Non-Banking Financial Company

NBFC’s: A study of small finance division with reference to S.E. Investments Ltd.
Acknowledgement
It gives me great ecstasy of pleasure to convey my deep and sincere thanks to

MR. SUNIL AGARWAL for giving me constant encouragement.
I have great pleasure in expressing my sincere gratitude and hearty thanks to all the
Faculty members of my college for consenting to be my guide. They had been a great
source of encouragement and inspired me throughout my project. I am greatly
thankful to them for everything they have done for me.
I take this opportunity to pay deep sense of regard to my almighty mater and sincere
gratitude to Mr. Rajesh Sharma, Finance Controller(S.E. Investments, Agra), who
gave his valuable time for completion of my research work. Without his constant
guidance and abundant encouragement throughout the study, it would have not been
possible to carry out the project effectively.
I express my hearty thanks to the whole staff who gave me continuous support in
every possible manner to gain practical knowledge in the Company.
Especially I would like to thank my parents. I would also thank those render any
assistance directly and indirectly in any form of the completion of this study.
Akanksha Jain
Student of M.B.A.
2
DECLARATION
I, Akanksha Jain Student of MBA III Semester, Hindustan Institute of Management &
Computer Studies Farah Mathura, hereby solemnly declare that the Summer Trainig
Report titled “NBFC’s:A STUDY OF SMALL FINANCE DIVISION WITH REFERENCE TO
S.E. INVESTMENTS LTD.” is the outcome of my own research and prepared by me and
the same has not been submitted to any other University or institute for the award
of any degree or diploma.
PLACE----------------
DATE : 18/11/2017
Name of Student : Akanksha Jain
Roll NO. 1606770005
3
INDEX
S.NO. TITLE PAGE NO.

INTRODUCTION 7-15
1 INDUSTRY PROFILE 8
2 BANKING SECTOR 9
3 DIFFERENCE BETWEEN BANKS & 12
NBFC’s
4 CLASSIFICATION OF NBFC’s 12
COMPANY PROFILE 18-21
1 S.E. INVESTMENTS LTD. PROFILE 19
2 VISION AND MISSION 19
3 FORMATION OF THE COMPANY 20
4 STRUCTURE OF THE COMPANY 21
5 EMPLOYEES OF THE COMPANY 22
6 SWOT ANALYSIS OF THE COMPANY 22
FINANCIAL REPORT OF THE COMPANY 24-28
1 YEARLY RESULT 25
2 BALANCE SHEET 27
3 PROFIT AND LOSS ACCOUNT 28
PRODUCT AND SERVICES 30-38
LITERATURE REVIEW 39-41
RESEARCH METHODOLOGY 42-45
1 NEED OF THE STUDY 42
2 OBJECTIVE OF THE STUDY 43
4
3 RESEARCH METHODOLOGY 43
4 DATA COLLECTION 45
DATA ANALYSIS (FINDINGS) 46-87
1 MARKET RESEARCH, RECRUITMENT 47-51
POLICY, GENERATION OF BUSINESS
AND REIMBURSEMENT OF FIELD
MANAGER
2 PROCEDURE MANUAL AND ROLES & 52-72
RESPONSIBILITIES OF INCOME
GENERATION LOAN
3 PROCUDURE MANUAL AND ROLES & 73-112
RESPONSIBILITIES OF LOAN AGAINST
PROERTY
CONCLUSION AND BIBLIOGRAPHY 113-115
1 CONCLUSION 114
2 BIBLIOGRAPHY 115
5
ABSTRACT
The primary goal of the company would be to provide tailor made products and services to the
customer and to retain them into the organization by providing them with higher levels of
satisfaction.
Here a study has been undertaken at “S.E. INVESTMENTS LTD” assessing about the NBFC’s and
gained knowledge about loans been granted under S.E. INVESTMENTS LTD. to their customers.
The need for this research is to understand the types of loans of S.E. INVESTMENTS LTD. & how
the company is performing is contrast to the loans provided to the customers and provide
satisfaction. It will also help the company to focus on what aspects they lag behind so that they can
provide better services to their customers and satisfy them.
For understanding the theory and gaining practical knowledge about loans, this training is been
undertaken by me in S.E. Investment Ltd.
6
7
INDUSTRY PROFILE
NON-BANKING FINANCIAL COMPANIES (NBFC)
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act,
1956 or 2013 engaged in the business of loans and advances, acquisition of
shares/stocks/bonds/debentures/securities issued by Government or local authority or other
marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but
does not include any institution whose principal business is that of agriculture activity, industrial
activity, purchase or sale of any goods
(other than securities) or providing any
services and sale/purchase/construction of
immovable property.
Non-banking financial companies are
financial institutions that provide banking
services, but do not hold a banking license. These institutions are not allowed to take deposits from
the public. All operations of these institutions are still covered under banking regulations.
NBFCs do gather all sorts of banking services, such as loans and credit facilities, retirement
planning, money markets and merger activities. The number of NBFCs has expanded greatly in the
last several years as venture capital companies, retail and industrial companies have entered the
lending business. NBFC have rapidly emerged as an important segment of the Indian financial
system. Moreover, NBFCs assume significance in the small business segment as they primarily cater
to the credit requirements of the unorganized sector such as wholesale & retail traders and small
8
borrowers at the local level. NBFC is a heterogeneous group of financial institutions, performing a
wide range of activities like hire-purchase finance, vehicle financing, equipment lease finance,
personal loans, working capital loans, consumer loans, housing loans, loan against shares and
investment etc.
BANKING SECTOR:
Introduction:
As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and well-
regulated. The financial and economic conditions in the country are far superior to any other country
in the world. Credit, market and liquidity risk studies suggest that Indian banks are generally
resilient and have withstood the global downturn well.
Indian banking industry has recently witnessed the roll out of innovative banking models like
payments and small finance banks. RBI’s new measures may go a long way in helping the
restructuring of the domestic banking industry.
Market Size:
The Indian banking system consists of 27 public sector banks, 26 private sector banks, 46 foreign
banks, 56 regional rural banks, 1,574 urban cooperative banks and 93,913 rural cooperative banks, in
addition to cooperative credit institutions. Public-sector banks control more than 70 per cent of the
banking system assets, thereby leaving a comparatively smaller share for its private peers. Banks are
also encouraging their customers to manage their finances using mobile phones.
ICRA estimates that credit growth in India’s banking sector would be at 7-8 per cent in FY 2017-18.
9
Government Initiatives:
 Finance Minister Mr Arun Jaitley has proposed various measures to quicken India's transition to a
cashless economy, including a ban on cash transactions over Rs 200,000 (US$ 3,100), tax incentives
for creation of a cashless infrastructure, promoting greater usage of non-cash modes of payments,
and making Aadhaar-based payments more widespread.
 The Government of India has announced demonetisation of high denomination bank notes of Rs
1000 and Rs 500, with effect from November 08, 2016, in order to eliminate black money and the
growing menace of fake Indian currency notes, thereby creating opportunities for improvement in
economic growth.
 The RBI has cut its key repo rate by 25 basis points to 6.25 per cent, in order to boost growth as
according to RBI, the inflation momentum has moderated because of a normal monsoon.
The government and the regulator have undertaken several measures to strengthen the
Indian banking sector.
 Government of India has decided to amend Section 35 A of the Banking Regulation Act that will
allow the Reserve Bank of India (RBI) to direct banks for the recovery of non-performing assets
(NPAs)
 The Reserve Bank of India (RBI) has proactively instructed banks to increase their levels of
provision on the loans provided to the telecom sector as a prudent measure, which will help to shore
up provisions for future recognition of any non-performing assets arising out of the sector.
 The RBI has allowed banks in India to raise funds through issuance of rupee-denominated bonds
overseas, also called masala bonds, within the current limit of Rs 2,44,323 crore (US$ 36.6 billion)
set for foreign investment in corporate bonds.
10
 The Ministry of Labour and Employment has successfully opened around 3,840,863 bank accounts
as on December 26, 2016, for workers especially in the unorganised sector, as part of its campaign to
promote and ensure cashless transfer of wages to workers.
 The National Bank for Agriculture and Rural Development (NABARD) plans to provide around
200,000 point-of-sale (PoS) machines in 100,000 villages and distribute RuPay cards to over 34
million farmers across India, to enable farmers to undertake cashless transactions.
 The Government of India’s indigenous digital payments application, BHIM (Bharat Interface for
Money), has recorded 18 million downloads since its launch on December 30, 2016, according to Mr
Amitabh Kant, Chief Executive Officer, NITI Aayog.
 The Ministry of Finance has lowered the threshold for making electronic payments to suppliers,
contractors or institutions from Rs 10,000 (US$ 150) to Rs 5,000 (US$ 75), in order to attain the
goal of complete digitisation of government payments.
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DIFFERENCE BETWEEN BANKS & NBFCS ?
NBFCs lend and make investments and hence their activities are akin to that of banks; however there
are a few differences as given below:
i. NBFC cannot accept demand deposits;
ii. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on
itself;
iii. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available
to depositors of NBFCs, unlike in case of banks.
CLASSIFICATION OF NBFC’s:-
(1) REGISTERED WITH AND REGULATED BY THE RBI:-
The working and operations of NBFCs are regulated by the Reserve Bank of India within the
framework of the Reserve Bank of India Act, 1934 and the directions issued by it under the Act. As
per the RBI Act, a ‘non-banking financial company is defined as:-
1. A financial institution which is a company.
2. A non-banking institution which is a company and which has its principal business the receiving of
deposits, under any scheme of arrangement or in any other manner.
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Under the Act, it is mandatory for a NBFC to get itself registered with the RBI as a deposit taking
company. This registration authorizes it to conduct its business as an NBFC. For the registration
with the RBI, a company incorporated under the Companies Act, 1956 and desirous of commencing
business of non-banking financial institution, should have a minimum net owned fund of Rs 25 lakh.
The registration process involves submission of an application by the company in the prescribed
format along with the necessary documents for RBI’s Act, 1934 are fulfilled, and it issues a
‘Certificate of Registration’ to the company. Only those NBFCs holding a valid certificate of
Registration can accept/ hold public deposits. Some of the important regulations relating to
acceptance of deposits by the NBFCs are:-
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 They are allowed to accept/renew public deposits for a minimum period of 12 months and maximum
period of 60 months.
 They cannot accept deposit repayable on demand.
 They cannot offer interest rates higher than ceiling rate prescribed by RBI from time to time.
 They cannot offer gifts/incentives or any other additional benefit to the depositors.
 The repayment of deposits by NBFCs is not guaranteed by RBI.
TYPES OF NBFCs REGISTERED WITH THE RBI
A. Equipment Leasing Company: - It is any financial institution whose principal business is that of
leasing equipment’s or financing of such an activity.
B. Hire- Purchase Company: - It is any financial intermediary whose principal business relates to hire
purchase transactions or financing of such transactions.
C. Loan Company: - It means any financial institution whose principal business is that of providing
finance, whether by making loans or advances or otherwise for any activity other than its own.
D. Investment Company:- It is any financial intermediary whose principal business is that of buying
and selling of securities.
E. Residuary non banking companies:- It is a class of NBFC which is a company and has as its
principal business the receiving of deposits, under any scheme or arrangement or in any other
manner and not being investment, asset financing, loan company. These companies are required to
maintain investments as per directions of RBI, in addition to liquid assets.
(2) Not REGISTERED WITH THE RBI, but receive directions
from rbi:-
14
Sources in the department of corporate affairs said that to become an NBFC, more than half of the
assets of the company has to be financial assets and at least 50% of the revenue of the company
should come from financial business. However, experts pointed out that some companies
deliberately show that less than 50% of their revenue comes from finance so that it does not come
under the RBI.
A. Mutual Benefit Finance Companies also called as “Notified Nidhis” :- They are the non-banking
finance companies that enable its members to pool their money with a predetermined investment
objective. The main sources of funds are share capital, deposits from its members, deposits from the
general public. These are one of the oldest forms of non-banking finance companies wherein the
owners of the company are also its clients and pool their resources with the intent to secure loans at a
low interest rate at the time the funds are required.
B. Mutual Benefit Copanies also called as “Potential Nidhis”-: It is one that belongs to the non-
banking Indian finance sector and is recognized under section 406 of the Companies Act, 2013.
Their core business is borrowing and lending money between their members. They are also known
as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.
C. Chit Funds / Miscellaneous Non-banking Company:- Chit funds are essentially saving
institutions. They are of various forms and lack any standardised form. Chit funds have regular
members who make periodical subscriptions to the fund. The periodic collection is given to some
member of the chit funds selected on the basis of previously agreed criterion. The beneficiary is
selected usually on the basis of bids or by draw of lots or in some cases by auction or by tender.
15
(3) EXEMPTED FROM THE RBI REGULATIONS including
requirement of registration:-
A. Insurance Company:- A company, which may be for-profit, non-profit or government-
owned, that sells the promise to pay for certain expenses in exchange for a regular fee, called a
premium.
Likewise, in life-insurance, the company will give the client's beneficiary a certain
amount of money when the client dies. The insurance company covers its expenses and/or
makes a profit by spreading the risk of any one client over the pool of premiums from many clients.
B. Stock Exchange:- A place whether physical or electronic, where stocks, bonds, and/or derivatives
in listed companies are bought and sold. A stock exchange may be a private company, a non-
profit, or publicly (some exchanges have shares that trade on their own floors). A
stock exchange provides a regulated place where brokers and companies may meet in order to
make investments on neutral ground. The concept traces its roots back to medieval France and
the Low Countries, where agricultural goods were traded for cash or debt. Most countries have a
main exchange and many also have smaller, regional exchanges. A stock exchange is also
called a bourse or simply an exchange.
C. Housing Finance Company:- The Housing Finance Company is yet another form of non-
banking financial company which is engaged in the principal business of financing of acquisition or
construction of houses that includes the development of plots of lands for the construction of new
houses.
16
D. Micro Finance Company:- Micro finance is defined as
providing micro loan to poorest of the poor (basically those
are neglected by banks, microfinance provides them loan
facility), and a source of financial services for entrepreneurs
and small businesses lacking access to banking and related
services. The two main mechanisms for the delivery of financial services to such clients are: (1)
relationship-based banking for individual entrepreneurs and small businesses; and (2) group-based
models, where several entrepreneurs come together to apply for loans and other services as a group.
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 S.E. INVESTMENTS LTD. PROFILE
 VISION & MISSION
 FORMATION OF THE COMPANY
 STRUCTURE OF THE COMPANY
 EMPLOYEES OF THE COMPANY
 SWOT ANALYSIS OF THE COMPANY
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INTRODUCTION:-
S.E. Investments Ltd is registered as a category “B” – Non Deposit taking NBFC with Reserve
Bank of India. Initially, it was promoted as a private limited company under the companies Act,
1956. Incorporated in March, 1992.
On 01.03.1995, fresh certificate of incorporation, consequent upon conversion to Public Limited
Company was granted by the office of the Registrar of the Companies, Uttar Pradesh, and Kanpur.
The Registered office of the Company is in Delhi and Head office of the company is in Agra.
The philosophy of the company is deeply rooted in the Indian tradition of business with a social
conscience and towards the attainment of this S.E. Investments Ltd. Operates with utmost
transparency and efficiency thereby ensuring maximum returns with minimum risk.
The three word ancient Sanskrit phrase re-produces the motto and philosophy of SEIL’S
meaning.
Wealth - Wordly things
Society
Trust
2.1 VISSION & MISSION OF THE COMPANY:-
 The main objective of the Company is creation of Wealth for Society.
 To be a leading financial services provider recognized, admired and respected for high corporate
governance, ethical practices and social values.
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 To primarily serve the underserved rural small entrepreneurs and self help groups with debt capital
to support the growth of the rural India.
 To serve the small and medium enterprises in rural and urban India with providing debt for
promoting entrepreneurial segment of the society.
 To finance the growing aspirations of the Indian consumers with favorable demographics.
 To earn the trust and confidence of all customers and stakeholders, meeting their expectations and
make the company a respectful household name.
 To be valued by our customers for bringing competitive solutions, reliability, comfort and
convenience to their lives and business.
 To create a value with a difference.
2.2 FORMATION OF THE COMPANY:
 The S.E. Investment company is registered as per the rules, regulations and provisions given in the
companies Act, 1956.
 It is the investment company which provides loan to customers. If the total financial flow of business
gets more than 50% of the capital assets of the company in any year, then getting the NBFC
certificate is mandatory.
 The S.E Investment Limited is hold a paid-up capital fund of minimum INR-2crore. This
recommended Net Owned Fund, ought to be present in company’s bank account at the time of filling
application for the company registration.
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2.3 STRUCTURE OF THE COMPANY
CHAIRMAN
MR. SUNIL
AGARWAL COMPANY INDEPENDENT
(MANAGING SECRETARY DIRECTOR
DIRECTOR)
BOARD OF EXECUTIVE
DIRECTORS DIRECTOR
NON-EXECUTIVE
DIRECTOR
INDEPENDENT DIRECTORS:-
Mr. Brij Lal Goel
Mr. Pradeep Agarwal
Mr. Naresh Kumar Jain
Mrs. Anshu Gupta
EXECUTIVE DIRECTOR:-
Mr. Harish Singh
NON- EXECUTIVE DIRECTOR:-
Dr. Arun Gopal Agarwal Non-Executive Director
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2.4 EMPLOYEES OF THE COMPANY
Here, employees are divided according to departments that are as follows:
1. Micro Finance Department: 200 and above persons are working in this department.
2. Loan against Property Department: 80 and above persons are working in this department.
3. Legal Department: 30 persons are working in this department.
4. Personal & Business loan Department: 30 persons are working in this department.
So the total number of the persons in the entire department is approx. +340 in the S.E. investment
Company.
2.4 SWOT ANAYLISIS OF THE S.E. INVESTMENTS LIMITED
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 INNOVATIVE CULTURE
 STRONG MANAGEMENT
 FOCUS ON SEMI-URBAN & RURAL AREAS
 FINANCIAL LEVERAGE
 SUPPLY CHAIN
 INTENSE COMPETITION
 GOVT. REGULATIONS
 SUBSTITUTE PRODUCTS
 VOLATILE REVENUE
 BAD ECONOMY
 NEW PRODUCTS
 NEW SERVICES
 NEW MARKET
 EMERGING MARKET
 LARGE MARKET
 HIGH STAFF TURNOVER

