Transcript
AMITY BUSINESS SCHOOL, NOIDA
MBA-GENERAL (2010-12)
2 nd SEMESTER
SECTION-B
MANAGEMENT INFORMATION SYSTEM
PROJECT
TOPIC: MIS AT HDFC COMMODITIE LOAN DIVISION
SUBMITTED TO: Ms ANITA VENAIK
SUBMITTED BY:
VRIBHA GUPTA , B01
SANJNA KAUL , B02
PRIYANKA GOYAL , B03
AANCHAL WALIA , B04
ANKITA SHARMA , B14
1.1 ORIGIN OF THE ORGANIZATION
The Housing Development Finance Corporation Limited (HDFC) was amongst the first
to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a
bank in the private sector, as part of the RBI's liberalization of the Indian Banking
Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank
Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations
as a Scheduled Commercial Bank in January 1995.
HDFC is India's premier housing finance company and enjoys an impeccable track record
in India as well as in international markets. Since its inception in 1977, the Corporation
has maintained a consistent and healthy growth in its operations to remain the market
leader in mortgages. HDFC has developed significant expertise in retail mortgage loans
to different market segments and also has a large corporate client base for its housing
related credit facilities.
1.2 GROWTH AND DEVELOPMENT OF THE ORGANIZATION
HDFC Bank is head quartered in Mumbai. The Bank at present has an enviable network
of over 684 branches spread over 316 cities across India. All branches are linked on an
online real-time basis. Customers in over 120 locations are also serviced through
Telephone Banking. The Bank's expansion plans take into account the need to have a
presence in all major industrial and commercial centers where its corporate customers are
located as well as the need to build a strong retail customer base for both deposits and
loan products. Being a clearing/settlement bank to various leading stock exchanges, the
Bank has branches in the centers where the NSE/ BSE have a strong and active member
base. The Bank also has a network of about over 4000 networked ATMs across these
cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and
international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express
Credit/Charge cardholders.
In a milestone transaction in the Indian banking industry, Times Bank Limited
(another new private sector bank promoted by Bennett, Coleman & Co./Times
Group) was merged with HDFC Bank Ltd., effective February 26, 2000. As
per the scheme of amalgamation approved by the shareholders of both banks
and the Reserve Bank of India, shareholders of Times Bank received 1 share
of HDFC Bank for every 5.75 shares of Times Bank.
1.3 HDFC BANK - Products at a glance:
I . PERSONAL BANKING
1. Accounts and Deposits
i) Savings Accounts
ii) Current Accounts
iii) Fixed Accounts
iv) Recurring Deposits
v) Demat Account
vi) Safe Deposit Lockers
2. Loans
i) Personal Loans
ii) SmartDraft
iii) Home Loans
iv) Two Wheeler Loans
v) New Car Loans
vi) Used Car Loans
vii) Cash Back Loans
viii) Car N Cash Loans
ix) Loan against gold
x) Educational Loan
xi) Loan against securities
xii) Loan against property
xiii) Loan against rental receivables
xiv) Health Care Finance
xv) Retail Agri Loans
xvi) Tractor Loans
xvii) Commercial Vehicle Finance
xviii) Construction Equipment Finance
xix) Warehouse Receipt Loans
xx) Government Sponsored Programs
3. Cards
i) Credit Cards
ii) Debit Cards
iii) Prepaid Cards
4. Investments and Insurance
i) Wealth Advisory Services
ii) Mutual Funds
iii) Tax Planning
iv) Insurance
v) General Insurance
vi) Health Insurance
vii) Bonds
viii) Knowledge Centre
ix) Equities & Derivatives
x) Mudra Gold Bar
xi) Mudra Silver Bar
xii) IPO Application through ASBA
5. Forex and Trade Services
i) Foreign Exchange and Trade Services
The following are different methods of transacting in Foreign Exchange and remitting
money.
