Vous êtes sur la page 1sur 27

Credit Process

Process Flow (1/2)


1. Initial customer interaction 2. Understand customer profile and requirements 3. Run RSPM & collect documents Discuss indicative quote for customer 4. Log in the based on the norms he is likely to fit File with CPA into DSA/ BDM/ BDE 7b. 7a. Communicate Decision 7c. Resolve Queries 7b.Communicate Queries / Clarifications

Credit

CPA
Customer 5. Run De-due, Cibil,FI( if not fired by Sales Team) RCU

6a. RSPM

6b

6a. Check RSPM 6b. If RSPM has rejected the deal then send the same to Credit. 6c. If RSPM not applicable, then prepare CAM and send to Credit

FI agency

RCU

Process Flow (2/2)


8a. Communicate Final Approval, Rejection to Customer 8b. Collect Post Sanction Doc 8a 13. Collect Invoice & Insurance DSA/ BDM/ BDE 14. Submit Invoice & Insurance with Ops 12. Release RO & Communicate to Sales Team

8b

9a. Submit Post Sanction Doc with CPA 10. Prepare BP, Opportunity, Quote in SAP

9b. Raise & Resolve Queries 12

Ops 11. After checking, submit file to Ops for RO CPA 16. Resolve Queries if any

Customer

17. File Booked in System

CRU (Manu Bhai)

CPA MIS Monitoring

CPA MIS Monitoring.


Very effective in monitoring day to day file status and movements. File status in various stage helps in identifying the channels efficiency CPA MIS is also useful in retrieving the details for collections purpose. CPA MIS can be used for tracking stage wise TAT for all activities starting from login to booking. BM can track logins and plan and drive business accordingly. Can be used for various analyses on all activities.

Treat it as basic hygiene

Non Starters

Its the cover page of collection

F. A. Q. on NON STARTERS
Q 1. What is a Non Starter? A contract in which the customer does not pay three installments in first four months is termed as Non Starter. Advance EMI (if any) will not be taken into consideration for the aforesaid calculation

If the approval date is 1st Apr 2010, payment date is 1st May 2010, Invoice date is 1st Jun 2010 and Booking date 1st July 2010. Three EMIs to be collected from which date??

In the given example the contract start month will be May 2010 and three EMIs have to be collected on or before 30th Sept 2010. Else the contract will be tagged as a NON STARTER. Q 2. What is a Potential Non Starter? Potential Non Starter is contract which is on the verge of becoming a Non Starter if not resolved timely.

How do we monitor Non Starters


Credit ACM / BM Device Strategy 2a. List is circulated to AM, BM, DDSA, DSA, BDM & BDM 2b. Regular follow up is done & feed back is taken

1. List of Potential Non Starters is send on weekly basis from HO to all Credit Managers

HO Credit
4. Follow up with customer is also done by ACM/SCH. If required Credit /sales managers to visit the customer and analyse the reason of delay
3. Follow up with customer is made on regular basis

Sourcing Team

(AM, BM, SH, DDSA, DSA, BDM, BDE)

5b. Customer pays the amount to collection team

5a. Informs collection team about PTP

Customer

6. Amt is punched in System

Br / Collections

Non Starter Reason wise analysis


60 57 Customer does not have money Customer not contactable Vehicle used by third party vehicle not delivered Vehicle met with Accident 30 Lying in suspense A/c HNT/VNT 13 10 9 8 6 3 0 Grand Total
Customer Customer Vehicle does not not used by have contactab third money le party 13 9 8

50

40

20 11

Viability Issue Wrong commitment on scheme

1 Other not specified by the customer Grand Total


Wrong Other not commitm specified Viability ent on by the Issue scheme customer 2 1 11

Region Grand Total

vehicle Vehicle Lying in not met with suspense delivered Accident A/c HNT/VNT 6 3 2 2

Grand Total 57

Impact of NS on Branch Portfolio


High flow of Non Starters effect branch rating and higher bucket delinquency.(30% of the NS flow as NPA) Conscious underwriting approach for every proposal of the branch. Considering the high risk factor and strict credit underwriting diversion of good cases to the competition will be high side. Low business will impact branch income & profitability in longer run.

How to avoid NS funding


Factors for NS: A) Sourcing profile, B) Channel, C) FI, D) Stability, E) vehicle-profile mismatch, F) Viability, G) Immediate change of hand, H) Intention I) Due date and EMI amount awareness etc.

CASE STUDY

CASE STUDY - 01
Asset Required No of Units LTV Tenure Repayment : Tata LPT 2518 : Two : 100% : 4 Years : Full PDC / ECS Background Exp of > 7 years Fleet of 9 vehicles out of which 3 are free ETR & PTR Track with seasoning of 9 mths only

No Guarantor but strong positive reference

Questions to be asked?
Any past Track record available? Applicant has given track of only 9 months. He has a decent fleet of 9 vehicles we should insist for track of a longer period. If aforesaid track is not available then we must check ageing of fleet. Lets assume ageing of fleet is

2010
4

2009
1

2008
1

2007
1

2006
2 Fast Expansion No Confirmed tracks Poor Track record Low seasoning of repayment track No Guarantor This could be a risky call, decision has to be taken judiciously after looking into the Questions mentioned

Where will the vehicles be deployed?