 WORK INEFFICIENCIES
 ONLINE PRESENCE
 LACK OF SCALE
 CUSTOMER SERVICE
No. of customers in the year 2016, has increased to 7,09,258 which is
approx. 10% higher than previous year.
23
24
 YEARLY RESULT
PARTICULARS MAR 17 MAR 16 MAR 15 (in crore)
Net Sales/Income from operations 249.52 193.37 178.38
Other Operating Income -- -- --
Total Income From Operations 249.52 193.37 178.38
EXPENDITURE
Employees Cost 11.84 12.78 10.74
Depreciation 0.40 0.44 0.80
Other Expenses 71.72 46.68 44.21
P/L Before Other Inc. , Int., Excpt.

165.56 133.47 122.63
Items & Tax
Other Income -- -- --
P/L Before Int., Excpt. Items & Tax 165.56 133.47 122.63
Interest 88.37 64.87 55.93
P/L Before Exceptional Items & Tax 77.19 68.60 66.70
Exceptional Items -- -- --
P/L Before Tax 77.19 68.60 66.70
Tax 25.89 23.47 22.19
P/L After Tax from Ordinary

51.29 45.13 44.52
Activities
25
Net Profit/(Loss) For the Period 51.29 45.13 44.52
Equity Share Capital 40.56 40.57 40.56
Reserves Excluding Revaluation

513.56 469.78 479.18
Reserves
Equity Dividend Rate (%) 10.00 10.00 10.00
EPS Before Extra Ordinary
Basic EPS 12.65 11.13 10.98
Diluted EPS 12.65 11.13 10.98
EPS After Extra Ordinary
Basic EPS 12.65 11.13 10.98
Diluted EPS 12.65 11.13 10.98
Public Share Holding
No Of Shares (Crores) -- -- 3.00
Share Holding (%) -- -- 73.96
Promoters and Promoter Group Shareholding
- Number of shares (Crores) -- -- 1.06
- Per. of shares (as a % of the total

-- -- 100.00
sh. of prom. and promoter group)
- Per. of shares (as a % of the total

-- -- 26.04
Share Cap. of the company)
26
 BALANCE SHEET
PARTICULARS MAR 16 MAR 15 MAR 14
Sources Of Funds
Total Share Capital 40.57 43.07 43.07
Equity Share Capital 40.57 40.57 40.57
Preference Share Capital 0.00 2.50 2.50
Reserves 469.78 479.18 441.90
Networth 510.35 522.25 484.97
Secured Loans 8.04 22.02 365.80
Unsecured Loans 499.14 388.39 20.90
Total Debt 507.18 410.41 386.70
Total Liabilities 1,017.53 932.66 871.67
Mar '16 Mar '15 Mar '14
Application Of Funds
Gross Block 8.79 17.66 16.27
Less: Accum. Depreciation 5.79 14.56 13.76
Net Block 3.00 3.10 2.51
Investments 68.58 48.57 94.13
Inventories 996.94 961.21 871.41
Cash and Bank Balance 24.04 13.33 3.74
Total Current Assets 1,020.98 974.54 875.15
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Loans and Advances 200.49 85.72 88.31
Total CA, Loans & Advances 1,221.47 1,060.26 963.46
Current Liabilities 131.51 149.21 123.88
Provisions 144.02 30.07 64.56
Total CL & Provisions 275.53 179.28 188.44
Net Current Assets 945.94 880.98 775.02
Total Assets 1,017.52 932.65 871.66
Contingent Liabilities 139.47 25.07 0.61
Book Value (Rs) 125.83 128.14 118.95
 PROFIT AND LOSS STATEMENT
PARTICULARS MAR 16 MAR 15 MAR 14
Income
Sales Turnover 193.37 178.38 207.93
Net Sales 193.37 178.38 207.93
Total Income 193.37 178.38 207.93
Expenditure
Employee Cost 12.78 10.74 9.09
Miscellaneous Expenses 41.74 38.71 48.83
Total Expenses 54.52 49.45 57.92
Operating Profit 138.85 128.93 150.01
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PBDIT 138.85 128.93 150.01
Interest 64.87 55.93 61.47
PBDT 73.98 73.00 88.54
Depreciation 5.37 6.29 4.39
Profit Before Tax 68.61 66.71 84.15
PBT (Post Extra-ord Items) 68.61 66.71 84.15
Tax 23.47 22.19 27.90
Reported Net Profit 45.13 44.52 56.25
Total Value Addition 54.52 49.46 57.92
Preference Dividend 4.55 5.01 4.90
Equity Dividend 0.00 0.00 0.00
Per share data (annualised)
Shares in issue (lakhs) 405.60 405.60 405.60
Earning Per Share (Rs) 10.00 9.74 12.66
Equity Dividend (%) 0.00 0.00 0.00
Book Value (Rs) 125.83 128.14 118.95
29
Financial
Service Division
Small Finance
Division
30
HIGHLIGHTS
Business Segment
FY 2016 FY 2017
Secured Loan 77% Secured Loan 78%
Unsecured Loan 23% Unsecured Loan 22%
loans loans
23% 22%
secured secured
77% unsecured unsecured

