You are on page 1of 73

DEPARTMENT OF MANAGEMENT

TECHNOLOGY & RESEARCH


(NAGPUR UNIVERSITY)
A

PROJECT REPORT
ON

STUDY OF TATA MOTOR FINANCING & RECOVERY


MANAGEMENT
IN TATA MOTOR FINANCE LTD

[AKOLA BRANCH]

SUBMITTED BY

SWAPNIL A.CHOPADE
GUIDED BY

Prof. S.R.BHOYAR

(2009-2010)

Page | 1

MASTERS OF BUSINESS ADMINISTRATION (M.B.A.)

ACKNOWLEDGEMENT
It gives me immense pleasure in completing this project and submitting
the final report. The last two months with TATA MOTOR FINANCE Ltd. had
been full of learning and sense of contribution toward the organization. I would
like to thank TMF Ltd. for giving me an opportunity for learning and
contributing through this project. I also take this opportunity to thank
everybody who made this experience a memorable one.
A successful project can never be done by an individual to whom the
project is assigned. It requires help and guardianship of some conversant
person who helped the undersigned actively or passively in the completion of
successful project.
In this context as a student of MBA, N.M.D.COLLEGE Institute of
Management, GONDIA. I am grateful to Prof.S.R.BHOYAR whose inspiration
& encouragement helped me to complete my project.
I would like to express my gratitude to Prof. Prof.S.R.BHOYAR valuable guidance
On Such worthwhile topic STUDY OF TATA MOTOR FINANCING AND
RECOVERY MANAGEMENT IN TATA MOTOR FINANCE LTD, AKOLA
BRANCH.
The project couldnt have been completed without timely and vital help
of Mr. KRISHANA DHOTE (Branch Manager) Sir for there invaluable
guidance, keen interest cooperation inspiration, and of course moral support
through my project session.

Page | 2

SWAPNIL A. CHOPADE
M.B.A. (Finance)

DEPARTMENT OF MANAGEMET
TECHNOLOGY AND RESEARCH N.M.D. COLLEGE
GONDIA

CERTIFICATE
This is to certify student of M.B.A.VI sem. in the Department of
Management Technology & Research, N.M.D. College, Gondia
for the session 2009-10 has completed his project report entitled
STUDY OF TATA MOTOR FINANCE LTD AND RECOVERY
MANAGEMENT IN TATA MOTOR FINANCE LTD, AKOLA
BRANCH. under the guidance of Prof.S.R.BHOYAR on the

subject approved by the department.


This project report is being submitted to
RASHTRASANT

TUKADOJI

MAHARAJ

NAGPUR

UNIVERSITY, NAGPUR. In the partial fulfillment of


requirement for the Degree of MASTER OF BUSINESS
ADMINISTRATION [M.B.A]

Prof. Vijay Bidwalikar

Y.M.Nasre
Page | 3

Co-ordinator
DMTR,N.M.D.College,Gondia

Principal/Director
DMTR,N.M.D.College,Gondia

CERTIFICATE OF THE GUIDE


This is to certify that Mr. Swapnil.A.Chopade is a bonafied student of
MBA, VI sem in the Department of Management Technology &
Research, N.M.D. College, Gondia of years 2009-2010. He has
completed his project report entitled STUDY OF TATA MOTOR
FINANCE LTD AND RECOVERY MANAGEMENT IN TATA MOTOR
FINANCE Ltd. under my guidance.
1. The candidate has satisfactorily conducted research for not less than
one session.
2. The project is the result of the candidates own work and is of
sufficiently high standard to warrant its presentation for examination to
the R.T.M. Nagpur University, Nagpur, in partial fulfillment of the
requirement

for

degree

of

MASTER

OF

BUSINESS

ADMINISTRATION [M.B.A].

Prof.S.R.BHOYAR

Page | 4

Project Guide
N.M.D.COLLEGE,
GONDIA

DECLARATION

I,do here by declare that the project report entitle STUDY OF TATA MOTOR
FINANCE LTD AND RECOVERY MANAGEMENT IN TATA MOTOR
FINANCE LTD, AKOLA BRANCH. Has been prepare and submitted as part of
curriculum for the degree of Master in Business Administration (MBA)
[D.M.T.R.N.M.D] DEPARMENT OF MANAGEMENT & TECHNOLOGY
RESEARCH, NATWARLAL MANIKLAL DALAL, GONDIA (MH)
I also declare that this project is result of my efforts and is not submitted to
other university or institution for any other purpose.

Swapnil Ambadas Chopade


M.B.A. (FINANCE)

Page | 5

INDEX
SR.
NO.

PARTICULAR

PAGE NO.

1.

TITLE OF PROJECT

2.

EXECUTIVE SUMMARY

3.

COMPANY PROFILE

4.

OBJECTIVES AND SCOPE OF THE


PROJECT

19

5.

RESEARCH METHODOLOGY

21

6.

THEREOTICAL BACKGROUND

22

7.

DATA ANALYSIS & INTERPRETATION

44

8.

FINDINGS

51

9.

LIMITATIONS

52

10.

CONCLUSION

53

11.

RECOMMENDATIONS

54

12.

BIBLIOGRAPHY

55

Page | 6

STUDY OF TATA MOTOR FINANCING


&
RECOVERY MANAGEMENT
IN
TATA MOTOR FINANCE LTD
[AKOLA BRANCH]

Page | 7

Page | 8

EXECUTIVE SUMMARY
The project titled Study of Tata Motor financing and recovery
management was carried out for Tata motor finance
ltd.
A major element of the financial sector in India has been the
introduction of prudential norms and regulations. These prudential norms and
regulation are aimed at ensuring safety and soundness of the financial
system; impart greater transference and accountability in operation and
restoring creditability, confidence in the Indian financial system.
Like banking, a non banking sector has provided finance to the
customer to purchase house, land, assets and vehicle. The Tata motor finance
ltd. Is also a non banking sector that has provided finance to the customer to
purchase a vehicle of Tata motors. The finance is to be provided by the
finance company to obtain an interest on that particular amount which the
customer has taken. Simply like banking the Tata motor has provided a loan
and taking interest on it. Tata motor finance ltd. has provided a loan only for
the Tata manufacturing vehicle. It did not provide a loan to the other
manufacturing vehicles.
After providing a particular finance there is necessary to get back the
finance amount with the specified interest. For this the company has taken
post dated cheques from the customer as a security and also takes a two
guarantor. Out of which one guarantor should be a relative.

