2016

Survey of e-DFS in
Sambalpur Region for
IOCL Dealers

SUBMITTED BY-
BOLLA MONIKA RAO

IIM Sambalpur
 TABLE OF CONTENTS

1 Introduction .................................................................................................. 2
2 Objective ...................................................................................................... 3
3 Methodology ................................................................................................ 3
4 Collection of Data ......................................................................................... 4
4.1 Primary data .......................................................................................... 4
4.2 Secondary Data ...................................................................................... 4
5 Time Span for the study ................................................................................ 4
6 e-DFS ............................................................................................................ 4
6.1 Advantages of this scheme over normal cc.............................................. 4
7 Analysis ........................................................................................................ 5
8 Conclusion .................................................................................................... 7
9 Recommendation ......................................................................................... 8
10 References ................................................................................................. 8
Electronic Dealer Financing Scheme (e-
DFS) in Sambalpur for IOCL Dealers
1 INTRODUCTION

IndianOil pioneered differentiated offerings to meet the diverse needs of its customers, be it
through large format Swagat outlets for the highway traffic, Kisan Seva Kendras for the rural
consumer, or even the XTRAcare outlets for the discerning urban customer. Following are the two
types of outlets focused in this report:
1) XtraCare Outlets - IndianOil's XtraCare branded full-service petrol stations are a
result of a series of processes in retail design, product and service upgradation,
capability training, automation, loyalty programs, retail site management techniques –
all benchmarked to global standards. Complete vehicle care begins at an IndianOil
XtraCare petrol pump. IndianOil's XtraCare pump is a revolutionary initiative in
petroleum retailing that combines the best bouquet of quality, quantity and warm
service, with a guarantee to make your every visit a truly rejuvenating experience. It is
benchmarked to international standards of quality & quantity, housekeeping,
maintenance and customer service certified by the globally renowned agency - M/s
Bureau Veritas (BV), amongst others.

2) Kisan Seva Kendra (KSK) - Kisan Seva Kendra is an award-winning retail outlet
model pioneered by IndianOil to cater to the needs of customers in the rural segment.
Today, KSK outlets have emerged as dominant players in the rural markets, riding on
the rapid growth of upcoming second and third tier roads in the rural areas. The KSK
come with a fresh perspective enabling dealers to tap the huge demand driven in by
consumers there. In addition, non-fuel retail facilities like convenience stores have been
added to the KSK to sell pesticides, vegetables, banking products and stationery items.
IndianOil has alliances with Nabard, Oriental Bank of Commerce and Bank of Baroda
for banking products.

3) Swagat Retail outlets: The Swagat retail network are large format sites designed
exclusively to cater to travelers on the highways. With spacious parking lots, dhabas,
eateries, retail stores and restroom, the Swagat outlets provide customized services to
owners of both light motor vehicles as well as heavy motor vehicles.
SBI has tie-up with IOCL at the corporate level mainly for the KSKs for e-DFS, hence we will

focus on KSKs.

2 OBJECTIVE
The major objectives of this survey are:
 To establish a comparison between the cash credit/ over draft facility availed by the
IOCL dealers with the Electronic Dealer Financing Scheme.
 To make them aware of the e-DFS and its benefits.
 To analyze the competitiveness of SBI’s EDFS in comparison to other banks services.

3 METHODOLOGY
The data for this research project is collected through questionnaire and personal interviews. A
structured questionnaire was developed to collect data and test hypothesis. Both type of questions
i.e. open ended and closed ended were used. Convenience sampling method was used and
questionnaires were got filled by email and personal interview methods. A target of 40 respondents
was set, but we I could connect to few respondents and many of the respondents provided half
completed questionnaires, therefore only 30 questionnaires were entertained for final analysis and
data interpretation.
The following table gives a depiction of demographic profile of the respondents.