78%
Company primarily operates in 2 segments, viz. Unsecured Loans and Secured Loans.
FINANCIAL SERVICES DIVISION
The company is engaged in the business of financing. It also provides personal loans, business loans,
loans against property, etc. to individuals/ corporate bodies. The company has formulated various
schemes for Corporate Financing keeping in view the size and nature of business.
31
The company also owns and manages the first private Safe Deposit Locker Value at Agra. The vault
is equipped with the state of art electronic security systems and other operational conveniences such
as access control.
Small finance Division
The small finance division provides loans to low-income households with loan sizes varying from
Rs40,000 to Rs2,00,000. There are two streams of small finance lending methodology employed by
the company. The small credit division provides loans to low-income households with loan sizes
varying from Rs40,000 to Rs2,00,000. There are two streams of small finance lending methodology
employed by the company.
INDIVIDUAL LENDING MODEL – Loans are extended to individual entrepreneurs for various
purposes – both agricultural and non-agricultural. The loans are unsecured in nature and have cross
guarantee of other borrowers.
GROUP LENDING MODEL – loans are extended to borrower groups. Normally, these borrowers
are ladies and have income from various sources like dairy, poultry, handicrafts, agricultural labor
and other microenterprises.
As per nature of product, S.E. Investments offers the INCOME GENERATION LOANS - These
loans are for productive purposes and are extended to households with a potential to employ the
borrowed money in income generation. The loans are typically for 24 months. The clientele is spread
across urban and rural areas. A large number of these loans are for agricultural uses like procurement
of inputs, dairy and primary processing of agriculture produce.
32
Ticket size for the IGL: Rs. 40,000 to Rs. 1,00,000. To Small business owners for purchase of
seeds, fodder, cattle’s, dairy and other small finance requirements.
Tenure: Up to 18 months
Rate of Interest: Up to 15% per annum (changes from time to time)
Parties Included: Borrower and Guarantor.
Risk associated in IGL:
Funding loans always involves risk, the default rates on microfinance loans are estimated at 2 – 5%,
which is considerably lower than those on small loans made by NBFC’S.
Though the default rate on microfinance loans is low, there is a risk that you may lose all or part of
your principal.
After contributing towards a loan or a guarantee your money takes a specific route through various
organizations.
Is there any kind of risk in IGL? There is risk involved in IGL. S.E. Investment recovered full
amount in installment from borrowers on due date by the help of field manager. FM plays a very
important role in collection of dues. Field manager have to perform their task under supervision of
Area Manager.
On the Scheduled day of collection, the FM collects the installment amount from the borrowers and
same should be update in the collection cards.
If some collection is left then FM informs the AM of his area and with the help of AM, submit the
delayed installment collection in the company’s account with in banking hours.
But sometimes there is risk involved on both the part as from the borrower’s side or from the field
Manager Side.
On the Borrower’s Side:
1. Natural Risk
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 Business failure due to crop failure, floods, cyclones, or other calamities that may destroy the
income generating assets.
 Localized epidemics and illnesses that could affect the ability to earn a livelihood to repay the loans
 Calamities in the family that might result in loan funds being diverted into non-income generating
activities
 It would reduce the likelihood of loan repayment, unless the loan is rescheduled to give the
borrowers more time to pay it back.
So in this case Company gave more time to borrower’s so that they can paid the loan amount, only if
the borrower inform the company about such calamity or mis-happening. But still, sometimes the
borrower did not pay the amount after extending the maturity period. So, this type of risk is involved
in the IGL.
2. Sometimes borrowers are not paid the installment on time and some amount is left unpaid by
borrower. In this case Field manager warned the borrower that they have to pay the amount at any
cost. But still borrowers are not paid the amount. In this case, recovery team is sent at borrower’s
place so that they can collect the amount. But still, borrower does not give the amount. So, this can
be considered as a risk on the part of the borrowers.
On the Field Manager Side:
1. Fraud Risk: Sometimes borrower gave the full payment to field manager but field manager does not
submit the full amount or any amount in the company that means fraud take place on behalf of field
manager. In this case, Company filed the legal case against the field manager.
So, we can say that there is risk involved in the income Generation loan Scheme (IGL) from both the
borrower and field manager side.
34
LOAN AGAINST PROPERTY: It is exactly what the name implies – a loan given or
disbursed against the mortgage of property. The loan is given as a certain percentage of
the property's market value, usually around 40 per cent to 60 per cent.
Features:
 Higher loan amount available for longer tenure and at attractive rates.
 Quick and hassle free loan with speedy approvals.
 Residential and commercial properties accepted as collateral.
 Excellent debt consolidation tool.
Benefits:
 Higher Loan amount with Lower EMI.
 Funds can be used for business as well as personal needs.
 Flexible repayment - Option to choose between Overdraft Facility and EMI based loan.
 Specially designed programs for the Self Employed.
Ticket Size: Rs. 1 lakh – Rs. 25 lakh. It is given to Small Entrepreneurs/Partnership firms in need
of immediate funds, for say, purchase of additional inventory for unexpected orders, emergent
business needs.
Tenure: Minimum 6 months to maximum 60 months.
Rate of Interest: up to18% per annum.
Parties Included: Borrower, Co-Applicant, and Guarantor.
 Salaried Individuals
 Self Employed
35
Eligibility:
Loans can be applied by individuals, either solely or jointly. Owners of the current property, in
respect of which the loans are being sought, will have to be co-applicants. However, the co-
applicants need not be co-owners.
Risk associated in LAP:
Is there any kind of risk associated with Loan against Property? Yes there is risk in Loan against
Property still its nature is secured which means it is a loan in which the borrower pledges some
asset (e.g. a car or property) as collateral for the loan, which becomes a secured debt owed to the
creditor who gives the loan.
Loan against Property is less risky from unsecured loan because there is involvement of collateral
security but it is not easy for a NBFC’s Companies to use land as a security in case when borrowers
are not able to pay the money. It involves very legal formality to sell out the property. To reduce the
lender's credit risk, the lender may perform a credit check on the prospective borrower. Credit risk
mainly arises when borrowers unable to pay due willingly or unwillingly.
Funding loans always involves risk, the default rates on microfinance loans are estimated at 7 – 10%,
which is considerably lower than those on property loans made by NBFC’S.
The default rate is low, but it may lead to huge losses for the company.
After contributing towards a loan or a guarantee your money takes a specific route through various
organizations.
Is there any kind of risk in LAP? There is risk involved in LAP. S.E. Investment recovered full
amount in installment from borrowers on due date by the help of field manager. FM plays a very
important role in collection of dues under LAP scheme also. Field manager have to perform their
task under supervision of Area Manager.
36
On the Scheduled day of collection, the FM collects the installment amount from the borrowers and
same should be update in the collection cards.
If some collection is left then FM informs the AM of his area and with the help of AM, submit the
delayed installment collection in the company’s account with in banking hours.
But sometimes there is risk involved on both the part as from the borrower’s side (including co-
applicant) or from the field Manager Side.
On the Borrower’s Side:
1. Natural Risk
 Business failure due to machinery breakdown, defective product entered in the market resulted to
loss of customers.
 Professional indemnity is been observed.
 Flood or drought or any natural calamity in the region.
It would reduce the likelihood of loan repayment, unless the loan is rescheduled to give the
borrowers more time to pay it back.
So in this case Company gave more time to borrower’s so that they can paid the loan amount, only if
the borrower inform the company about such calamity or mis-happening. But still, sometimes the
borrower did not pay the amount after extending the maturity period. So, this type of risk is involved
in the IGL.
 Sometimes borrowers are not paid the installment on time and some amount is left unpaid by
borrower. In this case Field manager warned the borrower that they have to pay the amount at any
cost. But still borrowers are not paid the amount. In this case, recovery team is sent at borrower’s
place so that they can collect the amount. But still, borrower does not give the amount. So, this can
be considered as a risk on the part of the borrowers.
On the Field Manager Side:
37
1. Fraud Risk: Sometimes borrower gave the full payment to field manager but field manager does not
submit the full amount or any amount in the company that means fraud take place on behalf of field
manager. In this case, Company filed the legal case against the field manager.
So, we can say that there is risk involved in the Loan Against Property (LAP) from both the
borrower and field manager side.
38
The concept of chit funds according to Simcox is originated more than 1000 years ago. And it is
mentioned, Dravidian kuri is used for raising money for some special purposes.
Subbarama aiyar has described the working of ‘income generation loan’, where lot decides the
person every month to whom the amount is to be paid. The chit fund offers money at a flexible
interest rate and the interest rate depends on the demand of the money.
The Travancore Banking Enquiry Commission and Travancore Companies Act recommended
that the banks in the state were prohibited from conducting “Potential Nidhis” business. But after
Independence following the extension of the Indian Companies Act (1913) to Travancore State, the
position changed and banks restarted the kuri business with effect from 1st April 1951.
V.Krishnan mentioned the growth, importance, types, features and malpractices of chit funds. The
favouring circumstances that fostered the growth of the chit funds were the lack of organized credit
facilities to permit of savings deposits, the accommodation of small capital and the availability of
loans on easy terms. The chit funds show a great deal of adaptability to the conditions that prevail in
the area in which they have to operate. There are importantly three types of chits, (1) The Thattu
chit, (2) The Auction chit, (3) The Prize or the lottery chit.
According to S.K.Basu A Non-Banking Financial Company (NBFC) is a company incorporated
under the companies Act, 1956, and conducting the financial business as its principal business. In
39
India, the Non-Banking Financial sector comprises a multiplicity of institutions, which are defined
under section 45 I(a) of the Reserve Bank of India Act, 1934.
According to the information given by The Banking Commission nine banks in Andhra Pradesh,
Kerala, Mysore and Tamil Nadu had started generating property loans in 1968.
Shri K.M.Balavenkataraman Studied about progenitor Moyy Murai. Moyy means call money
pooled and Murai means custom. It was a sahaya-nidhi, with a strong element of co-operative spirit.
The principle of chit fund was known to rural India for a fairly long time. A chit fund is primarily a
mutual benefit society in which some people join to save and others to borrow. A financial
intermediary gathers the savings of the people and distributes the funds to numerous borrowers, thus
affecting the allocation of real resources. The difference of a financial intermediary and a chit fund is
, chit fund collects the savings of the members by periodical subscriptions for a definite period of
time, and it connects the borrowing class directly with the lending class and the pooled saving is lent
out to the same group of savers. In so far as the chit funds have no control over the end-use of the
funds, the intermediation does not necessarily result in an efficient use of resources. The efficient use
of resources takes place only in the case of those members who utilize the prize amount in acquiring
income-earning assets, which directly or indirectly promote capital formation. It is therefore; better
to consider chit funds as a co-operative endeavor.
The study of Dr. C.P.S.Nayar highlighted that the chit funds is different from other savings and
credit institutions in that it is more than a savings bank to the saver and more than a lender to the
borrower. The chitty offers many facilities to the borrowers. (1) The loans in most cases are
unconditional. (2) They are clean loans. Tangible assets are rarely used as security. (3) They can be
rapid in easy installments. (4) The borrower need not keep a margin for the loan. The increasing
popularity of chit funds even in those areas where the banking habit of the people is wide spread
40
shows that the scheme is basically sound and cannot be brushed aside as an irrelevant or
anachronistic business practice. It becomes easy when the chit funds are operated by disciplined
institutions such as the commercial bank, a Government owned company or a public limited
company.
Dr. Yogesh Maheshwari(2013) in his paper state that “Changing Monitory scenario have opened up
opportunities for NBFCs to expand their global presence through self expansion strategic alliance
etc. The Monitory reforms have brought Indian Monitory system closer to global standards”.
R.Kalyansundaram opined that the chit funds have doubtless a positive role in the economy of the
country and a separate department for chit funds to control them is an essential need. A commission
at Government level is necessary to be set up to go into details of their working, giving chit funds an
opportunity to represent their case.
As mentioned by M.A. Sreenivas, in his study on Finance Corporations, Chit funds are conducted
by the finance corporations on a large scale to collect funds from the public easily. Being
unincorporated bodies, these organizations should not accept public deposits from the public. And he
suggested that, before granting them license the Reserve Bank has to investigate the background of
these organizations.
W.N.Shahin opined that the presence of informal loan markets leads to a different sequence of
results due to the increase in the cost of working capital caused by contractionary monetary policy.
Credit rationing in the formal sector forces many firms to seek informal loans.
41
NEED OF THE STUDY
In any financial company the most important activity is to grant loan at a reliable interest rate which
shows true and correct disbursement of loan to the small investors. Providing loan without a
collateral security to the borrowers is been experienced, and it has forced me to know more about the
company.
The loan provided by the company is of small amount and the far reach of the Field Manager has
advanced the company in his dealings. For running a NBFC the company is free to make their own
law and policies considering the RBI rules and guidelines, by keeping in mind that it should not
harm the society and its environment in any manner.
In the present time, providing loans of smaller amount to the rural areas is a very difficult task which
is very easily handled by the Area Manager, and keeping an eye on the loan requirement of the low
income group borrower has became necessary. We as the student of management are aware of loan
procedure which banks follows and it seems very pathetic to the small borrowers so, to reduce their
mental pressure, field manager deals with them and apply for loan on their behalf and provide loan
to the borrowers.
This importance and massive use of granting loan by S.E. Investments has motivated me to do
research and training regarding “NBFC’s: A STUDY OF SMALL FINANCE DIVISION WITH
REFERENCE TO S.E. INVESTMENTS LTD.”.
42
OBJECTIVES OF THE STUDY
• To gain knowledge regarding different types of small

financial loan.
#
• To find out the need of loan to the small borrowers without

any security.
#
• To study the disbursement of loan and its procedure under

Income Generation Loan (IGL) & Loan Against Property (LAP)
#
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. In this step-by-step methods
are used to solve a particular problem. It can also be defined as a scientific and systematic search for
pertinent information on a specific topic. It refers to a search for knowledge In fact; research is an art of
scientific investigation.
43
The methodology may include publication research, interviews, surveys and other research techniques, and
could include both present and historical information. The methodology adopted for the present study was
focus discussion, interview and close observation through in-house study. Since the project is based on
action research it was necessary to build rapport to collect intense as possible information from the Client.
The main focus was to do with the terminate satisfaction level of customer and explore the possibility of
more arrangement of information system.
Research can be define as “ Logical and systematize application of fundamentals of science to the general
and overall questions of the study, and scientific techniques which provide precise tools, specific
procedures and technical rather than philosophical means for getting and ordering the data prior to their
logical and manipulation.”
The process used to collect information and data for the purpose of making business decisions. The
methodology may include publication research, interviews, surveys and other research techniques, and
could include both present and historical information. Hence the research spent considerable time with the
people who reside in nearby encompassing Agra city.
RESEARCH DESIGN
A research design is the arrangement of conditions for collection and analysis of data in a manner that aims
to combine relevance to the research purpose with economic in procedure.
TYPE OF RESEARCH DESIGN
On the basis of fundamental objectives of the research, research project is of Exploratory Research
44
Regarding this project, exploratory research design is applied. Here, exploratory research designs
concern with describing the performance of the business loan. The design helps in understand the
characteristics in a given situation, think systematically about aspects in a given situation, offer idea for
probe and research helps to make certain simple decision.
DATA COLLECTION
SECONDARY DATA
Secondary data may be obtained from many sources, including literature, industry surveys, compilations
from computerized databases and information systems, and computerized or mathematical models of
environmental processes. Information is gathered from company document, website and books on
Consumer Behavior.
The data has been collected through following method –
 Books
 Internet
 Company website
 Discussion
45
46
MARKET RESEARCH, RECRUITMENT POLICY,

GENERATION OF BUSINESS AND
REIMBURSEMENT OF FIELD MANAGER
(A) MARKET RESEARCH:
EXISTING MARKET
• Continues market visit
• Proper utilization of market potential
• Competitior feedback
NEW MARKET
• Create new opportunities
• Establish business possibilties
Under New market before starting an operation, the staff conducts village surveys to evaluate local
condition such as:
a. Population
b. Cast and community
c. Gender ratio and Literacy ratio
d. Means of livelihood and Poverty level
e. Banking arrangements
f. Political stability
Once the survey is over, a detailed report is to be presented to the Vice President for the approval.
47
NOTES:
 First of all a preliminary survey is to be done and preliminary report should be submitted to
management, for principal approval and if management approves the same, the detailed research
should be done.
 Before the final approval, Vice President/ Sr. Zonal manager must visit that particular area and
provide his remarks on that report.
 Final Survey report should be provided to the Internal Auditor & WTD after finalization of the area
but before starting operations for the comments.
(B) RECRUITMENT POLICY:
Once the area is approved, the next step is to do the recruitment of Field Manager, Area Manager,
Regional Manager and Zonal Manager in the targeted area.
RECRUITMENT OF FIELD MANAGER:
Initial interaction with 1st round of interview Final discussion with

Area Manager by Regional Manager Zonal Manager
Forwarded for the

approval of Executive Remarks of Vice
Field Investigation
Director through HR President
The area one FM covers is around 3 to 5kms.
48
RECRUITMENT OF AREA MANAGER:
Initial interaction with 1st round of interview Final discussion with Sr.
Regional Manager by Zonal Manager Zonal Manager
Forwarded for the

approval of Executive Remarks of Vice Field Investigation
Director through HR President
RECRUITMENT OF REGIONAL MANAGER:
Initial interaction
with Zonal 1st round of
Manager at interview by Final discussion
Regional Manager Sr. Zonal with Vice
location Manager President
Forwarded for the

approval of Field
Executive Director Investigation
through HR
RECRUITMENT OF ZONAL MANAGER:
Initial interaction
with Sr. Zonal 1st round of Field
Manager at Zonal interview by Investigation
Manager location Vice President
Forwarded for the

approval of Executive Final discussion with
Director through HR President Operations
49
RECRUITMENT OF SR. ZONAL COORDINATOR / GENERAL MANAGER:
Final discussion with

1st round of Field
interview by Vice
President Operations
Investigation
President
Forwarded for the

approval of Executive
Director through HR
NOTES:
 In case of recruitment policy of RM, ZM and Sr. Zonal Coordinator, President Operations should
also interact personally (in the form of formal interview).
 HR Policy is required in addition which includes Termination, Transfer of employee, and intimation
to concerned departments on appointment of any staff / field executive.
 On the job training will be provided to field staff.
 After each due date, borrower wise FM wise report of overdue will be provided to the Zonal
Manager. Zonal Manager will provide the comments within 5 days. This sheet contains the cases in
which overdue amount is of more than 30 days.
 100% disbursement will be done through bank.
 PAN Card copy is mandatory for AM/FM/RM/ZM/Senior Zonal Coordinator.
 Regular field visit of VP and Sr. Zonal Coordinator is also required.
 Internal Auditor must be having the power to verify the death cases.
 Death certificate must be received within 30 days from the date of death for proper accounting.
 Currently there is no procedure regarding termination of employees especially of field staff.
50
(C) GENERATION OF BUSINESS:
Field Manager will be primarily responsible for the generation of business. The Field Manager will
generate business under the controls of Area and Regional Managers. The Field Managers are
required to generate minimum business of Rs. 3,00,000 in a moth to qualify for the fixed component
payable to him. The Field Manager shall be eligible for maximum business of Rs. 5,00,000 in a
month.
(D) REIMBURSEMENT OF FIELD MANAGERS:
Vice President may authorize to decide the fixed component of Field Managers even if the business
procured by the F.M. is less than Rs. 3,00,000. Total sum of Fix Component Payable to field
managers should not be more than 1% of gross business generation.
Payment of monthly incentive of FM’s should be on every 7th day of the next month, before
releasing such sheet will be provided to Internal Auditors for the verification, 2 days in advance and
payment of FM’s Yearly Incentive by 2nd week of May, after verifying all aspects such as over dues,
stake in field etc.
NOTES:
 The component is fixed up to Rs. 10,000, payable through cheque / account transfer and calculations
are only for Agra region as more than 80% business booked from Agra region.
 Max. 10% of the no. of eligible FMs for fixed component may be allowed to be given fixed
component at the discretion of VP. In case of more than 10%, approval of ED is required.
 While calculating monthly incentive, overdue is to be considered.
51
PROCEDURE MANUAL & ROLES AND