Another

procedure is that the customer has to deposit the specific installment to the
counter of the Tata motor finance ltd. If the customer has not given installment

Page | 9

then the next procedure is to file a case into the court to recover the finance
amount. Title of project
With the help of this financing and recovery of financing they will get
exact turnover of the finance company and get exact amount of recovery. And
get perfect knowledge about the flow of finance and recovery of finance of the
company. It helps to the company to know the financial status of the company.
Going through various books, journals and other sources of secondary
data started the project. The project objectives were analyzed for future
courses of action. The finance and outstanding finance were analyzed to find
out the exact financial position of the company. Finally some suggestions are
given which would help the company to improve its position with regards to
get more benefits from issuing the finance and to get more profit with the help
of recovery of the finance.

Page | 10

Page | 11

INTRODUCTION OF COMPANY

Tata Motors Finance Ltd (TMFL) is a closely held public limited


company promoted by Tata Motors Ltd (TML). The merger is expected to
enable the vehicle financing business of Tata Finance to grow stronger by
leveraging its synergies of the direct business model with the dealer driven
business of the bureau of hire purchase and credit (BHPC) a division of Tata
motors.
The board of directors of Tata motors (the company) and Tata Finance
(TFL) today approved the merger of TFL with the company. The merger would
be under a scheme of Amalgamation under Section 391 and 394 of the
Companies Act 1956 and would be subject to the approval of the Honble High
Court of Judicature at Bombay and would be effective from April 1, 2005. in
terms of the Scheme of Amalgamation the would be submitted to the court, all
equity shareholders of TMF will be entitled to receive eight ordinary shares of
the company of Rs 10/- each for every 100 equity shares of Tata Finance of
Rs 10/- each.
The exchange ratio for the number of shares of the company to be
issued to the shareholders of TMF is based upon a valuation conducted by
M/s Bansi Mehta & Co. Chartered Accountants.
TMFL has received RBI license for carrying on NBFC activities and has
commenced operations from 1st September 2006. The merger is expected to
enable the vehicle financing business of Tata Finance to grow stronger by
Page | 12

leveraging its synergies of the direct business model with the dealer driven
business of the bureau of hire purchase and credit a division of the company.

This merger will also allow the TFL shareholders to participate in the
growth of the company, a leading automobile company in the country and
thereby significantly gain with an upside of dividend and shareholder value
creation.
The purpose merger will enable the company to grow its auto financing
business and offer complete solutions in line with the global best practices in
the auto industry. This will also enable the company to provide hedge against
the cyclicality of the automotive business and significant value creation for its
shareholders.
Currently Tata Finance and BHPC finance around 17-18 per cent of the
companys vehicle sales while the global benchmark for captive finance units
is to finance 35-40 per cent of the parent companys vehicle sales. This
merger is expected to create a platform that will enable the company to
accelerate its move Tata Finance, a non banking finance company, was
formed by its promoters. Tata Industries and the company in 1984 with the
primary objective of financing and promoting the companys channel partner
and retail finance business. Restructuring initiatives carried out by Tata
Finance over the past 36 months have seen the company divest all its noncore activities and focus only on auto financing business. TFL had revenues
of Rs 305 crores and posted a profit before tax of Rs 17.5 crore in FY 03-04.
In the first half of this fiscal, TFL had revenues of Rs 118 crore and
posted a profit before tax of Rs 15.6 crore. The auto financing division of TFL

Page | 13

is expected to disburse funds of approximately Rs 1500 crore during the


current year as compared to Rs 551 crore disbursed in FY 01-02.

TATA group has a 99 different business in all over the world. Out of which
Tata motors ltd manufacture the vehicles. And, for supporting the Tata Motors,
they merged another company Tata motor finance ltd. and for this company,
the Tata Group has provided fund for finance from there capital and market
shares.
Though, the Tata has a different business, but they control all the
business under the one roof. And Tata motor finance ltd. is one of the
companies they were provided financed. This is the biggest things that the
finance has provided by the same group.

Page | 14

INTRODUCTION

1)

Name

:-

Tata Motor Finance Ltd.

2)

Address

:-

Near Khemka Tawar,


Raut Wadi, Akola
Tq. & Dist. Akola -444001

3)

Phone No.

:-

0724 - 2491411

4)

Fax No.

:-

0724 - 2491714

5)

E-mail

:-

www.tatamotorfinance.com

6)

Contact Person

:-

Mr. Krishna Dhote


(Branch Manager)

7)

Starting Year

:-

15 05 2007

Page | 15

Staffing and Designation

Sr. No

Name

Designation

Working for

Krishna Dhote

BM

TMF

Deepali Pohare

Ops Executive

TMF

Abhishek Deshmukh

BDM PC

TMF

Prashant Dhandre

BDM CV

TMF

Anil Deshmukh

CRE

TMF

Dinesh Dahikar

BDE CEQ

TCL

Yogesh Agrawal

Sales Manager

TSL

BM

:-

Branch Manager

Ops

:-

Operations

BDM

:-

Business Development Manager

PC

:-

Passenger Car

CV

:-

Commercial Vehicle

CRE

:-

Customer Relationship Executive

BDE

:-

Business Development Executive

CEQ

:-

Construction Equipment

TCL

:-

Tata Capital ltd.

TSL

:-

Tata Security ltd.


Page | 16

Marketing

Credit

Operation

Remedial

Page | 17

Marketing has a very vital role to play for any selling activity like Vehicle,
finance, hospitality; consultancy etc. similarly for selling our product the
marketing team has a great responsibility because proper marketing can
minimize the load of Operation and Remedial up to a great extent by bagging
prudent business.
Functions of Marketing
1) CUSOMER ACQUISITION:-

CUSTOMER ACQUISITON

WALK IN

DSA

DEALER

REPEAT

2) FILE PROCESSING: First approval is taken from Branch Manager then Proposal form is
filled up with completely the file, power of attorney is signed by Borrower and
Guarantors and send is to Operation Department. File is remarked by
Operation incharge and release order is issued. If the case is from DSA then
such type of stamp to be affixed.