-Travellers Cheques
-Foreign Currency Cash
-ForexPlus card
-ForexPlus Chip card
-Foreign Currency Drafts
-Cheque Deposits
-Remittances
-Cash to Master
-Trade Services
-Forex Services Branch Locator
6.Payment Services
i) Verified by Visa (VBV)/ MasterCard SecureCode
ii) NetSafe
iii) Merchant Services
iv) Prepaid Mobile Refill
v) ngpay
vi) BillPay
vii) Visa BillPay
viii) PayNow
ix) Register&Pay
x) InstaPay
xi) DirectPay
xii) Visa CardPay
xiii) e-Monies National Electronic Funds Transfer
xiv) Online Payment of Excise & Service Tax
xv) Online Payment of Direct Tax
xvi) Online payment of DVAT and CST
xvii) Online payment of GVAT
xviii) Religious Offerings
xix) Donate to Charity
xx) RTGS Funds Transfer
7. Imperia/ Preferred/ Classic
i) HDFC Bank Imperia Banking
ii) HDFC Bank Preferred Banking
iii) HDFC Bank Classic Banking
8. Private Banking
i) Advisory Services
ii) Research Reports
9. Access Your Bank
i) NetBanking
ii) Credit Cards Online
iii) PhoneBanking
iv) InstaAlerts
v) MobileBanking
vi) ATM
vii) OneView
viii) Email Statements
ix) Branch Network
II. NRI BANKING
III. WHOLESALE BANKING
1.4 HDFC LOAN DIVISION IN DETAIL
I. Personal Loan
Features & Benefits :
- Borrow up to Rs 15,00,000 for any purpose depending on your requirements.
- Flexible Repayment options, ranging from 12 to 60 months.
- Repay with easy EMIs.
- One of the lowest interest rates.
- Hassle free loans - No guarantor/security/collateral required.
- Speedy loan approval.
- Convenience of service at your doorstep.
- Customer privileges
II. Home Loan
Home loans for individuals to purchase (fresh / resale) or construct houses. Application
can be made individually or jointly. HDFC finances up to 80% of the cost of the property
(including the cost of the land) based on the repayment capacity of the customer.
-Home Improvement Loan
-Home Extension Loan
-Land Purchase Loan
-Loan cover Term Assurance Plan
-Automated Repayment of Home loan EMI
III. Two Wheeler loan:
Flexible repayment options, ranging from 12 to 48 months available even at the point of
purchase.
Repay through post-dated cheques with easy EMIs. Calculate your EMI.
Hassle free loans - No guarantor required.
Speedy loan approval.
Available for almost all models at attractive interest rates.
Free gifts from time to time on approval of your Two Wheeler Loan. (Watch this
space for more details on the free gift promotion).
Special Schemes to suit your needs
IV. New Car Loan:
Features & Benefits :
Avail 100% finance on your favorite car.
Flexible repayment options, ranging from 12 to 84 months.
Borrow up to 3 times your annual salary (for salaried professionals) and 6 times
your annual income (for self employed professionals).
Speedy processing - within 48 hours.
Repay with easy EMIs.
Attractive car loan plans - To Fastrack your loan, just choose the plan that is right
for you.
Attractive Interest rates
Hassle-free documentation.
Customer Privileges
If you have had a Preferred Account or a Corporate Salary Account with HDFC
Bank for more than six months, you can get fast approvals on your loans with
minimal documentation.
V. Used Car Loan
Features & Benefits
Choose any car manufactured in India within a certain age*.
Borrow up to 80% of the value of the car.
Flexible repayment options, ranging from 12 to 60 months.
Borrow up to 3 times your annual salary (for salaried professionals) and 6
times your annual income (for self employed professionals)**.
Available for almost all car models at attractive interest rates.
Repay with easy EMIs.
Attractive car loan plans - To Fastrack your loan, just choose the plan that
is right for you.
VI. Cash Back Loan:
Features & Benefits
Borrow up to 85% of the final invoice value of the car purchased without a loan
Receive funding on most vehicles
Repay over a period of up to 60 months
Attractive interest rate of 13.50%
Disbursement will be made in favour of the car owner (as is reflected in RC copy
and invoice)
VII. Car N Cash
is an additional cash loan on your existing car (similar to Top Up). If you own a
car with a clear repayment track record for 9 months minimum, then you can get
an additional loan to the extent of your original loan amount, at attractive rate of
interest.
Features
Borrow up to 100% of the original loan value of the car.
Valuation is not mandatory.
No Income documents are required.
Wide range of approved models/variants and manufacturers are considered.
Disbursals are quick and hassle-free.
VIII. Gold Loan
. Features & Benefits
Avail Loan upto Rs.10,00,000 & upto 90% of value.