RESPONSIBILITIES OF INCOME GENERATION
LOAN DIVISION
(A) ISSUE OF BANK LOAN FILE:
 The field manager will collect the blank loan file from front office. (Max. twice in a month)
 The blank files shall be kept at store department (at 4th floor) and shall be prepared (card & revenue
stamp) there itself.
 A register shall be maintained by store department for such cause.
 The front office shall maintain a register containing the details of files issued to particular field
manager and FM’s initials shall be taken on the register.
 The limit of blank files a FM can retain is required to be fixed.
52
(B) SOURCING OF LOAN APPLICATION FROM THE FIELD:
Policy &
procedure
alongwith
detailed
product
scheme
Check if some previous Check applicant
loan is running on credibility and repayment
applicant or towards his capacity prior filling of
family members application
Verification of
FM should ensure that documents
the loan application
sourced is within his
territory
Recheck the Eligibility of

application form borrower &
alongwith signature guarantor
of both the parties
If any of the case is found on which previous loan is running then in that case previous interest will
not be charged but a new interest @2% per EMI will be charged.
(C) FORMS REQUIRED FOR APPLYING LOAN:
 Application form: - It is a form where the pre-written application is drafted and contain signature of
both the borrower and guarantor.
 Pronote: - It is a type of promissory note including a promise to pay the loan amount.
 FI: - It means Field investigation which is done by the office person.
53
(D) CHECKING & SUBMISSION OF LOAN APPLICATION FIELS AT OFFICE:
Specified day of a week all the files of an area is to be submitted in office for the further checking &
evaluation of the files by front office executives sitting in the office along with original KYC & bank
passbook of the applicant & guarantor. Following are cross verifies during file checking:
 The file is completely filled or not?
 The entire KYC & Bank passbook is to be verified from the original
 At all the required placed signature of applicant, guarantor & FM is available or not?
 Bank account is commercial or not?
 Correct bank account no. is written in file or not?
 Recent colored photography of both guarantor & borrower are available or not?
(E) CUTTING OF FI:
Cutting of FI means to remove the name of borrower from the current approval list, as the previous
loan’s installment is still due to be paid by him. The cutting procedure requires all the previous
records of the borrower along with his guardian name, Aadhar number, Bank Account Number and
the most important the ISAG code which is allotted by the company to him at the time of sanctioning
previous loan to him.
There is a procedure to do the same. It is as follows:-
 Firstly check the data under Excel sheet which contains the previous records of the borrower. Under
this check the borrower’s name and his guardian name. If it is matched with previous records then,
do the following steps:
54
o With the help of the software, the previously
ascertained code is used to check the number of
installments due including previous and future due.
There are two cases of it:-
 If number of paid installments is more than 11, then further checking will not be done, and loan will
be granted to him after further checking, but
 If number of paid installments is 11 or less than 11, then we have to do cross checking of the
records.
 For cross checking of records we require:-
 ADDRESS MASTER where the previously assigned code is drafted and all personal details(aadhar
number and bank account number) as well as general details(name opf guardian, name of guarantor,
phone no. of borrower and coloured photograph of borrower) is been mentioned.
 FI ENTRY where the new code of the borrower is drafted and bank account number & adhaar
number of the borrower is mentioned.
 At last cross check the details, if it is matched then the Field Mananger of the respective area will
inform his borrower about the same, and he is instructed to firstly pay all the dues to the company,
then only he will be liable to take the loan from the company.
55
(F) PUNCHING THE LOAN APPLICATION FILE INTO THE SYSTEM & SEPERATION
OF FI FROM THE LOAN FILE:
File will be sent to Sent files to file

Verification of files
authorized person feeding dept.
 It is mandatory to perform 3 months checking of that applicant’s file.
 After punching the file into the software, FI form from the loan application will be separated.
(G) DISTRIBUTION OF F.I.:
The entire FM wise bundled FI sheet is being received by coordinator from file feeding department
and arranged route wise, and then it is handled over to FI executive to conduct FI of the applicant &
its guarantor at its place.
(H) CONDUCTING FI BY FI EXECUTIVE:
MEANING OF FI:-
FI means Field Investigation where an office person goes and do the investigation regarding the borrower
and guarantor of a particular FI and check the creditability, reliability and social status of the borrower by
the third person.
56
It is very important procedure under Income Generation Loan because sometimes Field Manager as well
as Area Manager may grants loan of higher amount then his repayment capacity. So, for re-checking the
creditability and reliability of the borrower. The procedure of Field investigation is done by the office FI
executives.
PURPOSE OF FI:-
 To check the amount as mentioned in the application form will be paid by them or not then the office
employee has the right to reject the application form which is called negative FI.
 To check the creditability of the borrower.
 To cancel or reduce the amount of the application if amount is found inappropriate.
PROCEDURE:-
For checking the FI the following procedure is been followed:-
 All the pre FI which are received in the office will be entered in the system along with the area of FI and
the name, address and phone no. of the respective Field Manager will be displayed automatically.
 The no. of files received under Pre FI will be written and the total of all the files received in an area will
be calculated.
 Maximum number of files that can be checked in one day should not be more than 35.
After applying successfully for the loan with defined purpose and submitting the supportive documents
(KYC and photographs). There after proceeds to verify all the facts that applicant mentioned in his
application for loan. A field investigation process is initiated to confirm and validate everything stated in
the application form. Area manager is sent to applicant’s place of residence to ascertain the facts. The
references provided in the application are cross checked and verified.
57
The FI conducted by FI executive plays a major role in building the foundation of creating quality loan
portfolio & timely repayment. The FI is to be conducted for both applicant & guarantor, and on the basis
of FI, the executive has to give his report about applicant as a positive (+ive) or negative (-ive) for loan
product. The reason for negative FI should be mentioned in the FI report.
While conducting FI, FI executive has to examine & cross check all the aspect of our product such as:-
• The sourced out application is from the defined FM territory or not.

• It is within the defined km. radius or not.
#
• Loan should be for income generation purpose only.

#
• Access repaying capacity of the borrowers

• Guarantor ship of the guarantor
#
(I) UPDATING OF FI IN THE SYSTEM:
All the reports of the FI conducted by the FI executive is being collected by the coordinator & on the
basis of reports, applicant status i.e. positive or negative is being updated in the software to generate
list of the eligible positive applicant for the loans.
58
(J) APPROVAL OF FI IN THE SYSTEM:
Under the software, the approval of FI is done in the system
where all the FI are checked and are approved for granting loan. If
any of the file is negative it will not be shown for approval.
(K) SANCTION OF FI:
Under add sanction, the approval file will be sanctioned. For sanctioning a file, approval is very
important. Under sanctioning the FI code is mentioned and the date of approval will be selected.
There is a predetermined date for the same i.e.
1. If the current date is between 05-14 then the start date will be 15.
(L) AGREEMENT OF BORROWER AND GUARANTOR:
 Both the depositor & guarantor should not be lawyer, policeman, unmarried and widow.
 The rate of interest will be annually and if any other rate inserted in future, it will be paid by loan
taker.
 Both borrower and guarantor will be having combined responsibility to pay the loan of prescribed
amount.
 The cheque issued by the loan holder whenever presented in Bank should be presentable and if any
dishonor arises it will be taken and studied as under Negotiable Instrument ACT, 1881.
 The company may demand the loan amount and the borrower has to pay it within 48 hrs. of demand.
59
 If the installment is not paid on time then 3% compound interest will be paid monthly in addition
Rs.500 will also be paid on per EMI.
 Any notice send on permanent address or temporary address will be considered legal within 3
working days.
 The guarantor is full responsible for the guarantee and he can’t revoke his guarantee, till full loan
amount is been paid.
 Being incapable person (i.e. idiot, lunatic etc.), dissolution and death of the guarantor will make him
free from any other future dealings if notice of above is approved but the loan holder will have no
effect of the same.
 One “Deposit Service Reserve Account (DSRA)” will be opened and the installment paid by
borrower will be noted down in the same along with date.
 The amount deposited in DSRA will be interest free.
 The utilization of loan will be same as directed, if it is utilized for some other purpose or for same
illegal work it will not be accepted, and no further loan will be issued.
 An arbitrator will be responsible if any conflict arise between borrower and guarantor. The place of
arbitration will be Agra.
 The process of arbitration will take around 40-45 days and both the guarantor and borrower has to
agree to it.
 The loan holder pledge to:
o If the loan amount is not paid on time then the CA will check his accounts and borrower will
cooperate to this.
o The borrower will submit the income statement to the company.
o Any new credit if taken will be informed to the company first.
 The account of the borrower will be closed after minimum 6 months of taking loan.
60
(M) PREPARING DISBURSEMENT PLAN:
Once the applicant wise FI status is being updated in the software, the next immediate step is to
process the disbursement plan FM wise for all the positive status applicants. Below mentioned
following process is to be followed to prepare the disbursement plan specifying the actual status of
the FM & its applicants.
Preparing Disbursement Plan is very important, as any wrong borrower should not get the loan, and
any missing document is re- checked under this.
Checking of all
running
The disbursement previous loans
Clubbing of all
plan will be the applicants
communicated to FM wise
concerned FM, AM
& RM
Maximum gross
amount i.e. Rs.
It will be 5,00,000 will be
forwarded to disbursed per
internal auditors, month
ED & WTD
The disbursement
If FM do not deposit plan FM wise will
the amount, then be analysed
NDA will be average
of last 3 months as Outstanding
decided by VP amount againt FM
will be deposited by
him
(N) DISBURSEMENT:
Disbursements are always made at the field manager’s place in his presence with the details of
repayment schedule. At the time of disbursement, borrower has to sign the disbursement sheet. The
executive has the right to cancel loan file on the spot in case of unmatched physical verification.
61
Since the loan amount is to transfer through NEFT, photo is not required. But the disbursement sheet
should contain borrower signature.
At the time of NEFT some information of borrower is matched and checked once again. It includes
the following:-
 Bank A/c Number of the borrower
 IFSC code as written on the cheque
 FI Number of the borrower
In some of the cases the Bank A/c Number is not similar, than the NEFT will be done after manually
checking the file. If it is not matched then loan will not be granted to him.
If the IFSC code of the concerned bank is not mentioned in the previous records of the company,
then it will be taken from Google itself.
Before doing the process of disbursement, all the files whose NEFT is to be done will be audited and
they will put an eye on the following:-
 ECS form attached in the loan file
 Pre FI of borrower and guarantor
 Bank A/C Number
 FI and Signature of both the parties
If any file is found in which the above mentioned forms and information is missing that files are kept
on hold and it will be re-checked with the help of manual files and they will be granted loan
afterwards.
At the end of all the disbursement of the concerned FM, the signature of FM should be taken on the
disbursement sheet.
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(O) CALCULATION OF IGL:
Amount of loan 70,000
Rate of interest 9%
Tenure of Loan 24 months
Amount to be paid by borrower in 24 months 82,600 (70,000+70,000*9/100*2)
EMI 82,600/24=3,441
Total amount disbursed by the company 70,000
(P) ACCOUNTING OF LOANS:
It is one of the most important procedures being conducted at the time of disbursement of loan. The
sheet being prepared for NEFT and the bank statement are re-checked by the accounts department.
For granting the loan to the borrowers a NEFT sheet is been prepared which is sent to CBI (Central
Bank of India) / IDBI Bank / Andhra Bank. The banks grant loan to the parties within 1 day and sent
the statement to the company on the same day, known as bank statement. The statement they provide
includes Name, amount of loan being disbursed, disbursement date and IFSC Code as mentioned in
the passbook, in an unorganized manner which is firstly bifurcated as per the need and requirement
of the company.
The NEFT sheet provided by the company includes, party name, disbursement date, NEFT date, FM
name and code, Reference No. (The number allotted to each case while applying for loan), amount
of disbursement and IFSC Code.
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Both the statements are matched together, with the help of party name, amount of loan and IFSC
code (optional). The whole procedure of accounting include reconciliation of account with reference
to change in the amount (increase/decrease) if any, or Wrong NEFT is been checked. As the rule of
accounting says that “Debit should be equal to Credit” in the same way, the bank statement provided
should match with the NEFT sheet with respect to each and every date and amount including no. of
cases in each day of the particular bank.
(Q) POST DISBURSEMENT VISIT (PDV):
 BY OPEARTIONS TEAM:
After 7-10 days of the disbursement, of all the disbursed cases 100% PDV should be conducted by
AM to access the utilization of the loan amount and cross check whether the purpose mentioned is
fulfilled or not. If not then AM should warned and instruct the borrower to utilize the loan amount
for said purpose.
 BY INTERNAL AUDITOR TEAM:
At least after 15 days of the disbursement, PDV should be conducted by internal auditor to access
the utilization of the loan amount and cross check whether the purpose mentioned is fulfilled or not.
It will be conducted independently without the interference & disbursement of FM/AM/RM, so to
access the real information from the borrowers.
There should be at least 20 days time between AM PDV and Internal Auditor PDV.
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(R) INSTALLMENT SHEET PRINTING/ DISTRIBUTING/ ACCOUNTING:
 On each due date, the accounts department shall print installment due sheet and hand over to
respective Regional Manager.
 The respective area manager shall collect installments due sheet from regional managers and field
manager shall collect installment due sheet from respective area manager.
 The accounting for disbursement shall be done in accounts department.
(S) COLLECTION OF DUES/EMI:
The Field Managers shall be primarily responsible for collection of dues under close supervision of
Area Manager/ Regional Manager. On the aforesaid day of collection AM should ensure that FM
must be at his place of operations only. On the scheduled day of collection, the FM must collect the
installment amount from the borrower and same should be updated in the collection cards. The
amount can be received in cash or it can be automatically transferred to the Bank A/c of the
company itself. But FM should inform the company about the payment received from the borrower
on the same day, and it will be put as a record.
Collection of due installments of borrowers shall be done preferably by ECS system. And if ECS
system is not available then second preferred system is lodging of EMI, PDC cheques for collection.
For operational convenience same shall be presented for payment by HO and all cheques presented
for payment shall be marked in system. Daily lodgment report of cheques can be accessed by PDC
monitoring hub at HO for any cheque for presentment and any discrepancy shall be notified
immediately.
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The dates are assigned by the company to collect the EMI from the borrowers. It is as follows:-
 If the current date is between 05-14 then the start date will be 15.
People who are going to collect the amount from field must bring the following details:
(a) Time of receipt of amount
(b) Sign of the person depositing cash
The report should be analyzed on daily basis.
NACH:
National Payments
Corporation of India (NPCI)
has implemented “National
Automated Clearing House (NACH)” for Banks, Financial Institutions, Corporate and Government a
web based solution to facilitate interbank, high volume, electronic transactions which are repetitive
and periodic in nature. NACH System can be used for making bulk transactions towards distribution
of subsidies, dividends, interest, salary, pension etc. and also for bulk transactions towards collection
of payments pertaining to telephone, electricity, water, loans, investments in mutual funds, insurance
premium etc.
National Automated Clearing House (NACH) is a centralized system, launched with an aim to
consolidate multiple ECS systems running across the country and provides a framework for the
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harmonization of standard & practices and removes local barriers/inhibitors. NACH system will
provide a national footprint and is expected to cover the entire core banking enabled bank branches
spread across the geography of the country irrespective of the location of the bank branch.
With the implementation of NACH system, NPCI intends to provide a single set of rules (operating
and business), open standards and best industry practices for electronic transactions which are
common across all the Participants, Service Providers and Users etc. NACH system also supports
Financial Inclusion measures initiated by Government, Government Agencies and Banks by
providing support to Aadhaar based transactions.
The NACH system facilitates the member banks to design their own products and also addresses
specific needs of the banks & corporate including a refined Mandate Management System (MMS)
and an online Dispute Management System (DMS) coupled with strong information exchange and
customized MIS capabilities.
The NACH system provides a robust, secure and scalable platform to the participants with both
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transaction and file based transaction processing capabilities. It has best in class security features,
cost efficiency & payment performance (STP) coupled with multi-level data validation facility
accessible to all participants across the country.
Banks switching from ECS to NACH
National Automated Clearing House (NACH) is useful for corporate and financial institutions
that make payments in bulk like dividends distributions, salaries, interests, pensions, etc.
The Indian payment industry enters the next level with National Automated Clearing House
(NACH). Started by the National Payments Corporation of India (NPCI), NACH aims to create a
better option for facilitating clearing services than the existing Electronic Clearing Service (ECS)
system.
NACH is a centralised, web-based clearing service that can ease the work of banks, financial
institutions, the government and corporate by consolidating all regional ECS systems into one
national payment system, thereby removing any geographical barriers in efficient banking.
The service is now active in all Indian banks with core banking facility. It comes in two variants –
ECS Credit and ECS Debit. The significant benefits to bank customers include automatic debits
from their account for bill payments (telephone, electricity, etc), loan instalments, insurance
premiums and more.
Not only this, NACH is useful for corporate and financial institutions that make payments in bulk
like dividends distributions, salaries, interests, pensions, etc.
There are four types of electronic clearing services:-
• Local ECS
• Regional ECS
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• National ECS
• NACH
While the Local ECS, Regional ECS, National ECS are controlled by the Reserve Bank of India or
by the designated commercial banks, NACH functions on all India platforms managed by the
National Payments Corporation of India (NPCI).
Faster turnaround:-
NACH provides a variety of facilities that include standardising and digitising the mandates,
simplifying them, reduction of the activation time and reducing the cost of operation. The process of
activation of ECS mandates had a longer turnaround time (30 days) than what it is expected to be in
NACH (10 days). Also, the Aadhar-based benefit transfers have been simplified.
For customers, this means payments of premiums, bills and loan instalments etc. on time every
month or specified time period. Banks, on the other
hand, save time and minimise their dependencies on cheques or other such paper-based transactions.
Large organisations strand to gain as they can provide better customer service by disbursal of bill
clearances, salaries and pensions on time without having to undergo numerous steps. Also,
organisations can take advantage of automatic crediting of allowance benefits or scholarships etc.
For them, also, the paper-based transactions are reduced, thus facilitating their other work.
Easy registration:-
NACH is a one-time registration process, like ECS, that provides flexibility to investors who can
make a single payment for any lump-sum investment or through Systematic Investment Plan (SIP).
However, the time taken for the registration process is said to have been reduced in NACH.
The registration process itself has not changed; the only thing you need to do is collect the NACH
form instead of the older ECS form.
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Effect on SIPs:-
Keeping in view the circular issued by NCPI, it is better to use NACH forms for transactions as
banks may soon stop accepting ECS forms altogether. You can get the NACH form from AMC
(Asset Management Company) offices or their websites.
The existing ECS mandates will continue till their validity expires. Once the tenure for the SIP is
over, the NACH form has to be filled for the same in order to renew it.
New registration for SIP does not require many steps; investors only need to submit the ‘One Time
Mandate & SIP’ form. The latest copy of the form is available on the website.
The turnaround time (TAT) remains unchanged temporarily; which means the registration of SIPs
will be done within one month (30 days) from the date of submission of the application. A reduction
in turnaround time to 10 days is expected in the future for transactions via NACH.
(T) COLLECTION DEPOSIT PROCESS:
 On the scheduled collection date when all the collection is being collected then immediately it
should be deposited into the company’s account by the FM. After depositing it into the account FM
should immediately inform his concerned AM about the collections deposited detail i.e., amount
deposited, date of deposition and bank name where deposited.
 After receiving the information about the deposited collection AM should ensure whether scheduled
collection is being deposited or not from accounts section.
 Once cheque/ECS gets bounced then it will not be re-presented again and list of all bounce cases
shall be feeded in system. CIT/CCT shall call all irregular customers to make payment of bounced
EMI immediately with in 24 hrs and record their feedback for future action. It is the primary
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responsibility of the FO that he collect/recover the installments. Therefore he shall follow and be
present in the entire recovery process.
 For balance cases soft and hard recoveries can be initiated. Same shall be suggested by concerned
BM on the basis of his learning from concerned FO. Soft recoveries means where mere by calling
borrowers or visiting borrowers amount has been recovered from borrowers. Whereas on the other
hand hard recoveries will be required where borrower is trying to turning out to be intentional
defaulter.
Cheque/ECS bouncing rate and rate of hard/soft recovery may be one of the parameter for evaluating
performance of any branch.
 Upon receipt of any case or after expiry of 15 days HO get involved automatically and shall send
demand notice and demanding payment of amount immediately or within 7 days from date of service
of notice. It may be mentioned in notice that failing payment of amount may result into visit by
company officials at place of borrowers and guarantors and may result into embarrassment situation
for him.
 After expiry of above period for balance unpaid cases, recovery team along with one advocate shall
move from controlling office/HO for collection and shall visit borrower and guarantor if required act
and try to recover amount from customer with reference to demand notice. Maximum time allowed
for this activity is up to next 15 days. If recovery team learns in between 15 days that no payment
can be recovered without legal efforts then they must refer case to legal department immediately.
 If payment not received by all mean then case shall be handed over to legal department for recovery
by way of legal means i.e. action under 138, arbitration or as suggested and decided by management.
 If amount not recoverable finally then suitable settlement shall be done and account shall be closed
& write off.
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(U) UPDATION OF COLLECTION IN THE SYSTEM:
Update it
AM receive to Updation of
information regional collection
from FM manager details
RM reports Upadte in
Record it the
the collection
on day accounting
details FM
to day system &
wise to the
basis software
back office
(V) AUTHORITIES:
 All staff relating to front office and Field Staff shall be under direct supervision of Sr. Zonal
Coordinator.
 It will be responsibility of Senior Zonal Coordinator to ensure that all records relation to front office
and field are properly maintained.
 All staff relating of back office and accounts departments shall be under direct supervision of
Finance controller.
 All the staff under back office and accounts department shall report to Finance Controller and all
queries relating to accounts and back office shall be sorted out through finance controller.
 It will be responsibility of Finance Controller to ensure that all records of accounts department and
back office are properly maintained.
(W) ALLOWANCES TO DISBURSEMENT EXECUTIVES:
Monthly meeting with internal auditors should be arranged on every 5th day of the month for sharing
outcome in details with VP & FC.
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PROCEDURE MANUAL & ROLES AND