Page | 18

3) TO DEPUTE FI:FI agency should be will known in the area and has a good infra
structure and database. Approving authority for appointment is Regional
Credit Manager, on recommendation of Branch Credit Manager and Branch
Operation. The FI agency submits their report in format directly to Operations.
The Branch Manager and Regional Head have to monitor the performance of
the FI agency. Bills submitted by FI monthly to operations and are approved
by Branch Manager.
4) PDD COLLECTIONS: - (Post Disbursement Documents)
It is the responsibility of Marketing executive to collect all necessary
documents which includes RC, Insurance policy, Dealers invoice in original,
copy of Manufactures invoice.
5) CUSTOMER HANDLING:Marketing Executive should be in constant contact with his customer
and provide any information required and solve the customer complaints on
business related issues. To make customers query handling smoother and for
better customer service a branch will be facilitated by Customer care
executive who is supposed to carry out the following activity under the
guidance of operation department.
6) OVERDUE AND NPA:The marketing executives should take the assistance of collection
payment, collection agency and remedial team for ensuring that the overdue
and NPA of the branch is under control the target in remedial front.

Page | 19

Approval matrixes are been decided and circulated by risk & credit team in
consensus with business from time to time. The approval matrix is based on
reporting hierarchy and based on the concepts of Higher the risk, higher the
authority that approves it. All approval are provided and based on approval
structure.

HEAD CREDIT

National Manager-credit

Regional Manager Credit

Area Manager Credit

Branch Manager - Credit

Page | 20

Operation pays very vital role in the growth and health of the company.
The operation department has to perform the following roles and
responsibilities.
DISBURSAL:It is the process in which operation incharge check whether the
documents submitted by the hirer are according to its relevant norms.
COLLECTION:It is the process in which the operation incharge collect the repayment
from the various modes like PDC, E-cess, and Collection agency.
TERMINATION:Hirer has an opportunity to terminate his finance by giving a full
payment of remaining finance amount at a time. And for this the branch
applies the 4% interest on the remaining amount.
BRANCH EXPENSES:Expenses are incurred at branch for electricity, telephone, office
maintenance, pantry, courier, vehicle maintenance, stationary, photocopy,
traveling, conveyance and other administrative works.
STAMPING:Excel sheet is maintained for stamped agreements and power of
Attorney (POA) in hand, issued, received. It has valid for six month only. All
stamps are to be affixed on agreements and POA. Stamping date of POA and
agreement should be same and also the same should not be prior to contract
date.
Page | 21

REMEDIAL DEPARTMENT

Remedial word comes from remedy. Remedy needs to be done once


a thing goes wrong. The role of remedial department is like a doctor who has
to take care of health of patient when there is any type of disease and also to
keep healthy the doctor keeps advising.
Another function of Remedial Department to handling the call enter and
being in touch to ensure that maximum customer remain in regular category
and customer problems resulting in affecting collections are solved and they
remain in regular contact with the centre. Ensuring that the customer gets a
nearby place to deposit their payments by providing collection centers.
Parking of the vehicle safely in secured parking yards after
repossessions. Random checking of parking yards to ensure the safe parking
of vehicle and check the theft of parts, etc.
The duty of Customer Relation Executive is to regularly monitor the
current cheques bouncing cases, call the customer and make them pay the
due amount. Beside the same wherever there is some communication gap,
slight misunderstanding, like difference in installment amount, date, cheques
not presented by TMF, wrong communication given by marketing DSA etc.
then the duty of this CRE is to get the problem resolved taking help of branch
marketing executives, remedial and branch manager.
A good collecting agency is expected to collect at least 120% of the
monthly maturity amount of cases allocated to them. An agreement is signed
with the collection agency at the time of appointment and the receipt books
are also given to them for collecting of money.
Page | 22

The agency is responsible for collecting money and depositing the


same to the branch on next working day. The agency can collect cash, DD or
cheque from the customer.
The recovery agents are the people who are locally influential, experts
in their field having good relation with influential people and the police. They
are interviewed and appointment by the remedial dept. and an agreement is
signed with them. The repossession agents are expected to take possession
of the vehicles peacefully and legally without entering into any act which can
be called as crime. They need to follow the procedure laid down by the
company.
The vehicle which are repossessed and in stock for 30 days or more
and where there is no legally stay or case in court against the sale of the
vehicle, and the customer is not expected to try and release the vehicle we
will have to go for sale of vehicle.

Page | 23

FUNCTIONS OF BRANCH

Smooth functioning of branch.

Maintaining relationship with dealer.

Set target for Dealers/Direct Sales Associates (DSA) and minimization


of DSA dependence.

Continuous monitoring of the market and accordingly prepare action


plan.

Ensure market share.

Cost handling.

Controlling overdue.

Minimize pending PDD.

Maximization of business without compromise quality.

Minimize response time.

Control of field investigation cost through maximization of conversion.

Effective customer service.

Customers with overdue installments are not to be offered any fresh


functioning.

Page | 24

OBJECTIVES OF BRANCH

To attract the customer towards the branch.

To operate function smoothly.

To keep friendly relations with the Dealer and DSA.

To provide various schemes as per terms and conditions.

To increase market share.

1)

This is the main objectives of the branch to attract the customer

toward the branch. Because if the customer directly attract towards the
branch then the branch did not pay any commission to the dealer of DSA.
If the customer came from the dealer or the DSA then the branch has paid
the commission to them. And if the customer came directly then the branch
manager has provide a various schemes to the customer.
2)

This is another objective of the branch to operate function

smoothly. Because there are lot of functions in the branch and if the
branch has operate it smoothly then it help to increase the profit.
3)

This is another objective of the branch to keep friendly relations

with the dealers and DSA to develop the finance. Because the dealer is
the first person where the customer attract firstly. And therefore it is

Page | 25

necessary to the branch manager to keep friendly relation with the dealer
to get more cases from the dealer.

