed for any overdue EMI .which is then included in termination a/c with bounce cheque.

Calculation of Rate of interest: Different vehicles are charged different rates of interest, Eg: Hero Honda=X%

Here the agent can charge more than X% to the customer, but not less than X%.The agent decides the rate depending on the customer

TWO WHEELER PROCESS FLOW

Sr. no Activity Day number Owner 1 Customer walks in the show room , DCA

gives our scheme and takes the details of the customer (name, both addresses, telephone numbers , occupation ,name of employer ,DOB, names of references, loan amount , tenure, invoice value ,LTV,EMI amount and model)and faxes/by telephone gives the same to CPA shop.(in a standard format below).customer fills the application form.

Day Zero Sales

2 Data entry for satyam De-dupe (later on in the LOS system)and firing of FI by e-mail /phone to FI agency to be done simultaneously .FI cut off time 2 p.m.i.e cases received by CPA till

2p.m will be decisioned on the same day ,and cases received after 2 p.m on the next day morning.

Day zero CPA

3 TVR and Ref check to be done at CPA shop Day zero CPA 4 FI Report received (e-mail/phone

confirmation followed by physical reports)EOD.TAT for FI -4hrs local,24 hrs out-station .TATs are not honored ,local cr. Mgr. And AFD Head can jointly take a decision to issue DO .For outstation cases, DO can be issued only after receipt of FI report.(95% cases to be decided in these TAT)

Day zero FI Agency & CPA

5 Delivery Order (DO) to be issued for those cases where the FI& De dupe, TVR, Ref check are positive .Dealer can deliver the vehicle, subject to all Pre-delivery documents along with PDCs and loan agreement is collected from the customer. Standard format of DO is given below.

Day zero/one CPA

6 Completed files of all approved cases Received in CPA.(Files to have complete app form, margin money receipt ,supporting dox for income, age, address proof ,full set of PDCs /SI etc., invoice ,insurance cover note with the bank hypothecations)TAT for local cases 48 hrs ,for outstation cases 72 hrs from delivery.

Day two/Three Sales

7 Credit Checks the file for completeness ,and Day Two CPA

CAM is prepared /Three 8 Files to be screened /sampled By FCU. Pre

sampling checks at the rate 3%of overall logins

Day Two /Three

CPA

9 In case of negative FCU report ,Collection will be intimated either to track such cases separately ,or for repossession

CPA

10 Files cleared by credit will be handed over to local Ops for post delivery checking and disbursals

Day Two /Three

Cr .Mgr/ CPA

11 Local Ops checks the same and e-mails the Disbursement Advice to COPs

Day Two /Three

Ops

12 COPs check the Disbursement. Advice and book the loan on the system ,A/C number is generated ,and funds are released to respective AFD ,in their disbursement pay order a/c for disbursement to dealers

Day Three / four

Local Ops

13 Post approvals by COPs, local OPs .to do the disbursement to dealer either by pay order /TA adjustment.

Day Three / four

Local Ops

14 Local Ops completes the file with proof of disbursement and send the same to COPs for storage and PDC Management .TAT-3 days from disbursement.

Day six/seven Local Ops

15 COPs to complete the data entry in the system and store files and PDCs for all future use.

COPs

RESEARCH METHODOLOGY

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

Project Idea

The Research Survey was conducted to find out the customer profile of those

people applying for 2 wheeler loans at Goa.Currently in Goa the major companies

offering loans for 2 wheelers are Centurion Bank Ltd, ICICI, Ashok Leyland, HDFC,

Tatas, etc.

The loan giving houses have a presence at all the major vehicle showrooms in

Goa. The various corporate houses have their own loan schemes available to the

customers. The loan schemes are formulated to as to meet the demand of the people. So

as to formulate an appropriate scheme various information is needed about the people so

as to formulate the scheme.

Objectives

Primary Objective

To find out the customer profile of the loan applicants i.e. the people applying for loans

at the Two- wheeler showrooms in Goa.