RESPONSIBILITIES OF LOAN Against
property
The loan against property scheme was started in April, 2015 and it is applicable in many states
including some areas of Rajasthan.
(A) ELIGIBILITY OF BORROWER:-
 The borrower should be individual.
 The age limit of the borrower should be between 21 yrs. to 50 yrs.
 He should have passed High School. For confirmation attach the photocopy of Mark sheet.
 The borrower should attach the photocopy of Voter Id Card / Aadhar Card whichever available.
 The civil status of the borrower will be checked by the company.
 He can take loan of minimum Rs. 1,00,000 and it can exceed up to Rs. 20,00,000.
 The total income should be more than 50% of the borrower’s total salary.
 Life Insurance should be of double the amount of which loan is been granted. The policy will be
assigned in the name of the company. At least one year have been passed after taking the Life
Policy. Latest Insurance Slip will be annexed thereto.
Income Proof for Salaried Person:
 For Government employees 3 months’ Salary Slip.
 Form 16 of 2 years for Salary employee.
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 Form 16(A) for other than Salary employee.
 Bank Statement Salary Slip.
 Sales return Slip.
Income Proof for Self- employed Person:
 Copies of last three years income tax returns (along with copies of computation of income/Annual
accounts (Balance Sheet, Profit &Loss A/C), if any).
 Copies of the last 6 months statements of all active bank accounts that your business income details.
 Stock statement if any trader deals in stock market.
 Raw material purchasing &selling slip if any trader deals in manufacturing firms.
(B) GRANTING OF LOAN:-
 The tenure of loan will be 12/18/24/30 months.
 The purpose of loan will be either for personal purpose or for his business.
 Table for per month E.M.I.
PERIOD LOAN LOAN LOAN LOAN

(IN AMOUNT AMOUNT AMOUNT AMOUNT
MONTHS) (RS. (RS. (RS. (RS.
1,00,000) 2,00,000) 3,00,000) 4,00,000)
12 9833 19666 29500 39333
18 6555 13110 19667 26222
24 4917 9833 14750 19667
30 3933 7867 11800 15733
 The processing fees will be taken as 2%p.a. of the total loan amount and it is a onetime expense.
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 The interest rate will be 18% p.a. (flat).
 The operation area will be urban and semi-urban areas. The area should not be covered under
agriculture area.
(C) SECURITY PURPOSE:-
a. Regarding mortgage of property stamp paper of Rs.100 is required to be purchased by the borrower in
his name.
b.Under group loan the borrower should take guarantee along with other borrower’s.
c. In case of death of the borrower, the remaining instalments will be paid by guarantors and other
borrowers.
d.It is compulsory, that other group borrower must be owner of the property. The age of the person
should not be more than 60 years, including the period of current loan’s instalments.
e. If the property is on rent, then tenant should agreed to keep it on lease with signed agreement.
f. Pre-agriculture land should contain legal documents insuring its conversion to residential property.
(D) POINTS TO REMEMBER:-
 The L.S.R. (legal search report) of the mortgaged property should be conducted by the advocate
assigned by the company. The valuation of such property will be done as per pre-assigned rules of
the company, which will be independent from valuation of other property.
 The date of installment is pre decided and it will be collected by field manager and deposited in the
respective bank.
 If the installment is not paid on the disbursed date, then additional interest rate @ 3% will be charged
on the remaining amount.
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 Borrower will be informed about the disbursement date through phone call.
 The due date of installment will be as follows:-
g.Between 01-07 1st of the month
h.Between 07-14 7th of the month
i. Between 14-21 14th of the month
j. Between 21-31 21st of the month
 The amount of installment is to be paid in the following banks:-
a. State Bank of India
b.Punjab National Bank
c. Bank of India
d.Corporation Ban
(E) PROCEDURE OF APPROVAL OF LOAN:-
The borrower will meet The Credit Appraisal

in agra office itself, the Positive F.I. will be Memorandum of the
documents should be approved for further property wil be done, for
filled with signatures as transactions the same borrower will
well be informed
The documents should

be submitted to the Area Records of Bank Any missing documents
Manager. The record Account from last 6 will be send by the
will be maintained in a months is compulsory borrower
register
A Telephonic The offer letter will be