4)

This is another main objective of the branch to provide various

schemes to the customer. If the customer has approach directly to the


branch then the branch manager has provide the schemes to the customer
to take finance from the company.
5)

There are various finance company are available to provide the

finance to the customer. Therefore if they have finance vehicles other than
the Tata motor Finance Ltd. then automatically the market share is to be
decrease. And if the Tata motor finance company ltd. has finance more
than the competitors then automatically the market share of the company
is to increase.

ROLE OF THE BRANCH

Play major role in getting business.

Build better image in the market for the brand.

Be a trainer to our business partners on business process.

Be accountable for the due performance of the contract.

To keep friendly relations with the Dealer.

Page | 26

Page | 27

OBJECTIVES
The main objective of the Project is to understand the probable reason
of a finance company to understand the actual turnover of the company and
the amount of the recovery. With the help of this project the company has to
be decided the new strategies of the company to get more profit.
1

To study the flow of finance and recovery of finance.

To study the guidelines of Finance company.

To study the various strategies of company.

To find out effect of recovery on the company.

To suggest perfect remedies to the company.

1) This is the main objective to study the Tata Motor inance ltd. company.
Because the Tata motor finance company has provided finance only for the
production of Tata motors. Therefore it has a limited scope. But in this finance
company, it has provided finance to the Passenger car, Commercial vehicle,
Construction equipments. Therefore, there is a lot of scope for the flow of
finance and also the recovery of the finance.

2) The another objective is to study the guidelines of finance company. Every


company has its own guideline and they have to follow it to get a great
success. The Tata Motor Finance Ltd. has also some better guidelines and it
is necessary to study it.

Page | 28

3) The another most important objective is to study the various strategies of


the company. The company has a various strategy and it has done its work
under this strategy. This company has operated various functions under the
various situation and condition therefore it is necessary to do study about the
various strategy of the company.

4) This is also necessary for the company to recover the finance amount from
the customer. And for this, they have to apply & use various plans to recover
finance. In some cases the company does not recover the amount because of
serious situations like if the motor has get an accident then the hirer does not
repayment the finance amount. Like this, company handle various situations.
Therefore it is necessary to find out the effect of recovery on the company.
The company has a profit or not.

5) After going through study of the company, the various results are come out
some are positive and negatives. And it is necessary to suggest the perfect
remedies to the company for removing the negative result. If the suggestion is
better then company has to follow it.

SCOPE

The present study deals with TATA Motorfinance and recovery of


finance in Tata Motorfinance ltd. Thus, the scope of my study is confined to
the Tata Motorfinance Ltd. only.
Page | 29

Page | 30

DATA COLLETION
1. Primary data
The research methodology used here does not include any primary data for
reasons of secrecy maintained by the TMF about its action, operations &
customers.
2. Secondary data
Secondary data means the data already available which have been collected
and analyzed by someone else. Secondary data is taken from various
sources like magazines, annual reports, books, newspapers, etc. In this study,
the primary data is collected by the observation method and through the
interaction with staff members. The secondary data is collected through the
following sources:

LIBRARY METHOD
The name itself suggests the meaning of the library method. It involves study
and review of the study material related to the research topic in order to make
knowledge of the researcher in depth.
Data has been collected from following reports
Operating Manual.
Annexure (KYC)
Experts and Internet.

Page | 31

Observation and handling of activities in Branch.

Page | 32

Tata motor finance provides finance to the vehicles which are manufactured
by the Tata Motor Ltd. Tata Motor finance Ltd. is a non banking sector that
provides finance for passenger car, commercial vehicles, and construction
equipments. It is the only finance company who provides finance to the
vehicles of Tata Motors Ltd. but the other finance company provides finance to
the various companies vehicles. Therefore the Tata Motor Finance has a
limited scope and limited jurisdiction.
In Tata motor finance there are two types of marketing direct marketing
and Dealer marketing. In Direct marketing the customer directly attached to
the branch and in Dealer marketing the dealer has to send a customer to the
branch. The detail process of Direct marketing and Dealer marketing as
under: CUSTOMER THROUGH DIRECT MARKETING:In direct marketing the customer contact by marketing executive
through repeat / dealer point / manufacturer / field / loan melas / mailers /
references or any other sources.
The marketing executives has to be in constant touch, personal visits,
through letter, emails news paper, advertisement with all the abouve external
sources for acquiring business. After the customer is identified the normal
process of completion of the deal as stated in walk in customer is to be
followed.
Page | 33

The marketing executive has to collect the list of enquiries from TATA
Motors Dealer, Competitors and Manufacturers. In majority of the deals the
customer may not visit the branch office in such cases the marketing
executives has to personally visit Borrowers residence / office with the entire
file for signature, this is preferable because it assures the genuiness of the
borrowers as well as helps in building relationship.

DEALER DRIVEN BUSINESS: In case of Dealer Driven Business right from acquisition of customer to
conclusion of contract is Dealers responsibility. For which they are entitled to
certain remuneration well as they also have to accept the liability in case of
losses. For detail of remuneration and liability the enclosed annexure can be
preferred. However TMF team has to take care of the portfolio since the
vehicle has been funded by us and any loss will hit our bottom line. At the
same time we have to take care of Dealers earning otherwise they may loose
interest in the business. To enable the dealer lifting vehicles from TMF we
provide certain facilities like on account payment and channel findings
provided conditions are complied.