Safety & Security of your Gold Jewellery
ATL - Anytime Liquidity
No EMI, Service only Interest and enjoy the Loan facility
Lower Interest Rates - Your savings can be Invested in several Investment
Avenues
IX. Student education loans
Loan for Indian Educaton:
Student Loans Upto Rs. 15 Lakhs for education In India
Unsecured Lending Upto INR 7.5 Lakhs
No Collateral Or Third Party Guarantee**
Wider Range Of Collateral For Loans Above INR 7.5 Lakhs
Residential Property
HDFC Bank Fixed Deposit
LIC/NSC/KVP
Loan available upto tenure of 7 years including moratorium period
Repayment to start 1 year after course completion / 6 months after obtaining
employment (whichever is earlier)
Loans available for short duration/ job oriented courses also
Avail the tax rebate, offered under section 80-E of the Income Tax Act 1961* for
the entire interest amount paid towards your education loan.
Click here to view the income tax circular.
E-mail loansupport@hdfcbank.com to receive interest certificate for FY 09-10.
Loans available for other course related expenses also!
From Bank's approved list of institutes.
Third Party Guarantee required for loans between Rs 4 lakhs to 7.5 lakhs.
Special privileges
Service At Your Door Step
Loans disbursed directly to the educational institution as Per the Fee Schdule.
Insurance Protection from HDFC ERGO
Gateway To Other Banking Products And Services.
Savings Account
Insurance Protection from HDFC ERGO General Insurance Company Ltd
Loan for Foreign Education:
Features & Benefits
Education Abroad
Student Loans Upto Rs. 20 Lakhs for education Abroad#
Unsecured Lending Upto INR 7.5 Lakhs
No Collateral Or Third Party Guarantee **
Wider Range Of Collateral For Loans Above INR 7.5 Lakhs
Residential Property
HDFC Bank Fixed Deposit
LIC/NSC/KVP
Loan available upto tenure of 7 years including moratorium period #
Repayment to start 1 year after course completion / 6 months after obtaining
employment (whichever is earlier)
Avail the tax rebate, offered under section 80-E of the Income Tax Act 1961* for
the entire interest amount paid towards your education loan.
Click here to view the income tax circular.
E-mail loansupport@hdfcbank.com to receive interest certificate for FY 09-10.
Pls check with your CA.
From Bank's approved list of institutes.
Third Party Guarantee required for loans between Rs 4 lakhs to 7.5 lakhs.
X. Loan Against Securities:
Features & Benefits
No EMIs
No Post Dated cheques
No Pre-payment charges
Interest charged only on utilised amount.
Exhaustive number of approved securities
Upto 80% Loan
Simple and speedy processing
Term Loan facility also available against select securities
Overdraft facility can be availed against pledge of:
Equity Shares- Demat Shares up to 50% of the value.
Mutual Fund units* - Mutual Funds up to 50% of NAV (Net Asset Value). See
approved Mutual Fund Schemes.
Gold ETF
NABARD's Bhavishya Nirman Bonds
RBI Bonds (8% Savings Bonds 2003 (Taxable))
Life Insurance Policies issued by LIC & Select Private Insurance Companies See
approved Life Insurance Policies.
National Savings Certificate (NSC)
Kisan Vikas Patra(KVP)
Gold Deposit Certificates (GDC)
Non Convertible Debentures
XI. Loan Against Property (LAP)
Features & Benefits
Loans to expand your business or to meet any personal need
Residential & Commercial properties accepted
Maximum Loan to value*
Flexible product offerings - EMI based loan / Overdraft facility available.
High tenure loans for ease of repayment.
Attractive interest rates.
Specially designed products for Self Employed.
XII. Loan against Rent Receivables (LARR )
Features & Benefits
Higher eligibility on net rentals.
Attractive interest rates.
Extended loan tenure available.
Customized product to suit your needs and structured specially for you.
Simple documentation and fast processing.
XIII. Tractor Loans:
Features & Benefits
Covers a wide range of tractors manufactured in India.
Covers customer segments, using tractors for agricultural as well as commercial
purposes.
Avail finance up to 85 % on your favorite tractor.
Flexible repayment options ranging from 12 - 84 months.
Speedy processing.
Repay with easy PDC's or by way of cash collection.
Attractive interest rates.
Hassle Free documentation.
XIV. Retail Agri loan:
Features & Benefits
The Kisan Gold Card is aimed at meeting the production and investment needs of
the farming community. Production needs broadly cover crop production
requirements, including funds for all related inputs to grow a crop. We also meet
Post Harvest and Domestic consumption requirements.
The Card caters to investment needs such as purchase of agricultural related
equipment/implements, irrigation requirements, construction of farm related
buildings, and investment in agriculture related activities such as Dairy, Piggery,
Beekeeping and the like.