CIBIL and CRIF report
Verification Record of collected from the
of the applicant
the borrower is done Regional Manager
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TransUNION CIBIL (Credit
Information Bureau India
Limited)
CIBIL is a Credit Information company,
situated at Mumbai, Maharashtra in the year
2000.
CIBIL is India’s first Credit Information Company (CIC) founded in August 2000. TransUnion
CIBIL collects and maintains records of an individual’s payments pertaining to loans and credit
cards. These records are submitted to TransUnion CIBIL by member banks and credit institutions,
on a monthly basis. This information is then used to create Credit Information Reports (CIR) and
credit scores which are provided to credit institutions in order to help evaluate and approve loan
applications. TransUnion CIBIL was created to play a critical role in India’s financial system,
helping loan providers manage their business.
History and origin
For credit grantors to gain a complete picture of the payment history of a credit applicant, they must
be able to gain access to the applicant's complete credit record that may be spread over different
institutions. CIBIL collects commercial and consumer credit-related data and collates such data to
create and distribute credit reports to its Members which are credit institutions and banks in India.
CIBIL’s over 2600 strong member base includes all leading public & private sector banks, financial
institutions, non-banking financial companies and housing finance companies.
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The Credit Information Report (CIR) and CIBIL Score are used in the loan approval process. Once
the loan provider has decided which set of loan applicants to evaluate, it analyzes the CIR / Score in
order to determine the applicant’s eligibility. Eligibility basically means the applicants ability to take
additional debt and repay additional outflows given their current commitments. Post completion of
these first 2 steps the loan provider will request for the applicants income proof and other relevant
documents in order to finally sanction the loan.
The CIBIL Score and Report help loan providers identify consumers who are likely to be able to pay
back their loans. An individual with a credit score above 750 has better bargaining power with the
lenders, since he is perceived as a responsible borrower. Since consumers can now access their
Credit Scores and CIRs directly from CIBIL at the cost of INR 500, they can see for themselves how
they are perceived by the lenders before applying for a loan. Hence, CIBIL empowers both loan
providers and individuals to see their financial and credit history more clearly and hence, take better
and more informed decisions.
Milestones
 2000: TransUnion CIBIL Limited (formerly Credit Information Bureau (India) Limited) was
incorporated based on recommendations made by the RBI Siddiqui Committee.
 2004: Credit bureau services are launched in India (Consumer Bureau).
 2006: Commercial bureau operations commenced.
 2007: CIBIL Score, India’s first generic risk scoring model for banks and financial institutions, was
introduced.
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 2010: Two firsts for the credit industry in India with the launch of:
CIBIL Detect: India's first repository for information on high-risk activity.
CIBIL Mortgage Check: The first centralized database on mortgages in India.
 2011: CIBIL Score is made available to individual consumers.
 2017: TransUnion CIBIL launches CIBIL MSME Rank to drive credit penetration in Micro, Small
and Medium Enterprises and helping lenders assess risk better
Divisions
CIBIL houses credit on over 600 million trades across individuals and businesses, organised into
three divisions: Consumer Bureau, Commercial Bureau and MFI Bureau.
The Consumer Bureau was launched in 2004 with 4 million records, and now maintains more than
600 million records. The Commercial Bureau was launched in 2006 with 0.7 million records, and
now maintains more than 32 million records.
WHAT IS THE CIBIL RANK?
The CIBIL RANK, summarizes your CCR in the form of one number. The rank is similar to the
CIBIL Score provided for individuals. However, it is provided from a scale of 1 to 10, where 1 is the
best rank that can be achieved. The rank is only provided to businesses that have credit exposure of
Rs. 10 lakh to Rs. 10 crore.
Most importantly, CIBIL Rank indicates your company’s likelihood of missing payments, which is
one of the key factors considered by a lender while evaluating a loan application. The closer your
rank is to 1, the better are your chances of securing a loan.
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WHAT IS YOUR CIBIL CCR?
A CIBIL CCR is a record of your
company’s credit history. This is
created from data submitted to CIBIL
by lending institutions across India.
The past payment behaviour of a
company is a strong indication of its
future behaviour. It is therefore
important to understand that the CCR
is heavily relied on by loan providers
to evaluate and approve loan applications.
CIBIL MarketPlace was created with one clear goal- to make your loan
search simpler and faster.
CIBIL MarketPlace is an online platform which provides tailor-made loan and credit card offers
based on your CIBIL Score and Report. Here you get offers for Credit Card, Personal Loan, Home
Loan, Gold Loan and Loan against Property, based on the lenders eligibility criteria*.
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At CIBIL MarketPlace you can also compare interest rates, credit limits, annual fees and other
features of an offer and apply for your preferred loan or credit card with the participating
bank/financial institution, all at one place.
Your CIBIL Score plays a critical role in the loan approval process. Lenders check your CIBIL
Score before approving your loan application. Higher your CIBIL Score, higher are the chances of
your loan application getting approved.
CIBIL MarketPlace membership is available for 3 months at no additional cost or charge when you
get your CIBIL Score.
PRODUCT HIGHLIGHTS
 Increased Likelihood of Loan ApprovalA higher CIBIL Score takes you one step closer to loan
disbursal
 Comparative AnalysisGet a comparative analysis of multiple offers from different lenders
 Save Time and Money24x7 access to the portal for available loan offers, all at one place. This saves
time and effort both for consumers and lenders.
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CRIF high mark
CRIF High Mark is India's only credit information bureau catering to all borrower segments –
MSME and Commercial borrowers, Retail consumers, Microfinance borrowers. It is the pioneer in
building and operating the country's first and world's largest Microfinance Bureau Database. CRIF
High Mark provides Analytics, Data Management and related Software solutions promoting a more
mature credit culture in the Indian economic system and sustaining the financial needs of businesses
and consumers. CRIF High Mark is a comprehensive information provider across the vital
segments of micro-finance, consumer and commercial.
We are India's leading credit information solutions provider. We have the most exhaustive and
extensive databases in India providing top-end and in-depth information solutions to banks and lending
institutions ranging from micro-finance, consumer and commercial segments.
Our one-stop credit information solutions and packages have been developed in-house and through a
rigorous bottom-up process that focused on collating scores of data points for each record before
setting up our systems and technology to process them.
Our information tools provide users with precise, easy-to-read, and extensive reports that enable any
financial services organization to process information quickly and accurately. Our analytics tools are
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highly effective in identifying high risk customers, and forecasting trends on geographies, recoveries
and lending.
This gives CRIF High Mark the edge in providing integrated data solutions tailored across verticals
and customised to the needs of all kinds of financial services firms.
Our history and background
High Mark was founded in 2007 and received a Certificate of Registration from The Reserve Bank
of India to operate as a Credit Information Bureau in India in 2010.
In June 2014, CRIF, a leading global company that specializes in the design, development and
management of credit reporting, business information and decision support systems for Consumer &
Commercial Lending, acquired a majority stake in High Mark.
CRIF, operates in 4 continents supporting more than 6,300 banks and financial institutions and
44,000 companies. CRIF manages credit bureaux in Italy, the Czech Republic and in the Slovak
Republic. The company has been involved in the development of credit bureaus in Ireland, Vietnam,
Bangladesh, Tajikistan, Indonesia, Philippines, Jordan, United Arab Emirates, Jamaica, Russia,
Morocco and Benin. It is the market leader in continental Europe in the field of banking credit
information and is one of the main international players for business & commercial information and
credit & marketing management services. CRIF is an independent company with 90% of its capital
held by founder members and management, and the remaining 10% by various credit institutions.
Following the acquisition, High Mark Credit Information Services was renamed CRIF High Mark
Credit Information Services, bringing together advanced identity management technology from its
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existing research team and drawing global best practices in top tier bureau technology
from CRIF S.p.A, with an aim to create India's most innovative credit bureau.
CRIF High Mark's highly talented, motivated and experienced team is backed by CRIF’s global
expertise, an experienced Board of Directors, and a community of investors comprising top financial
institutions in all relevant segments.
Our key operating principles
In keeping with being a custodian of valuable private and sensitive information, and being a premier
credit bureau, CRIF High Mark has adopted four Operating Principles.
Reciprocity: CRIF High Mark will follow the "Principle of Reciprocity˜ in its dealings with
members. This implies that, Institutions can access credit information supplied by CRIF High Mark,
subject to their Membership and Sharing of data with CRIF High Mark. However, Specified Users
(as per CICRA) will be exempt from this requirement.
Neutrality: CRIF High Mark is a neutral service provider. It will treat all members and borrowers
with honesty, transparency and without any bias.
Efficient Consumer Dispute Handling: CRIF High Mark will attempt to efficiently and promptly
resolve requests / complaints from consumers.
Security Standards: Inviolable security is core to CRIF High Mark's business and operations. CRIF
High Mark follows the highest standards of security, at all levels, functions and in all areas of its
organization. Further, CRIF High Mark will also work with its members to help achieve iron-clad
security.
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TELEPHONIC VERIFICATION REPORT (TVR)
Simultaneously Customer interaction team (CIT) or customer care team (CCT) shall ensure
telephonic verification of customer/guarantor/introducer/references from the pre-recorded data
received from branch side & record transcript of discussion in as per questionnaire of company.
(Detailed activity process shall follow separately).
TVR shall be uploaded in system & shall be accessed by CAT for credit appraisal.
TVR FORMAT
TVR DONE BY:- DATE:-
MOBILE NUMBER:- BRANCH:-
APPLICANT NAME:-
CO-APP NAME:- GTR NAME:-
LOAN AMOUNT:- TENURE:-
END OF USE:-
PROPERTY DETAIL:- TYPE:-
MARKET VALUE:-
AREA:-
LOCATION:-
DISTANCE FROM BRANCH TO RESIDENT
SOURCE OF INCOME:-
AGRICULTURE DAIRY SALARY BUSINESS
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TOTAL INCOME OF APPLICANT:- INCOME, OTHER THAN APPLICANT:-
TOTAL FAMILY MEMBERS:-
CHILDREN STUDYING:-
TOTAL FAMILY EXPENSES:-
INFORMATION ABOUT ANY OTHER LOAN OR LIABILITY-
S.NO. F.I. LOAN EMI PAID
NO. AMT AMT EMI
RELATIONSHIP WITH GURRANTOR:-
GURRANTOR SOURCE OF INCOME:-
GURRANTOR INCOME:-
GURRANTOR PROPERTY:-
HOW MUCH EMI CAN PAY:-
Every Area & Regional Manager has obtained the Application which is duly entered in their register
for their own record. On the basis of obtained Application Regional Manager will have to go on
applicant’s address for Pre-FI & Face to Face interaction , They have to write on the separate page
which the Regional Manager had discussed.
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In this step, Company investigate the background, status, and detail investigation of the parties
which includes Applicant, Co-Applicant, and Guarantor. Company also investigate the detailed
information related to property which is on the name of Applicant. Company also investigate the net
income and expenses as applicant are able to pay the Equally Monthly Instalment (EMI) on time.
Basically, Company also checked the Credibility of the Applicant.
Regional Manager has obtained correct application with their report & has to prepare a list & to
submit in Agra Head Office. After the Regional Manager FI report & General FI, If Field
Investigation is positive then File will do by FIPMS Office.
When you go for a personal discussion, carry all the original documents pertaining to the
information provided on the application form. Do not submit any forged documents or lie about the
financial details requested.
The company's field investigation will follow; the company might outsource this task to third-party
verification agents.
CLIENT APPRAISAL MEMORANDUM:
It is related to the short summary of the details of the Applicant in a proper format like Applicants
details about business, Co-Applicant & Guarantor details. In this memorandum we have to include
the expenses and income of the Applicant by which we can decide the amount of EMI which have to
pay the Applicant.
The report also mentions the deviations as if there are no deviations then they written as none in
deviation. Company have to mention the Zonal Manager Recommendations. And in this report have
Credit Recommendations and approving authority comments and have auditor remarks.
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CLIENT APPRAISAL MEMORENDUM
LAP
DATE:- 1/6/2016
APPLICATION NO:-
SOURCING BY : F.M.Code 170
APPLICANT NAME:- : MR.RAMVIR SINGH S/O SHRI KARAN SINGH ( 05/01/1986)
CO-APPLICANT NAME:- : Smt.REKHA DEVI W/O SHRI RAMVIR SINGH ( 26/05/1988)
GUARANTOR NAME:- : MR. HARIOM S/O SHRI JASWANT SINGH (01/01/1973)
BRANCH:- : ALIGARH
PRODUCT:- : LAP
APPLICANT REQUIREMENT:- : Rs.100000/- FOR 24 MONTHS
PURPOSE:- : FOR BUSINESS
DATE OF FI:- : 31/05/16 FI No
DISTANCE FROM BRANCH:- 40.KM.
SECURITY:- : Mortgage of PLOT AREA 325 sqyd.
MOBILE 9759321679
APPLICANT & PROFILE- FTB.
AADHAR NO. : 4412 8126 6970
रामवीर स िं ह पु त्र श्री कारन स िं ह ग्राम भोजगढ़ी पोस्ट सिलौठी िह ील ा नी के है I
यह अपने घर पर परचू न की दूकान करिे है I
दूकान में ही इनके पा मधु दन नाम े डे री भी है I
परचू न की दूकान मैं F I के मय लगभग 35 े 40 हजार का ामान था I
सज े रोजाना की शु द्ध बचि लगभग 500 े 700 रुपए िक की हो जािी है I
दूध की डे री े भी लगभग 300 रुपए की बचि हो जािी है I
इ प्रकार लगभग 800 रुपए प्रसिसदन िक की शु द्ध बचि I
APPLICANT FAMILY:-
आवे दक के मैं सपिाजी पत्नी रे खा दे वी ( ह आवे दक ) व दो लड़के है I
िं पसि रे खा दे वी के नाम पर है I
आवे दक के सपिा के पा 4 बीघा कृसि भू सम है I
GUARANTOR PROFILE:-
इ ऋण आवे दन मैं हरी ओम पु त्र श्री ज विं ि स िं ह गारिं टर है I
यह चीनी के गोले व गोली टॉफी का काम करिे है I
इनके पा पै िृक िं पसि है I
यह लगभग 10000 रुपए महीना िक कमा लेिे है I
OTHER LOAN DETAIL
CIBIL STATUS-
01.Applicant- Cibil score -1
02.Co-Applicant- cibil score -1
03.Guarantors- Cibil score -1
PROPERTY & OTHER ASSET DETAIL-
01.Property is in the name of REKHA DEVI W/O Shri Ramvir Singh .
02.Property area is 325 sqyd..Market value as per FI is Rs 6 lac..
03.Same property is going to be mortgaged with us.
हमारे लीगल सवभाग ने इ म्पसि को बिंधक रखने की राय दे दी है I
CALCULATION OF FREE CASH FLOWS
INCOME SOURCE:- BUSINESS 20000

(Monthly) RENT 0
FARMING 0
MEDICAL STORE
SALARY 0
LIVESTOCK 0
(A) TOTAL INCOME:- 20000
EXPENSES:- HOUSE HOLD EXPENSES 7000

(Monthly) ANY LIABILITY SALARY 0
CHILDRENS FEE 900
HOUSE & SHOP RENT 0
(B) TOTAL EXPANSES:- 7900
(A)-(B) NET CASH FLOW:- 12100