DIRCET PROCESS BUSINESS MAP

Page | 34

TATA MOTOR FINANCE DIRECT BUSINESS PROCESS MAP


Business Sourcing

Customer Validation

Dealer

Follow up/ Loss sale

Business Sourcing by
Direct Marketing Agents

no
Customer acceptance

Direct Marketing Executive


Start

Business Sourcing
By Branch
BDE / BDM

Discuss vehicle financing


scheme and customer
evaluation

yes

Walk- in Customers
Marketing Executives

Page | 35

TATA MOTOR FINANCE DIRECT DRIVEN PROCESS MAP


Proposal preparation

Sign Agreement

Branch Manager
Review

Document collection &


Review by DMA

Proposal preparation

Document Collection &


Review by Marketing
Executive

Rejected

Inform Field Investigation


agency

Field Investigation
Recommendation

cleared
2

Conduct Field
Investigation

Page | 36

TATA MOTOR FINANCE DIRECT BUSINESS PROCESS MAP


VEHICLE DELIVERY
NO
Approval for Deviation
3

credit Head/
Business Head review
And approval

yes

no
Reject Application

Discrepancy highlighted to
Marketing Executives / DMA
Yes
Yes
2

Sign Agreement and


Collect Documents

Branch Operations Checks


proposal and Associated Documents

Any Deviation
in norms

release order issued


Authorization
No
4

Page | 37

TATA MOTOR FINANCE DIRECT BUSINESS PROCESS MAP


Contract Booking

Case to case payment


Payment by H.O.

Vehicle Delivery

Invoice Entry By Branch

Vehicle Delivery

Invoice Entry By Branch

Payment by HO to
Channel funding Bank

Channel Funding Bank

Page | 38

TATA MOTOR FINANCE DIRECT BUSINESS PROCESS MAPZ


CONTRACT BOOKING

Discrepancy notified to Dealer /


Marketing Executive/ operation
Discrepancy corrected
Not ok

Check for norms


Compliance and
approvals for any
Deviations by
Service provider

OK

Check Stamping

Contract information
on E-mail to HO

ok
6

non
Maharashtra

Maharashtra

Documents to HO

Page | 39

TATA MOTOR FINANCE DIRECT BUSINESS PROCESS MAP

Payment monitoring

To send Documents
For storage
Maharashtra

Contract booked agreement


no generated (H.O.)

first letter to borrower

non
maharashtra

To intimate contract
no to Branch

to send documents for storage

Page | 40

FINANCING PROCEDURE

The Tata Motor Finance Ltd. the company financed to the following: Passenger Car

Car

: - Indica, Indigo, Nano.

MUV

: - Sumo, Safari, Sumo Victa

(Multi Utility Vehicle)

Commercial Vehicle

LCV

: - Tata ACE, Tata Magic, Tata 207

(Light commercial vehicle)

ICV

Tata 407

: - Tata 909, Tata 1109

(Intermediate Commercial
Vehicle)
HCV

: - LPT 2515, LPT 2516, LPT 1613

(Heavy Commercial Vehicle)

Construction Equipments: - Tata Hitachi, EX 110, EX200, JRD

Page | 41

DOCUMENTS REQUIRED
The documents are required as per the type of vehicle and the
as per the type of the hirer. If the hirer is agriculturalist then he has to provide
7/12 extract of the land. If the hirer is salaried then there is required a salary
statement of last two years. And if the hirer is a businessman then he has to
provide last two years Income Tax statements. And the identity proof, address
proof, signature proof is required as per follows: List of Identity Proof, Address proof & Signature proof
INDIVIDUAL: 1

Identity proof :

Valid PAN card (with photo & signature)

Valid Indian Passport (with photo & signature)

Valid photo ration card.

Valid voters ID card.

Valid permanent driving license.

Bank pass book with photograph.

RC book with photograph.

Property (including land) registration document containing


photograph, name, signature and address.

Correct Address :

Valid Indian Passport.

Valid driving license.

Valid voter ID with complete address.

Property Tax bill / receipt / house tax.

Page | 42

Property (including land) registration document containing


name, signature and address.

Valid ration card with complete address.

Latest IT assessment order / acknowledge copy of IT return.

Post office saving pass book.

Housing society bill, electricity bill, water tax challan, land line
telephone bill, gass connection bill, post paid mobile bill.

Bank certification / statement duly certified by the bank in


original (schedule commercial bank) bearing address of the
applicant letter in original on Banks letterhead bearing the
authorizing officers name and signature along with the
stamp of the bank.

LIC / GI policy / latest general / life insurance premium


receipt/ notice.

Copy of leave / lease and license agreement in the individual


name, which are not expired along with utility bill in the name
of land lord.

Signature Proof:

Valid Indian Passport.

Valid PAN card.

Valid permanent driving license.

Photo credit card / photo debit card / photo kisan credit card
bearing signature of the applicant.

Page | 43

Bankers letter /verification letter / Ecs verification in original


of Banks letterhead bearing the authority officers name and
signature with the stamp of the bank.

Valid Ration card with signature.

Property registration document containing photograph,


name, signature and address.

PARTNERSHIP FIRM:

KYC to verify
Name of the firm.
Address of the firm.
Name of all partners and their address.
Telephone numbers of the firm and partners.
Name and address of the beneficiaries.

KYC for all managing partners and all authorized signatories.


KYC as per individual for the managing partner and authorized
signatories and the persons holding the power of attorney if any.

The following documents should be collected for ID proof of the


firm.
Registration certificate procedure for non registered firm.
Partnership deed (partnership deed should contain a provision
for borrowing clause covering hypothecation creating change on
the asset belonging to the firm and giving guarantors)
Power of attorney granted to a partner or an employee of the
firm if any to transact business on its behalf.

Page | 44

Telephone bill in the name of firm / partners.

In case where the partnership is not registered we may waive


the KYC requirement of obtaining the Registration Certificate.
However, all the other KYC documentary requirements have to

be complied with such a deviation is permissible only in cases


where the partnership is not registered. Such a partnership firm
must be filing IT return.
PUBLIC LIMITED / PRIVATE LIMITED COMPANIES :

To verify name of the company , principal place of business,


mailing address of the company, telephone / fax number, names
and address of beneficiaries if any.

KYC as per INDIVIDUAL for all authorized signatures or


employees who are authorized either by the Board Resolution or
the PDA is granted to transact business on its behalf and of the
beneficiary, if any.

Certified true copies (either the managing director or by


company secretary) of the following documents should be
collected.
a) Certificate of incorporation and of commencement of
business (commencement of business is required only in
case of public lid. company) and memorandum and article
of association.
b) Resolution of Board of Directors to apply and avail the
loan and identification of those who have authority to
operate the account.