Why is the applicant expanding so fast?


Does the applicant have confirmed contracts? What is the reason for Poor Track record? Get a reference check done from competitors / existing customers.

Is he ready to give any cross collateral or collateral of a free vehicle?


Can we rope in guarantor with ETR track?

CASE STUDY - 02
Asset Required No of Units LTV Tenure Repayment : Tata Ace : One : 90% : 4 Years : Part PDC Background Exp of > 4 years Fleet of 2 vehicles both are financed by other financiers GTR and ATR track in both with seasoning of 19 moths and 7 months 12 and 5 cheque bounces in two contracts but all cleared in same month Negative Area, Political Connections No Guarantor, No Reference taken
Lets go ahead!

Has good exp, Owns vehicles, GTR / ATR Track

Poor Banking
Regular Cheque bouncing, NIL FFR, No fixed contracts, negative area, Political Connections Better avoid / Lets ask for more information

Suggestions:- before pitching the deal please check the following: Where will the vehicle be deployed? Is there sufficient Market load available? Get some reference check done in that area. Confirm the reason of cheque bounce? (it may be due to lack of banking habit) Enquire about level of involvement in politics Can we rope in a guarantor with ETR Track?

This will reduce TAT and exchange of mails b/w Credit and Sales Team

CASE STUDY - 03
Applicant Location / Branch Assets Funded Total exposure : Nimesh V : Cochin : Tata Indica DLS : Rs.2.9 lacs

Profile of the Customer : Customer was working with METLIFE Insurance as sales manager. Worked only for three months. But in F.I. it was mentioned he is working with METLIFE since last one year. FTU Customer. Salary slip validated; Total Net Salary 30521/ Banking validated; ACB > 9 times. SBI RTR orally validated by BDM. Customers residence in Trissur Dist. But case booked at Cochin. Approved Terms & Conditions: RSPM Approved 80%. Additional LTV of 5% Approved. Collections comfort taken for funding from Cochin to Thrissur.

Reason for Default : Fraud customer. F.I. Agency based @ Cochin entrusted to do Field verification @ Thrissur. F.I. didnt visit the residence/ Office of the Customer. Only did TVR. The route map was found incorrect. No one from company met with the customer. As per F.I. Customers residence was his fathers flat but the same was a Rented House. Submitted Mobile Bills was Post Paid but the no. captured in SAP/ Cardex doesnt belong to the customer. Trichur Collection team is following up the case but deal booked in Cochin branch. Bank statement was reflecting PL loan but it was ignored. PL amount was parked in the same bank A/C hence ABB was high & offered additional LTV with low IRR. Bank Statement from Axis Bank & HDFC collected. When cross-checked it was identified that the customer was drawing salary both from METLIFE as well as Religare Life insurance simultaneously for three months. During availing the loan the customer has submitted a Land tax Receipt which was forged. Credit Approval taken for Personal registration but when checked with RTO website, the vehicle is registered as Taxi. Learning: Branches should maintain Geo Limit. Always the customer should be residing in the area of branch where the case is booked. FI cross check & Neighborhood/reference check should be done mandatory. Form 20 must be issued from Branch only with authorized signatory seal & Sign.

CASE STUDY - 04
Applicant Location / Branch Assets Funded Total exposure : Mr.V.Srinivasa Rao : Guntur : Tata 3118 Chassis & Body ( 4 Nos) : Tata 2515 Chassis & Body (2 Nos) : Rs.104.84 lacs

Profile of the Customer : Mr.V.Srinivasa rao is a STR client, in the line of Market Load operations & into Cement transport operations under Sub contract. Transport Business experience of 10 yrs Sub Contract from Anjani & My Home cements Fleet Strength of 11 vehicles with 4 deemed free , at the time of Funding ETR /GTR track record with us & Competition ; ICICI,Koatk,CITI Approved Terms & Conditions: Last approval is for Rs.69.08 lacs on 4 No Tata LPT 3118 Chassis & Body (100 % on chassis & 58 % on body ), taking Post funding exposure to Rs.104.84 lacs Cap on further exposure for 12 months

Reason for Default : Aggressive expansion in a Short Span Vehicles run under Sub contract / transport operator ; delay in bills realization Funds diversion into Real estate No Free fleet Dependent on sub contracts Learning : Immediate exposure at a Go with higher LTVs to be backed up decent cross collateral Aggressive exposure to be backed up by Fixed / written viable contract from good principal; else restrict exposure Contingency plan to be analyzed

CASE STUDY - 05
Applicant Location / Branch Assets Funded Total exposure Current OD Amount : Mr.M.Ramesh : Kurnool : Ace : Rs.2.55 lacs : Rs. 42,500.00