LOAN SCHEME FOR DISBURSEMENT-
PRE-FI
RATE%:- 18.00% PROPOSED EMI< 6050
FOIR 50% FCF 6050
TENURE(in months) 24 ACTUAL FH SMI 5667
NO OF EMI:- 23
LOAN AMT AS PER
ADV:- 1 100000
PROPOSED EMI
P.FEE%:- 2% AGR VALUE:-(Except Processing fee) 136000
INTEREST:- 36000
P.FEE 2000
14% Service tax 280
0.50% SWACH BHARAT CESS 10
NEFT AMOUNT 92043
FI STATUS:-
01.Both FI has been done and found positive.
PDD:- 89
01.Signed agreement.
02.PDC'S
04.Equitable mortgage of property.
05 Original Sale Deed
PENDENCIES:-
DEVIATIONS:-
Valuation and legal check on property and papers:
It is the next stage where the focus property papers and the relevant NOCs are in place. Police
investigation is on the level of Tehsil & the Company's lawyer will check the property papers for
their legality. Property should have registered from 13 years & they have their own transaction
record. The Company may also send an expert to visit the property. This expert could be a Company
employee or an associate with a reality firm.
In this Step have prepared The Legal Search Report (LSR) in which have mentioned the detail of
the property which is to be mortgaged as square metre of the property, location of the property. We
have checked the Previous owner of the Property, Present Owner’s name, whether any minor’s share
is there or not, whether the property is in possession of present owner? If yes, nature of proof. These
types of information we have checked in this process. This is a very important step for Loan against
Property as on this step mostly the loan application of the applicant’s are rejected due to their
illegalised property. This is a break and make situation for the Applicant’s.
(F) DOCUMENTS REQUIRED FOR APPROVAL OF LOAN:-
 Both the borrower as well as the guarantor should complete their proceedings regarding KYC (Know
Your Customer). The KYC should undergo with the legal registered address of both the parties and
the company will undergo the address as provided in the KYC form.
 Income tax return (Form-16) copy of last 3yrs will be annexed. The borrower who do not lie in the
filling of Income Tax Return should send there expenditure list of last 2 yrs. The F.I. master will
check it during F.I.
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 BORROWER & GUARANTOR’S PROFILE:-
Under Loan Against Property it is compulsory that guarantor should be from company itself. The
borrower issues a letter in the name of the company declaring that the information provided by him
is true and correct, and if any information provided is found to be incorrect, then the company shall
be liable to recall the advances, irrespective of the contracted terms of the loan and he will pay the
entire loan along with interest/penalty and other charges. He also undertakes to provide any further
information as company may ask from the borrower regarding guaranteeing of loan.
1. Name
2.Resident Status (Indian/Foreign)
3. Father’s / Husband’s Name
4. Present Address
5. Mobile No.
6. E-mail id
7. Date of Birth : ____/_____/______
8. Educational Qualification
9. Occupation/ Business :
 Name of Firm/Company:
 Address/Tel No. :
 Date of establishment :
10. PAN No.:______________________________
11. Bank A/c:
12.AADHAR no.
13. DETAILS OF ASSETS:
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 Immovable Property
 Movable Property
o Insurance Policies (Amt.Rs. In lacs)
o Shares / Debentures / Mutual Fund etc. (Amt. Rs.in Lacs)
o Term Deposits: (Amt. Rs.in Lacs)
o Other Investments (Amt.Rs. in Lacs) Attach list
o Vehicles: (Amt. Rs.in Lacs)
o Jewellery: (Amt.Rs. in Lacs)
o Capital Invested in Business (including Subsidiaries, Sister, Associate concerns. If Trust/Society,
give full details
14. DETAILS OF LIABILITIES:
 As Borrower: (Amt. Rs.in Lacs) from Banks/FIIs
 As Guarantor : (Amt. Rs.in Lacs)
15. Any other relevant particulars: (If need add separate sheet)
In support of the above declaration, borrower also encloses:
i. Balance Sheet, Profit & Loss Account, Trading Account, Capital Account (Audited / Unaudited)
personal balance sheet.
ii.Copies of Agreement / revenue records / society certificate in respect of land/building/flat owned
by me.
iii.Copies of Income Tax / Wealth Tax Returns / PAN Card / Passport/Telephone/Electricity
Bill/Assessment Order along with proof of payment.
iv.Other relevant documents.
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 PRONOTE:-
A written promise to pay money that is often used as a means to borrow funds or take out a loan.
The individual who promises to pay is the maker, and the person to whom payment is promised is
called the payee or holder. If signed by the maker, a promissory note is a negotiable instrument.
 SCHEDULE A,B &C:-
SCHEDULE A: - It considers all the hypothecated assets of the borrower with full description along
with the present value of assets. It is very important schedule under loan agreement because the
financing company will know the true picture of the borrower’s company assets.
SCHEDULE B: - Due date and amount of each installment will form part of Schedule B, and a card
is generated by the financing company of the same.
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SCHEDULE C: - All the pieces or parcel of land and/or house/building here-under have to be
specified here for identification the details like survey no, area, place and other details etc. for future
references.
 LOAN APPLICATION:-
Document on which the lender bases the decision to lend. A loan application is neither a pledge by
the applicant nor a commitment by the lender. Contains essential financial and other
borrower information. Detailed business plan, 3-year and loan-life current and projected income
statements showing profit and loss, balance sheet, and cash flow statement are required for a
business loan. Loan amount and purpose, period and means of repayment, and guaranties and/or
collateral offered are required of a company applying for a loan. Banks generally use standard forms
for the applicant to fill-in for a consumer loan. Also known as credit application.
 GUARANTEE AGREEMENT:-
This Guarantee Agreement is made between borrower and guarantors.
Where the Borrower & Guarantors requested SEIL to grant term loan to the Borrower subject to the
specific condition that the Guarantors shall unconditionally guarantee the repayment of the loan by
the Borrower, advanced by SEIL including interest, late fees, costs, expenses and damages etc. in the
event of default committed by the Borrower and also guarantee the due observance of terms and
conditions of agreement.
In consideration of SEIL granting term loan to the Borrower, the Guarantors have agreed to
guarantee repayments of all amounts due and/or which may become due from the Borrower to SEIL
subject to the terms and conditions hereinafter set forth.
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Now, therefore a guarantee agreement is witnessed as under:-
1. This Agreement witnessed that in consideration of the premises, the guarantors hereby agree to
indemnify SEIL against all loss and to pay and satisfy to SEIL on demand all dues from the
Borrower including installments due and to become due and interest, late fees, expenses, damages
costs etc. whether from "Borrower" solely or from the Borrower jointly with any other or others in
partnership or otherwise whether as principal or surety or otherwise.
2. The liabilities of the Guarantor/Guarantors under this Agreement shall be construed as joint several
and co-extensive with that of Borrower and co-guarantors, if any. This guarantee shall be a
continuing guarantee notwithstanding the death of any one or more of the Guarantors and shall be
binding on his/her legal representatives, heirs, successors and administrators.
3. In the event of demand being raised by SEIL in respect of dues under the Agreement, the Guarantor agree to
discharge it within 7 days of such demand.
4. Any notice may be served on the Guarantors personally or by sending the same in a prepaid cover to the
address registered with SEIL and when no such address is registered, to the last known place of address of
the Guarantor/s to be served and a notice so sent shall be deemed to be served on the third day following that on
which it is posted if sent by post, when personally delivered, on the receipt of the same at the address of the
party, when sent by the email or by fax-upon receipt of the confirmation. Any change in the address shall
be notified in writing to other party immediately.
5. The Guarantors agree that the SEIL may enforce its rights as a pledge or right of a lien on all goods, assets,
properties and all moneys standing to the credit of the Guarantors for payment of SEIL's debts against the
Borrower and/or Guarantors.
6. The death, insanity or insolvency of the Guarantors shall not affect the transactions or loans given by the SEIL
to the Borrower. Any notice to determine the guarantee on death, insanity or insolvency of the Guarantors will
95
terminate the guarantee only in respect of future transactions.
7. The Guarantors hereby authorize the Borrower herein to act as their agent to give acknowledgement of debt
in respect of the dues under this guarantee from time to time. The Guarantors hereby declare that they are at
all times bound by such acknowledgements of liability given by the Borrower from time to time.
8. The Guarantee shall be a continuing one till such time SEIL may have any claim against the Borrower
under the agreement and all dues are discharged completely to the satisfaction of SEIL.
9. A statement of account duly certified by the Authorised Officer of SEIL shall be conclusive proof with
respect to dues payable and outstanding against the Borrower.
10. This guarantee is unconditional and irrevocable and shall remain so till such time SEIL discharge this
guarantee by issuing a letter in this behalf.
In witness where of the parties hereto have executed this agreement on the day, month and year first above
written.
 HYPOTHECATION / LOAN AGREEMENT:-
As the name covers the meaning, i.e. it will consider all the agreement made by the borrower with
S.E. Investment, at the time of making the loan. Both the parties should agree to it, otherwise it will
create a legal obligation to the loan file for both the parties. The loan agreement consists of the
following:-
 Case number: - It is as provided when the loan file is received in the company. It is different for all
the borrowers, and it is distributed area wise.
 Amount financed: - Amount sanctioned as loan is called amount financed.
 Finance Charges: - The finance charges will include the rate of interest
 Installments: - the amount of each installment will be written and agreed by both the parties.
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 Duration of loan
 Borrower’s name & address
 First guarantor’s name & address
 Second guarantor’s name & address
 The borrower will enclose herewith loan documents duly completed the relevant details
HYPOTHECATION OF GOODS:-
The borrower confirms his Hypothecation of Goods as per loan agreement and other terms &
conditions, by the application and he accepts each and every Terms & Conditions of the Agreements.
He also confirms that the information given by borrower in loan application form are absolutely true
to the best of his knowledge.
He also assure you that he shall pay all due installments on or before the due date itself & ensure that
no inconvenience is caused to you.
All the loan papers which are being signed by him and by his guarantors have been duly filled in his
presence. He should be thankful for the confidence shown by S.E. Investment with the borrower by
sanctioning credit facilities.
The security of Hypothecation of terms & conditions, the guarantor should have thoroughly read the
documents and signed them after understanding the implications of each and every terms
&Conditions of the Agreements.
If the Borrower fails to pay the Installments, the guarantor shall pay on his/her behalf. The
information given by guarantor under proposal form should be absolutely true to the best of
guarantor knowledge.
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ENCLOSURE OF CHEQUES: -
The borrower should enclose cheque towards repayment of his dues. Along with undertaking that
this account will not be closed unless or until this cheque is honored or the dues are paid back. In
case the borrower do any such act, he shall be responsible for criminal action for breach of trust etc.
TAKE DELIVERY LETTER TO DPN
Take delivery letter to DPN (Demand Promising Note) means to receive the underlying asset
from a derivative, especially for a future contract. Take delivery letter is received by the
financing company by the borrowers and his guarantors.
Take delivery letter to DPN by Borrower:-
He will request you to take delivery of On Demand Promissory Note for a particular sum of money
duly executed by him in your favor for which consideration has been received by him.
He will undertake that the amount shall be used only for the purpose for which it is sanctioned and
shall not use the amount or any part thereof for any purpose other than for which it is sanctioned.
Further he will agree that if the company suspects or has reason to believe that he have violated or
violating this undertaking, the company may recall the loan amount or any part thereof at once not
withstanding anything to the contrary contained herein or in any other agreement.
For repayment of the loan, the borrower is liable to give post dated cheques to the company by
undertaking to ensure that the cheque is honored when presented for payment in the bank. He will
also undertake that during the tenure of the loan he shall not close such account and any violation of
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this undertaking shall render him for breach of trust and he shall be liable for criminal proceedings
against as provided in the law.
TAKE DELIVERY LETTER TO DPN by guarantors:-
He will request you to take delivery of On Demand Promissory Note on behalf of the borrower for a
particular sum of money, consideration for which has been received by guarantors.
99
They will authorize the company to disburse the amount to any of us and the payment so made shall
be binding on all without prejudice to the right to demand repayment of the entire loan at any time
the company may deem fit.
LETTER FOR CHEQUE STOP PAYMENT:
The borrower has the right to inform the company about the stop payment of issued cheques, if
any such case occurs. He should instruct the financial company about any such mis-happening and
should hereby ensure that these cheques have to be cancelled and withdrawn.
LETTER FOR DISHONOUR OF CHEQUES:
The borrower should inform via letter regarding dishonour of his cheque. He should mention that the
procedure of arranging of funds in continuing and they shall clear the amount within fifteen days
positively.
(G) LEGAL REQUIREMENT OF S.E. INVESTMENT:
 No loan will be granted to a person or spouse exceeding 55 yrs. of age.
 Maximum outstanding should not be more than Rs. 1,00,000 otherwise loans will not be granted.
 If husband is died, then Death Certificate is must.
 Family income is assumed to be of Rs. 12,500 maximum.
 Remaining income after paying the entire loan amount should not be less than Rs. 1,000.
 All loan cards should be enclosed with the loan application file.
 Loan History of the borrower should be:-
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o If 60% amount of previous running loan is paid then the loan amount granted to the borrower may be
increased by Rs. 5,000.
o If 30% amount of previous running loan is paid then the loan amount granted to the borrower shall
remain same.
o If less than 30% amount of previous running loan is paid then the loan amount granted to the
borrower will be Rs. 15,000.
 If previous loan is from HDFC Bank or YES Bank, then it will be ignored.
 If DPD is 60 days or less than 60 days during November2016 to February 2017 then it will not be
taken into consideration. After February 2017 no DPD will be accepted for giving loan.
(H) ADDITIONAL TERMS:-
 The Borrower acknowledges and undertakes that upon the sale, transfer, assignment or in the event
of default in the payment of dues of SIDBI by S.E. Investments Ltd., SIDBI shall have the right to
collect rentals / installments directly from the end beneficiaries.
 The aforesaid additional terms shall form the integral part of the Loan Agreement from the
sanctioning date and shall be enforceable in the same manner as the other terms are enforceable.
(I) LOAN SCHEME:-
It will consider the following-
 Interest Rate as per rate prescribed by S.E.Investments mostly 18% (flat)
 Loan A/c No. of the borrower
 Name & Phone No. of the borrower
 Regd. Office of the borrower
 Cheque (PDC & SPDC)
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 Installments Details (No. of installments=24)
 Deductions if any
NOTES:-
 Deposits if any, will not be adjusted against payment of installments. It will be refundable along with
interest on completion of stipulated period. In case of premature encashment of security deposit no
interest will be paid on the security deposit.
 Late Fee is 3% per month compounded monthly for delayed payment of installments; loan is to be
paid by borrower which is accepted.
 All taxes / charges, present or future payable by borrower only.
(J) MATERIAL DETAILS:-
1 Place & Date of Agreement
2 Name of the Borrower
3 Address of the Borrower (Permanent / Registered Office / Principle of Business)
4 Status of the Borrower
5 Loan Amount
6 Purpose of the Loan
7 Non refundable up front charges
a. 1% of sanctioned amount
b. Applicable Service Tax
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8 Repayment schedule of monthly installments (As Per Schedule- B of loan Agreement)
9 23 Post Dated Cheque (PDC)
10 Installment is taken in advance & its amount
11 Commencing Date
12 Cheque Dishonoring Charges
(a) First Presentation- Rs.1,000/-(Rupees One Thousand only)
(b) Subsequent Presentation- Rs. ................ per cheque per presentation
(c) Any other
13 Legal, Collection & other charges
14 Security (Collateral Money)
a. 20% of total sanctioned amount
b. Rate of interest payable on collateral money is 9% p.a.
15 Security / Accounts Verification- Will be done by an officer/representative /agency
appointed by S.E. Investments Ltd. at intervals to be decided by S.E. Investments Ltd.
Expenses incurred on actual will be borne by the Borrower.
NOTES:-
 The Borrower declares that the Agreement was duly read and understood by him/it prior to affixing
his signatures.
 The parties hereto have signed this Loan Agreement in acceptance of all the terms & conditions
stated herein above on the day & place aforementioned.
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(K) BOARD’S RESOLUTION:-
At the time of Annual General meeting the board of directors, decides about the Loan Against
Property. They also decide about the amount of loan, from where to raise the loan and who will be
co-applicant / guarantor of the same.
There are some of the similar extracts of the Board Meeting relating to the matter of availing loan
facility for a specific amount from a financial institution (Banking / Non-Banking). The Board passes
the following resolution:
 RESOLVED THAT a loan for a particular sum will be availed by the company from a financial
institution on such terms and conditions of sanction of loan facility as may be prescribed by M/s. S.
E. Investments Limited from time to time.
 RESOLVED FURTHER THAT the Board of Directors of the Company accorded their consent for
the above mentioned loan facility at the flat rate of 10.75%, fully understanding the viability of
application of flat rate of interest.
 RESOLVED FURTHER THAT the borrower, mainly Director of the Company, be and is hereby
authorized to sign, execute and deliver all the documents and deliver such indemnities and affidavits
on behalf of the company in favor of M/s. S. E. Investments Limited and to do all such acts, deeds,
matters and things considered necessary in this regard.
 RESOLVED FURTHER THAT the personal guarantees should be arranged in favor of M/s. S. E.
Investments Limited to secure the aforesaid credit facilities sanctioned by M/s. S. E. Investments
Limited to the Company.
 RESOLVED FURTHER THAT certified true copy of the aforesaid resolutions be provided to S.
E. Investments Limited for their records and doing the needful.
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(L) DISBURSEMENT:
Disbursements are always made at the field manager’s place in his presence with the details of
repayment schedule. At the time of disbursement, borrower has to sign the disbursement sheet. The
executive has the right to cancel loan file on the spot in case of unmatched physical verification.
Since the loan amount is to transfer through NEFT, photo is not required. But the disbursement sheet
should contain borrower signature.
At the time of NEFT some information of borrower is matched and checked once again. It includes
the following:-
 Bank A/c Number of the borrower
 IFSC code as written on the cheque
 FI Number of the borrower
In some of the cases the Bank A/c Number is not similar, than the NEFT will be done after manually
checking the file. If it is not matched then loan will not be granted to him.
If the IFSC code of the concerned bank is not mentioned in the previous records of the company,
then it will be taken from Google itself.
Before doing the process of disbursement, all the files whose NEFT is to be done will be audited and
they will put an eye on the following:-
 ECS form attached in the loan file
 Pre FI of borrower and guarantor
 Bank A/C Number
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 FI and Signature of both the parties
If any file is found in which the above mentioned forms and information is missing that files are kept
on hold and it will be re-checked with the help of manual files and they will be granted loan
afterwards.
At the end of all the disbursement of the concerned FM, the signature of FM should be taken on the
disbursement sheet.
(M) CALCULATION OF LOAN UNDER LAP:
Amount of loan 2,00,000
Rate of interest 18%
Tenure of Loan 18 months
Total amount to be paid by borrower in 24 2,36,000 (2,00,000+2,00,000*18/100)
months
EMI 2,36,000/18=13,110
Within first 9 months 13,110*9=1,17,990
9 months afterwards 2,00,000-1,17,990=82,010
Total amount disbursed by the company 2,00,000
(N) ACCOUNTING OF LOANS:
It is one of the most important procedures being conducted at the time of disbursement of loan. The
sheet being prepared for NEFT and the bank statement are re-checked by the accounts department.
For granting the loan to the borrowers a NEFT sheet is been prepared which is sent to CBI (Central
Bank of India) / IDBI Bank / Andhra Bank. The banks grant loan to the parties within 1 day and sent
106
the statement to the company on the same day, known as bank statement. The statement they provide
includes Name, amount of loan being disbursed, disbursement date and IFSC Code as mentioned in
the passbook, in an unorganized manner which is firstly bifurcated as per the need and requirement
of the company.
The NEFT sheet provided by the company includes, party name, disbursement date, NEFT date, FM
name and code, Reference No. (The number allotted to each case while applying for loan), amount
of disbursement and IFSC Code.
Both the statements are matched together, with the help of party name, amount of loan and IFSC
code (optional). The whole procedure of accounting include reconciliation of account with reference
to change in the amount (increase/decrease) if any, or Wrong NEFT is been checked. As the rule of
accounting says that “Debit should be equal to Credit” in the same way, the bank statement provided
should match with the NEFT sheet with respect to each and every date and amount including no. of
cases in each day of the particular bank.
(O) POST DISBURSEMENT VISIT (PDV):
 BY OPEARTIONS TEAM:
After 7-10 days of the disbursement, of all the disbursed cases 100% PDV should be conducted by
AM to access the utilization of the loan amount and cross check whether the purpose mentioned is
fulfilled or not. If not then AM should warned and instruct the borrower to utilize the loan amount
for said purpose.
 BY INTERNAL AUDITOR TEAM:
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At least after 15 days of the disbursement, PDV should be conducted by internal auditor to access
the utilization of the loan amount and cross check whether the purpose mentioned is fulfilled or not.
It will be conducted independently without the interference & disbursement of FM/AM/RM, so to
access the real information from the borrowers.
There should be at least 20 days time between AM PDV and Internal Auditor PDV.
(P) INSTALLMENT SHEET PRINTING/ DISTRIBUTING/ ACCOUNTING:
 On each due date, the accounts department shall print installment due sheet and hand over to
respective Regional Manager.
 The respective area manager shall collect installments due sheet from regional managers and field
manager shall collect installment due sheet from respective area manager.
 The accounting for disbursement shall be done in accounts department.
(Q) COLLECTION OF DUES/EMI:
The Field Managers shall be primarily responsible for collection of dues under close supervision of
Area Manager/ Regional Manager. On the aforesaid day of collection AM should ensure that FM
must be at his place of operations only. On the scheduled day of collection, the FM must collect the
installment amount from the borrower and same should be updated in the collection cards. The
amount can be received in cash or it can be automatically transferred to the Bank A/c of the
company itself. But FM should inform the company about the payment received from the borrower
on the same day, and it will be put as a record.
108
Collection of due installments of borrowers shall be done preferably by ECS system. And if ECS
system is not available then second preferred system is lodging of EMI, PDC cheques for collection.
For operational convenience same shall be presented for payment by HO and all cheques presented
for payment shall be marked in system. Daily lodgment report of cheques can be accessed by PDC
monitoring hub at HO for any cheque for presentment and any discrepancy shall be notified
immediately.
The dates are assigned by the company to collect the EMI from the borrowers. It is as follows:-
 If the current date is between 01-07 then the start date will be 1st of the month.
 If the current date is between 07-14 then the start date will be 7th of the month.
 If the current date is between 14-21 then the start date will be 14th of the month.
 If the current date is between 21-31 then the start date will be 21st of the month.
People who are going to collect the amount from field must bring the following details:
(c) Time of receipt of amount
(d) Sign of the person depositing cash
The report should be analyzed on daily basis.
(R) COLLECTION DEPOSIT PROCESS:
 On the scheduled collection date when all the collection is being collected then immediately it
should be deposited into the company’s account by the FM. After depositing it into the account FM
should immediately inform his concerned AM about the collections deposited detail i.e., amount
deposited, date of deposition and bank name where deposited.
109
 After receiving the information about the deposited collection AM should ensure whether scheduled
collection is being deposited or not from accounts section.
 Once cheque/ECS gets bounced then it will not be re-presented again and list of all bounce cases
shall be feeded in system. CIT/CCT shall call all irregular customers to make payment of bounced
EMI immediately with in 24 hrs and record their feedback for future action. It is the primary
responsibility of the FO that he collect/recover the installments. Therefore he shall follow and be
present in the entire recovery process.
 For balance cases soft and hard recoveries can be initiated. Same shall be suggested by concerned
BM on the basis of his learning from concerned FO. Soft recoveries means where mere by calling
borrowers or visiting borrowers amount has been recovered from borrowers. Whereas on the other
hand hard recoveries will be required where borrower is trying to turning out to be intentional
defaulter.
Cheque/ECS bouncing rate and rate of hard/soft recovery may be one of the parameter for evaluating
performance of any branch.
 Upon receipt of any case or after expiry of 15 days HO get involved automatically and shall send
demand notice and demanding payment of amount immediately or within 7 days from date of service
of notice. It may be mentioned in notice that failing payment of amount may result into visit by
company officials at place of borrowers and guarantors and may result into embarrassment situation
for him.
 After expiry of above period for balance unpaid cases, recovery team along with one advocate shall
move from controlling office/HO for collection and shall visit borrower and guarantor if required act
and try to recover amount from customer with reference to demand notice. Maximum time allowed
110
for this activity is up to next 15 days. If recovery team learns in between 15 days that no payment
can be recovered without legal efforts then they must refer case to legal department immediately.
 If payment not received by all mean then case shall be handed over to legal department for recovery
by way of legal means i.e. action under 138, arbitration or as suggested and decided by management.
 If amount not recoverable finally then suitable settlement shall be done and account shall be closed
& write off.
(S) UPDATION OF COLLECTION IN THE SYSTEM:
Update it
AM receive to Updation of
information regional collection
from FM manager details
RM reports Upadte in
Record it the
the collection
on day accounting
details FM
to day system &
wise to the
basis software
back office
(T) AUTHORITIES:
 All staff relating to front office and Field Staff shall be under direct supervision of Sr. Zonal
Coordinator.
 It will be responsibility of Senior Zonal Coordinator to ensure that all records relation to front office
and field are properly maintained.
111
 All staff relating of back office and accounts departments shall be under direct supervision of
Finance controller.
 All the staff under back office and accounts department shall report to Finance Controller and all
queries relating to accounts and back office shall be sorted out through finance controller.
 It will be responsibility of Finance Controller to ensure that all records of accounts department and
back office are properly maintained.
(U) ALLOWANCES TO DISBURSEMENT EXECUTIVES:
Monthly meeting with internal auditors should be arranged on every 5th day of the month for sharing
outcome in details with VP & FC.
112
113
CONCLUSION
The S.E Investments has good system of Income generation loan scheme and loans against property
which helps to approval the loan as soon as possible. The company which starts as a Microfinance
firm has now as its wings in loan against property and personal loans. S.E Investments ltd. is a front
runner company which offers IGL scheme, loan against property, Mobile financing etc. The loans are
sometime rejected also, it is been taken into consideration, the employees had to maintain the record
of the rejected applications. The S.E Investments is very good at providing the services and gives
high amount of loan as per the need of the customer.
It was a great knowledge acquired and an insight in various functional aspects from the customer
prospective. The study was a unique learning experience to link theory with the reality of the life.
114
BIBLIOGRAPHY
REFRENCES:
 Data as provided by the company during Summer Training
 Annual Report of the company is thoroughly studied
WEBSITE:
 www.seil.in
 www.moneycontrol.com
 www.thehindubusinessline.com
 http://shodhganga.inflibnet.ac.in/bitstream/10603/8650/10/10_chapter%202.pdf
 http://www.crifhighmark.com/Products-and-Solutions/Products/Pages/CIR.aspx
 www.investopedia.com
 https://www.indiamart.com/se-investments-limited/
 http://www.financialexpress.com/industry/banking-finance/banks-switching-from-ecs-to-
nach-here-is-what-you-need-to-know/300649/
 www.businessdictionary.com
 http://www.arthapedia.in/index.php?title=Chit_Funds_/_Chitty_/_Kuri/_Miscellaneous_Non-
banking_Company
 http://www.bankersadda.com/2015/08/all-about-nbfcs.html
 https://commercial.cibil.com/
 http://www.fsstech.com/nach/
 www.wikipedia.com
115