Secondary Objective

To find out the approximate number of people applying for loans at the 2 wheeler

showrooms in Goa and which scheme of loan they apply for.

Management Problem

The management problem submitted was to find out the customer profiles of those people

applying for loans at 2 wheeler showrooms.

Research Problem

My research problem was defined as to find out the number of people applying for loans

at the 2 wheeler showrooms, the profile of people and the various schemes they go for

while applying for loans.

Type of Research

Type of research being used for the study was both qualitative and quantitative.

The information was gathered by using structured questionnaires and interviewing the

centurion Bank Limited employees present at the various 2 wheeler showrooms in

Goa.The areas covered were the 2 wheeler showrooms in Panjim.These were used as

representation of both North and South Goa as they fall in the respective areas.

The present study was conducted for Centurion Bank of Punjab Limited, Panjim-Goa.The

study was mainly based on analysis of data collected through detailed questionnaires. The data

was collected by visiting all the Two- wheeler showrooms in Panjim areas and collecting

information from the employees present there. The analysis of the information gathered was done

by using absolute numbers, percentages, and pie charts.

DATA COLLECTION

The necessary information and data is collected as follows:

a. Primary sources:

o Information and data collection was done with the help of the questionnaire

o We also carried out personal interviews with the customer

b. Secondary sources:

o Information and data was collected from books, journals, periodicals etc.

Information was collected from the brochures provided by the

Study unit

THE PROFILE OF CUSTOMERS

a) Gender of People - The data was analyzed to find out the gender of the

people applying for loans The numbers were later converted to

percentages to get an approximate result.

Gender of People

90%

10%

Male

Female

The number of male people taking loans was found out to be much higher than

female. Approximately 90% of the people taking loans were male. This showed

that bikes like motorcycles were more dominant in the loan market.

b) Age Group The data was analyzed to find out the age group of the loan

applicants i.e. to which age group the majority of the applicants belong to.

The numbers were later converted to percentages to get an approximate

result.

Age Group

18 -25

26-40

41 and above

It was found out that approximately 70% of the loan applicants

were between the age group 26-40.The number of loan applicants were

found to be very few in the above 41 group. Thus the majority of people

were in the 26-40 age groups.

c) Income Group

The data was analyzed to find out the income group of

the applicants. This was to find out to which income group the majority of

the loan applicants belong too. This is also essential to find out the

approximate installment payment that can be expected i.e. the installment

payment that has to be paid when taking a loan.

Income Group

Upto 5000

5000 - 10000

10000 - 20000

20000 and above

From the above pie chart we come to the conclusion that 70% of the

people belong to the below Rs.5000 per month age group. Almost no people

belonging to the above 20000 per month apply for loans. Thus it makes sense to

fix a low monthly installment as majority of those are in the Rs.5000 and below

category.

LIMITATIONS

1) While doing the study the employees of , Centurion Bank of Punjab limited were

not interested to give out information, as it was company specific & confidential.

In many cases; they just refused to spare any time.

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

study.

CONCLUSIONS

Growth in populations and income level had led to increase in the demand for Two-

Wheeler loan. Affordable interest rates and easy loans section by banks and a financial

institution has increased the demand for Two-Wheeler loan in India.

Customer satisfaction level of most respondent is higher for Centurion Bank of Punjab

limited which is provided by survey.

RECOMMENDATIONS

The time taken in providing service to the customer should be minimized so as to

give quick and efficient service

Another recommendation is that the Centurion Bank Of Punjab Limited should do

more and more promotion of their service and the customers should be made aware of

the cost benefit advantages of taking services from authorized company dealer

More visibility through advertising is needed specially media advertising like TV

channels, radio stations, etc.

There is a need to open more branches /offices at the major localities in different

cities and if possible in towns.

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

BIBLOGRAPHY

Financial Management(Text and Problems)

By Khan and Jain

Financial Management

By I.M. Pandey

Market Research

By Tull and Hopkins

Newspaper clippings, company records, booklets and files.

www.centurionbop.co.in

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