Page | 45

c) Power of attorney if applicable granted to directors,


mangers, officers or employee to transact business in its
behalf.
d) Copy of PAN allotment letter.
DOCUMENTS REQUIRED FOR INCOME PROOF

Agriculturist

: - 7/12 extracts and Bank statement of six months.

Service

: - salary statement and Bank statement of six


Months.

Businessman

: - IT returns of Three years and bank statements


Of six months.

If necessary the guarantor is required for the Agriculturist, Serviceman,


and Businessman. Out of which one guarantor should be relative.

DOCUMENT SCREENING:-

The above required documents are to be screened (verified) from the


respective Agency in this case. i.e. Risk Containment Unit (RCU). If they
found some error in that document then the member of RCU should verify it
from the concern authority or organization. If the documents are found
incorrect, the customer is informing by the branch head to submit the reliable
documents. Once the documents are verified from the RCU then they sealed
it by using screening stamp.

Page | 46

After verification of the above documents the documents are send to


the main branch Mumbai gives a point to the respective branch for the issuing
the case successfully.

FIELD INVESTIGATION AGENCY


The Akola Rao & Yadav Agency performing the operation of FI.

FI agency should be well-known in the area and has a good infra


structure and database.

Approving authority for appointment is Regional Credit Manager, on


recommendation of Branch Credit Manager and Branch Operations.

Payout structure is to be approved by Credit Head on recommendation


of Regional Credit Manager and Regional Manager.

The FI report should be filled in prescribed format in addition of


following attachments:a) Residence details.
b) Neighborhood check.
c) Lifestyle check.
d) Business address / employee detail check.
e) Checks if customer falls in negative list.
f) Gives route map to residence.
g) Gives an outcome or Negative / Positive on basis of the above.
h) For Car Personal use income details.

The FI Agency submits there report in format directly to Operations.

The branch manager and regional head has to monitor the


performance of the FI Agency.
Page | 47

Bill is submitted by FI monthly to operations and is approved by Branch


Manager.

If the investigation is in local jurisdiction then they have to submit the


report within 24 hours.

INTERNAL VERIFICATION PROCEDURE

RSPM

DEDUPE

CIBIL

SAP

RSPM :- (Risk scoring pricing model)


RSPM is software which use by the various organizations to check the
risk involved in the particular case. A typical questionnaire which include 47
questions about all the respective information about the customer. RSPM
shows whether the case should be approved or not. And if the case is
approved it gives a quote and the maximum percentage of sanction amount.
DEDUPE:DEDUPE is a software which is used by TMF to check whether the
hirer is having any existing loan from TMF. If there is a previous record of the
hirer the branch manager checks repayments of installments and mode of
payments.
CIBIL:- (Credit Information Bureau India Limited )
It is centralized information software which gives the detail about the
hirer having any other finance from any financial institution. (ICICI, HDFC)
SAP :- (System Application Programmed)

Page | 48

SAP is used by TMF to maintain the hirer data base for detail
information about the hirer. Hirer gets a particular Contract no. so that the
hirer can deposit the finance amount at any branch of TMF within the India.
It helps to make a hirer as a business partner of the TMF. SAP is also used to
maintain information about RSPM, DEDUPE, CIBIL, no. of loans / installment/
repayments.

Page | 49

Q U.NO

Question Description ( RSPM)

Application date

Branch

Name & Address of Borrower

4.

Type of Vehicle

5.

What is the cost of the vehicle (in Rs)

6.

How much down payment is the borrower


willing to pay excluding insurance amount

7.

Tenor of Lone

8.

Is the borrower an existing TMF ETR/GTR


Customer with a track record of more the 12
month

9.

How many earning members are there in the


family

10.

Has the borrower provided bank account details

11.

How many PDCs has the borrower provided

12.

Dose the borrower have an IT return/salary


statement
What is the current market value of the
borrowers land /immovable property
Type of residence

13.
14.
15.
16.

How long has the borrower stayed in this


residence
What is the scheme code for this application

17.

Name id of guarantor

18.

On the basis of the above question what is


suggested norm ID for the customer

Customers Remarks
response

Page | 50

NON-DEVIATABLE NORMS FOR ALL PRODUCTS

SR.
NO.
1

2
3

Criterion

Norms

Margin Money

To be paid to TMF or to the dealer if


payment is by way of cheque and if paid to
TMF margin money cheque to have
cleared proper to disbursement. If payment
made to dealer margin money receipt from
dealer to be in file.
In case of direct business- Against the RO.
In case of Dealer Driven Business- after all
the documentation required are met.
Individual -Pass port, Valid PAN card,
Driving license, voter ID, Ration Card.
Limited company- local panchayat ID card,
bank pass book. Others sales tax,
registered partnership deed, shop &
establishment act certificate
Individual house tax, electricity bill, ration
card, telephone bill, gas connection bill.
Salaried- letter from employer with banker
certificate. Others the documents
collected towards identity proof to reflect
the current address of the concern firm.
All installments due on running contract to
be cleared before disbursal of new vehicle.
Passport, photo credit card with signature,
PAN card, signature verification from bank,
signature attested by Notary Public, Driving
license, Any ID issued by a Government
Agency
New vehicle- only vehicles manufacture by
TATA MOTORS LTD. Use vehicle- All
vehicles.
Individual customer below 18 years.

Delivery product by
dealer/manufacture to
customer
Proof of Identity

Proof of Residential
Address

Current Overdue

Signature Proof

Eligible Assets

Age

Note: - The Identity Proof, Residential Address Proof and Signature proof is
mandatory for the Co-borrower/ Guarantor wherever a Co-borrower/Guarantor
has been obtained.

Page | 51

TRACK RECORD FOR MULTIPLE CONTRACTS

Where a Customer has multiple contracts the customer categorization


would be based on the track record of the worst performing contract. For
instance, if the customer has 4 running contracts of which are 3 contracts the
average delay is less than 5 days and in one contract the average delay is 9
days then the customer would fall under the Gtr category and not under the
ETR category.
For the purpose of calculation of track record categorization, the
computation of the average delay and peak delay is being into the system.
Till such time the track is made available through the system, the
computation is to be dome by the branches based on the details available in
the Cardex.