Non-Banking Financial Company

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NBFC’s: A study of small finance division with reference to S.E. Investments Ltd.

It gives me great ecstasy of pleasure to convey my deep and sincere thanks to

Name of Student : Akanksha Jain

Roll NO. 1606770005

S.NO. TITLE PAGE NO.

provide better services to their customers and satisfy them.

undertaken by me in S.E. Investment Ltd.

NON-BANKING FINANCIAL COMPANIES (NBFC)

1956 or 2013 engaged in the business of loans and advances, acquisition of

shares/stocks/bonds/debentures/securities issued by Government or local authority or other

activity, purchase or sale of any goods

(other than securities) or providing any

services and sale/purchase/construction of

Non-banking financial companies are

financial institutions that provide banking

resilient and have withstood the global downturn well.

restructuring of the domestic banking industry.

and making Aadhaar-based payments more widespread.

Indian banking sector.

set for foreign investment in corporate bonds.

promote and ensure cashless transfer of wages to workers.

million farmers across India, to enable farmers to undertake cashless transactions.

Amitabh Kant, Chief Executive Officer, NITI Aayog.

goal of complete digitisation of government payments.

DIFFERENCE BETWEEN BANKS & NBFCS ?

are a few differences as given below:

i. NBFC cannot accept demand deposits;

to depositors of NBFCs, unlike in case of banks.

(1) REGISTERED WITH AND REGULATED BY THE RBI:-

per the RBI Act, a ‘non-banking financial company is defined as:-

1. A financial institution which is a company.

deposits, under any scheme of arrangement or in any other manner.

acceptance of deposits by the NBFCs are:-

 They cannot accept deposit repayable on demand.

 The repayment of deposits by NBFCs is not guaranteed by RBI.

TYPES OF NBFCs REGISTERED WITH THE RBI

leasing equipment’s or financing of such an activity.

purchase transactions or financing of such transactions.

and selling of securities.

maintain investments as per directions of RBI, in addition to liquid assets.

(2) Not REGISTERED WITH THE RBI, but receive directions

under the RBI.

low interest rate at the time the funds are required.

(3) EXEMPTED FROM THE RBI REGULATIONS including

A. Insurance Company:- A company, which may be for-profit, non-profit or government-

called a bourse or simply an exchange.

D. Micro Finance Company:- Micro finance is defined as

providing micro loan to poorest of the poor (basically those

are neglected by banks, microfinance provides them loan

facility), and a source of financial services for entrepreneurs

and small businesses lacking access to banking and related

 S.E. INVESTMENTS LTD. PROFILE

 VISION & MISSION

 FORMATION OF THE COMPANY

 STRUCTURE OF THE COMPANY

 EMPLOYEES OF THE COMPANY

 SWOT ANALYSIS OF THE COMPANY

1956. Incorporated in March, 1992.

On 01.03.1995, fresh certificate of incorporation, consequent upon conversion to Public Limited

Wealth - Wordly things

2.1 VISSION & MISSION OF THE COMPANY:-

 The main objective of the Company is creation of Wealth for Society.

governance, ethical practices and social values.