Table 1. Demographic profile of respondents

Demographic Features Number of Respondents Percentage in Total Sample
Location
Rural 7 20%
Urban 28 80%

Type of Dealership
KSK 9 25.7%
RO 26 74.3%
4 COLLECTION OF DATA

4.1 PRIMARY DATA

The primary data for the study were collected from personal meetings with the dealers.

4.2 SECONDARY DATA

The secondary data for the study were collected from the internet.

5 TIME SPAN FOR THE STUDY

The time span for this survey was of 7 days.

6 E-DFS

It is a scheme for financing the purchases of Dealers from the companies/ Industry Majors backed
by a strong web based platform which ensures remittance of funds to the Industry Major
(Corporate) from the dealers e-DFS A/c as per the invoice amount.
In this scheme, a limit will be sanctioned to dealer exclusively for inventory funding for making
the payments to the Industry Major. The e-DFS A/c (Inventory Funding Account) will operate on
electronic platform with no manual intervention of branches. The limits will be sanctioned based
on the introduction letter/comfort letter/performance letter provided by the Industry Major for the
dealer.

6.1 ADVANTAGES OF THIS SCHEME OVER NORMAL CC

1) Lesser Interest Rates
2) Lesser percentage of collateral required
3) Paperless banking with all e-banking facilities
4) Generation of MIS reports
Interest Rates
Competitive interest rate is charged as per tie-up arrangement terms and conditions discussed
with the Industry Major.
Amount of Facility
100% Hypothecation of stocks and receivables
Security
To obtain the Financial Assistance the dealer has to show up minimum 25% Tangible Collateral
Security in the form of Land and Building/ Cash Collateral/ Bank approved Securities.
Reports provided by the bank
MIS Reports which help the dealers in managing their working capitals more efficiently.

7 ANALYSIS
Total number of IOCL Dealers surveyed in Sambalpur Region
 Number of Kisan Seva Kendra (KSK) – 7
 Number of Retail Outlets (ROs) – 28

On the basis of responses received:

 Number of IOCL dealers availing e-DFS service – 8
 Number of IOCL Dealers not availing e-DFS service- 21
 Number of IOCL Dealers which have e-DFS in process- 6
Out of the dealers availing e-DFS, following was the feedback received when asked about their
satisfaction level.

When the Dealers currently not using e-DFS were enquired about whether they will be interested
in knowing more details from SBI Officials, they came out with following result:
 Number of dealers interested in knowing more details about e-DFS- 3
 Number of dealers not interested in knowing more details about e-DFS- 18
  Following is the list of other banks with whom the dealers are maintaining their cash
credit accounts-

List of other Banks

ICICI
UCO
Canara
Oriental
HDFC
PNB
UBI
Bank of Baroda
Indian Oasis bank

8 CONCLUSION
The number of IOCL Dealers in Sambalpur Region availing the e-DFS account is very small.
However many of them are interested in knowing more details about it. Also few of them are
changing their minds after knowing about its benefits over maintaining cash credit accounts with
other banks.
e-DFS despite being a great product is not gaining momentum in this area because of the following
reasons:-
 Payment possible to one specific Industry Major only, so difficult for owners with side
businesses.
 Terms for diesel credit not suitable with e-DFS
 Dealers already have long term relationships maintained with other banks, don’t want to
switch.
 Less sales and hence not eligible for this service.
 Poor internet connectivity in remotely located KSKs.
 Dealers enjoy much higher credit limits in case of cash credit accounts as compared to e-
DFS.
 Poor customer service of SBI in few locations.
9 RECOMMENDATION
 Measures should be taken for dealers having side businesses other than IOCL Dealership
for proper utilization of their funds.
 Dealers from urban locations should be focused more upon as KSKs being located in
remote areas are not having proper internet connectivity issues due to which they are facing
problems with e-DFS A/c.
 Limits should be increased so as to make e-DFS comparative to cash credit accounts.

10 REFERENCES

1. https://www.iocl.com/aboutus/petroldieselstations.aspx

2. https://www.onlinesbi.com/scfu/scfu_home.html