Customer Categorization
ETR (Excellent Track Record)
GTR (Good Track Record)
ATR (Acceptable Track Record)
BTR (Bad Track Record)

II

Average Delay
5 days
10 days
15 days
Above 15 days

Peak Delay
15 days
30 days
45 days
Above 45 days

RECOVERY PROCEDURE
Page | 52

RECOVERY PROCEDURE

PDCs

COUNTER

COLLECTION AGENCY

INSURANCE

OTHERS

LEGAL REMEDIES

PDCs
For the branch post dated cheques are centralized at HO, the branch
sends the PDCs to HO along with the file. Branch generally keeps first PDCs
at branch, if banking date is within 10 days from dispatch date, only because it
takes some time to complete the entry at HO. The first PDCs are banked
locally by entering receipt in system. Bullet amount cheques and security
PDCs are kept at branch in safe custody. The PDC collected and which are to
be kept at branch i.e. first installment PDC, bullet PDC, security PDC are to be
kept in the office safe separately. Installment PDC and bullet PDC are kept
due date wise in PDC contract envelope and security PDC is kept contract no.
wise in PDC contract envelope. Outstation cheques (PDC) are banked on due
date and 0.5% of cheque amount is charge as collection charges no waiver is
allowed.

COUNTER

Page | 53

Efforts should be made to collect the full PDC at the initial stage itself.
Cash collection should be minimize or discourage in view of problems of fake
note, security, burden on branch etc. While depositing the cash on counter the
contract no. vehicle no. and Hirer name is essential. Branch collect EMI from
Hirers vide cash / cheques / pay orders and DD. For cash customer fills up
collection denomination slip. Contract no. is cross checked with the vehicle
no. and Hirer name to ensure that EMI should go to the right place in the
system there is a validation in system that in case of any mismatch receipt will
not be entered in particular contract and proper details are to be obtain so that
there is minimum amount in suspense account. The cashier enters necessary
information in system for giving credit to customer for the amount, which he is
depositing. After saving the receipt it gives a system receipt no. Out station
cheques collection across the counter to be avoided as it results to loss to
company and difficulty in banks clearing and termination etc.

COLLECTION AGENCY
The payment acknowledges book is issued to collection agency/ field
officer/ collection retainers for collecting the EMIs in the market. The
collection agency persons or field officer takes the receipt book with them in
the market and issue receipt to customer who gives the EMIs in the market.
After tearing of receipt the collection agency deposit the same along with
receipt book at TMF office, the operation person take the receipt amount,
acknowledges the third copy and gives credit of the same in system and
wrights a system receipt no. on the third copy and also checks the earlier
receipt if acknowledge by him. As per instruction by HO branch operation are

Page | 54

authorized to issue maximum two no. receipt book to the collection agency.
Remuneration to collection agency finalized based on recommendation of
branch and regional remedial and approval of chief remedial.

INSURANCE
In case of accident of the vehicle the hirer not able to pay any
installment to the TMF. In such case the insurance company has to pay the
remaining installment finance to the TMF. This case is possible when the
vehicle is insured compressive.

LEGAL REMEDIES
In case of default of PDCs there is another way to recover the finance
amount by suing it in court. If the cheques are bounced from the bank the
operation incharge inform to the hirer to deposit the cheque amount in the
branch. And after giving an opportunity to the hirer to deposit the amount if he
not paid then there is a legal remedy to collect the finance amount. After
making all the necessary possible effort to recover the amount this is the last
step is taken by the branch against hirer.

Page | 55

RATES OF INTEREST & PAYOUT STRUCTURE


Page | 56

# Rates of interest applicable for New cars & MUV


Minimum Rates of interest
Product
Tenure/Usage
12-30 months

CAR
Personal
Commercial
9.50 %
11.50 %

Personal
11.75 %

MUV
Commercial
12.25 %

31-60 months

9.00 %

11.25 %

12.00 %

11.00%

Rates of interest applicable for Non Risk Scoring Pricing Model.


Product
Tenure/Usage
12-30 months

Personal
13.25 %

CAR
Commercial
13.50 %

Personal
13.75 %

MUV
Commercial
14.00 %

31-60 months

13.00 %

13.25 %

13.50 %

13.50 %

2)

Payout: - (commission paid to dealer)

DSA Grade
Product
Tenure/Usage
12-30 months

All Grades
NEW CAR
Personal
Commercial
0.50 %
0.50 %

NEW MUV
Persona
Commercial
0.50 %
0.50 %

31-60 months

1.30 %

1.30 %

1.00 %

1.00 %

The lending rates are dependent on various factors like Cost of funds,
Risk inherent to Financing Business, Cost of Operations, and Loan to value ratio,
Repayment Tenor, Geographies, and Usage of Vehicle.

Page | 57

FINANCING FIGURES OF 2007 2009


FOR AKOLA BRANCH

Rs. In lacs

SEGMENT

P.C.NEW
P.C. Re. Fin.
C.V. New
C.V. Re. Fin.
TOTAL

LIVE

FINANCE

OD

OD

% OD

% OD

CONT.

AMT.

CONT.

AMT.

CONT.

AMT.

425

646.70

106

19.70

25

3.05

32

56.53

13

2.48

41

4.39

385

1581.00

119

43.29

31

2.74

25

75.33

17

6.96

68

9.24

867

2359.56

255

72.43

29

3.06

The branch has total 867 live contract with finance amount Rs. 2359.56
lacs as on 25.03.2009 from the year 2007 to 2009. The overdue amount on
this date is Rs. 72.43 lacs which accounts for 3.06 % of total finance amount.
The numbers of contracts lying in OD category are 255 cases, which accounts
for 29 % of total live contracts.

AKOLA & NAGPUR BRANCH BUSINESS

Page | 58

YEAR 2007 2008


SR.NO

PC

CV

265

226

REFINANCE TOTAL FINANCE AMT

60

18,00,00,000

NOTE:In the year 2007 - 2008 there was a consolidated data of the finance
vehicles. Because on 15 05 2007 the branch was started working at Akola
and for the new Branch the Nagpur branch send some cases for finance.