Profile of the Customer: Mr. M.Ramesh is a First time user. No experience in the Transport Business Residing in Rented house Having own agri land of Rs.8 lakhs value Roped guarantor with property of Rs.16 lacs
Approved Terms & Conditions: Deal Approved through RSPM under the Magic scheme Roped guarantor with property Property valuation of applicant and Guarantor

Reason for Default : Applicant is not having any business experience No other source of income He is unable to run the vehicle

Learning: High funding to FTU customer Deal based on Guarantor Property , where as we given a property valuation waiver FI confirmed that he is having low income source and low profile, we have to restrict the ltv for this profiles Due to low margin applicant is ready to surrender the vehicle

CASE STUDY - 06
Jaswinder Kaur/ Indigo XL / Contract No. 5000075946
Profile: SENP, Running Boutique. Deal approved by : RAAC deal signed off by : SH PC Sales Deal Inputs at the time of decision: Self employed non professional profile FI positive confirming: - Applicant running boutique in name of M/s Patiala Boutique Collection for last 8 yrs Self owned house for last 4 yrs Banking : Average monthly credit:5 & Average monthly balance: 10 times of EMI ITR 2.49 lacs Current De-dup & CIBIL : De-dup is showing default with TMF in one contract CIBIL is showing multiple defaults Findings : FI has mentioned to check running tracks of applicant but the same has not been checked. De-dup not attached in file: As confirmed by NAX Learning: Two market reference check to be made mandatory (not with references given by applicant in application form).

CASE STUDY - 07
Bhupender Kumar/ Safari LX/ Contract No. 5000282157/70%/60 months. Profile: Agriculturist. Deal : Property base RAAC, Case approved by ACM basis strong sales recommendations with condition of Dealer Comfort Letter and Sales to monitor the repayments of this case. Concern raised by Credit: Initially declined by ACM twice even when it was a RAAC, deal re-pitched by account manager after lag of 45 days. Positive PFI by Sales (Scan copy attached) with positive reference checks done by Account Manager. Sales commitment to take Dealer Comfort Letter Agri land holding , valuation worth 68 lacs documented Strong banking with AMC 20 & AMB 17 times of EMI

Current Status: CIBIL is negative for same contract with TMF, no other entry
Findings: Case looks staged, failure in checking correct market reference in FI and sales PFI. We have already stopped doing property base deals under Normal channel (except for Lsure). Credit condition not met - No Dealer comfort letter present in file. Details with whom Account Manager did positive reference checks not disclosed. Learning: Two market reference check to be made mandatory (not with references given by applicant in application form) for cases of MUV and Special profile not backed by repayment.

CASE STUDY - 08
Arvind Singh/ Indigo LX/ Contract No. 5000192931
Profile: Cable Business & Property Dealer Deviations / Concerns Low stability- Negative FI: Stay less than 4 yr at current rental resi Profile - Property dealer & Cable connection business Case approved by ACM basis following recommended mitigates Positive PFI by Sales- Confirming well maintained office, Good market reputation, business stability of > 3 yrs ( 2.5 yrs old cable rent receipt documented) Local own property base (Parental resi confirmed by FI) - Additional rental income as same property given on rent. over all stability of 15 yrs Banking: Regular credits & balances Avg Monthly Credits 6.26 times & Avg Monthly Balances 17.13 times of EMI Regular ITRs: 1.03 lacs AY 07-08 & 0.99 lacs AY 06-07 Repayments: PL / 50 K / ICICI / EMI 2644/- / seasoning 17 of 36 months/ Nil bounce / ETR : PL / 2.00 lacs/ ICICI / EMI 5980/- / seasoning 6 of 48 months / Nil bounce / regular RCU head approval for re-verification of rental agreement - status positive on re-verification of docs

Current Status Customer is contacted over phone (same no. as captured in cardex) As per customer he had dispute with Dealer ( Joshi Auto Zone) as vehicle papers were not released to him Dealer was asking some late payment penal amount from customer on a/c of (Vehicle delivered in Oct ' 07 while case processed & approved in Nov '07) As per app, he initiated legal recourse against Dealer and got the papers through courts order only and the same aggravated to such situation and mentioned that he is having good repayments with other Financer ( Latest CIBIL generated is also positive showing regular repayments of above mentioned PL till date) Findings: This was a case of dealer customer dispute, should have been taken up by sales manager with dealer principal, customer and TML. Learning: Online escalation matrix should be made available to credit and collection for entering dealer/manufacturer dispute cases. Resolution of the same should be responsibility of Branch Manger.

Sales and Credit Conflict


More Numbers, Increased Disbursement, Higher IRR!!

Quality Business, Less Delinquency, Minimum Non Starters!!

Reason for Conflict

How to manage Sales and Credit Conflict


Share portfolio behavior and cube cuts which will help team for increase good sourcing. Provide minimum TAT in all service area i.e FI, CIBIL,De-dupe, approvals and file processing.

Weekly meeting / con-call of sales and credit


Managing Inter personnel relationship

Recap..
Non starter is the cover page of collection CPA MIS monitoring helps in increasing efficiency Conflict management Adhere to process

Thank You

Vous aimerez peut-être aussi