AKOLA BRANCH BUSINESS


Page | 59

YEAR 2008 2009

SR.NO

PC

CV

REFINANCE

TOTAL FINANCE AMT

258

240

20,35,78,000

Page | 60

MARKET SHARE OF TMF AKOLA FOR DEALER(Satish Motors) 1 APRIL 2008 TO MARCH 2009
BRANCH

AKOLA
APR-08
MAY-08
JUN-08
JUL-08
AUG-08
SEP-08
OCT-08
NOV-08
DEC-08
JAN-09
FEB-09
MAR-09
TOTAL

INDICA
Dealer TMF
18
24
16
27
15
7
34
16
29
15
27
23
251

11
20
5
13
5
2
5
10
5
8
16
14
114

XETA
Dealer TMF
0
1
1
3
1
0
2
0
3
0
0
0
11

INDIGO
Dealer TMF
0
0
0
3
0
0
1
0
0
0
0
0
4

5
11
4
5
9
5
8
4
10
15
11
8
95

VICTA/SPACIO
Dealer TMF
3
1
2
2
3
2
1
2
2
3
4
4
29

4
9
4
0
5
3
5
4
5
9
6
3
57

2
3
0
1
3
1
1
2
3
4
5
2
27

GRANDE
Dealer TMF
0
0
0
0
1
0
0
1
1
0
1
1
5

SAFARI
Dealer TMF
0
2
0
0
0
0
0
1
0
0
0
1
4

1
1
0
1
1
0
3
1
3
0
0
0
11

1
2
1
0
0
0
0
0
1
0
0
0
5

TOTAL RETAIL
TOTAL TOTAL MKT
TMF
SHARE
28
17 60.71
46
28 60.87
25
8 32.00
36
19 52.78
32
11 34.38
15
5 33.33
52
8 15.38
26
15 57.69
51
11 21.57
39
15 38.46
45
25 55.56
35
21 60.00
430
183 42.56

Page | 61

MARKET SHARE WITH COMPITITORS FOR 08- 09


Sr. No.
1
2
3
4
5
6
7
8
9
10
TOTAL

BANKERS NAME
ICICI Bank
Sundaram Finance Ltd.
Kotak Mahindra Primus Ltd.
HDFC Bank Ltd.
TATA Motor Finance Ltd.
Cash / Self / No Finance
Co-operative Bank
Mahindra Finance
State Bank Of India
Other

INDICA
9
5
9
12
115
34
11
9
20
34
258

XETA
1
0
0
0
12
1
1
1
3
2
21

INDIGO SAFARI
0
0
2
0
0
5
37
18
14
1
8
15
100

1
2
5
2
0
0
8
2
20

SUMO TOTAL
1
11
1
8
1
1
30
8
1
1
1
11
56

11
20
199
63
27
12
40
64
455

% SHARE
2.42
1.76
2.42
4.40
43.73
13.85
5.93
2.64
8.79
14.06
100

MARKET SHARE WITH COMPITITORS FOR 08- 09

Page | 62

Page | 63

Page | 64

1) From the year 2007-2009, there was a total finance amount of Akola
branch Rs. 2359.56 lacs. But, during the same year the Over Due
amount was 72.43 lacs.

2) The numbers of contracts lying in OD category are 255 cases, which


accounts for 29 % of total live contracts.

3) In the year 2007-2008 the total PC was 265 but it decrease in the next
year 2008-2009 was 258. But opposite to PC, CV was in year 20072008 was 226 and it increased in year 2008-2009 was 240.

4) In the year 2008-2009 TMF Akola has a highest amount of market


share with the dealer (Satish Motors) and it had above 50% of market
share in the months of April 08, may 08, July 08, nov 08, Feb. 09,
march 09.

5) From the above data we get that there is a interrelation between


financial amount and OD amount. As financial amount increases OD
amount also increase and vise versa.

Page | 65

Page | 66

1)

Details study on this project was not possible in short time of two
months..

2)

Conclusion and recommendations are bound by limitation and


subjective study.

3)

On

web

site

www.tatamotorfinance.com,

all

necessary

information is not available.

Page | 67

Page | 68

After working of 45 days and by learning the various policies of TMF, I would
like to conclude the following points.

1)

TMF is the major financer who provides finance to all products of Tata

Motors. Because people easily put trust on TMF as it provide links with Tata
Motors.
2)

Company provides a quick approval to the customers and gives the

fast disbursal of finance within 24 to 48 hours.


3)

TMF has a maximum market share of 43.73 % in comparison with

Dealer and Competitors.


4)

It maximum business based on Dealer Channel Business because

approach of customer is first to the Dealer.


5)

It has a lot of Branches within India and out side India. So, it provides a

unique contract no. code which enables the customer to make payment in any
of the branch.
6)

It has provided finance with the recommendation of employees. It means

that the TMF put trust on its employee.


7)

TMF has gives a lowest interest rates to the customer in that of

comparison with other financial institutions and banks.


8)

TMF works on customer friendly credit policy as it provides finance to

the customer with in a short time.

Page | 69

Page | 70

Following steps should be use to increasing Finance

1)

TMF should concentrate on salaried and self employed

customer to avoided disbursements of repayments.


2)

TMF should maintain friendly relation with the Dealer, so that

they should suggest TMF for making Finance in a proper way.


3)

Company should concentrate direct customer except Dealer

driven to avoid commission and provide subsidies in the interest rates.


4)

It should organize their own programs to attract the customers

by making interaction with customers by appointing best executives.


5)

It should concentrate towards middle class customer by

providing low rates of EMIs and interest.


6)

It should appoint reputed collection agency to collect the

Overdue within proper time.


7)

TMF should keep its market share above 55 % to increase its

credit.
8)

Company should maintain good relation with existing customer

so that they approach for other finances.


9)

It should offer proper schemes for agriculture based customer.

10)

The Company should provide proper services to the customers

for their satisfaction

Page | 71

Page | 72

Operating Manual.

Annexure, Know Your Customer (KYC)

Business records of branch.

Services and observations.

Website : www.tatamotorfinance.com

Page | 73