1.4 MAJOR CHALLENGES
On close scrutiny , we find 4 key issues of corporate governance, risk appetite, financial
inclusion and healthy profitability being consistently reflected across the overall
processes, operations, product, practices and consequently in the information flow of the
bank’s commodities operations. Thus, major challenges to be addressed by the process
flow and subsequent information flow are the following:
1. To acquire a major chunk of India’s expanding banking and financial services
industry through a disciplined growth strategy focusing on quality and not on
quantity and delivering high quality customer service.
2. Leveraging the technology platform to reduce operating costs while delivering
more products to more customers.
3. Disciplined credit risk management leading to healthy profitability.
4. Developing innovative products and services in tandem with the customer’s needs
and demands.
5. Understanding trade cycle, business cycle and working capital cycle of the clients
and crop seasonality and matching the same to the product norms and bank
norms.
1.5 HDFC BANK – MIS (IT INFRASTRUCTURE AND THE SYSTEMS)
HDFC Bank uses a customized MIS by the name of Finware which has
different sections to address the needs of its different departments and
products.
For security, the bank has employed 128-bit Secure Socket Layer (SSL)
technology which is the highest level of security commercially available.
HDFC Bank operates in a highly automated environment in terms of
information technology and communication systems. All the bank’s
branches have online connectivity, which enables the bank to offer speedy
funds transfer facilities to its customers.
Multi-branch access is also provided to retail customers through the
branch network and Automated Teller Machines.
The Bank has made substantial efforts and investments in acquiring the
best technology , made available internationally to build the infrastructure
for a world-class bank.
The bank’s business is supported by scalable and robust systems which
ensure the delivery of the finest services to the customers consistently.
Engagement of internet and latest technology has been one of the key
priorities of the bank and already it has made significant progress by web
enabling its core businesses.
1.6 PROCESS FLOW
It is imperative to understand the product and its target customers , various actors within
the bank before getting down to the process flow. The commodities business group of the
bank offers two loan products, viz. Service Provider (SP) Loan and Term Cash Credit
(TCC) which can be customized as per the requirements of the client . The only
difference between them is the nature of the collateral offered and, accordingly , there is a
difference in the disbursement procedure of the two.
The product that we are going to take up is the SP loan. The purpose of this loan is to
cater to short-term working capital requirement of farmers/ agricultural commodities
processors like ginners and oil mill owners, etc., given against the stocks of commodities
which the borrower has in the warehouse but cannot convert it into cash as the price
parity is not there.
Thus, the key activities herein are assessment of the creditworthiness of the borrower,
decision on credit limit as per the case, valuation of the stock and warehouse
management/ collateral management , disbursement of the loan amount and release of the
stock.
Some Algorithms showing the process flow:
Process Flowchart for warehouse Receipt Financing
Borrower Loan Request (CWC/SWC)
Borrower Loan Request (CWC/SWC)
MIS AT HDFC:
Management Information system is supposed to include Decision Support Systems,
resource and people management applications,project management and database retrieval
applications.But for this product the focus is on decision support system and data
maintenance and retrieval. There are two types of report being generated by MIS in use:
1.Exception Report:
1.Borrower Approval report.
2.Outstanding Report.
3.Closure report.
4.Deferral tracking Report.
2.Normal Report.
1.CAM Dattabase,
2.Price Margin3.Cap Margin
4.Disbursement Report,
5.RM Database
6.SP Database
7.SP Collateral Security Database
The following are the key performance areas of MIS:
1. SALES:
There is a need to keep a track of the sales of the loan with respect to the performance of
the individual RMs and SPs.CAM database ,Borrower approval report,Disbursement
report capture the relevant data for the same.Deferral tracking report,outstanding report
and closure report capture data for the performance mapping of an SP from other things.
2. SERVICING:
RM database,SP database and Deferral tracking reports are ,meant to capture data on the
service component of the product and facilitate the bank to the concerned person so that
unnecessary delay and inconvenience to the customer can be avoided while complying
with the norms.
3. RISK MITIGATION:
SP collateral security database, Price cap and margin along with Disbursement report,
Outstanding Report and Closure Report are meant to capture data related to risk
assessment of the client to ensure that at no point of time their financials move into a high
risk category.
4. MONITORING:
Disbursement report, outstanding report ,Closure report, Deferral tracking report are
generated to ensure proper monitoring of the client’s credit behavior and flow of funds.
5. PRODUCT DESIGN:
This is one area which is not given ample attention by the existing MIS,despite bank’s
objectives clearly listing it as apriority area.There should be a provision of generating a
report by collating the credit needs of different categories of clients so that it can be used
by the product team to come up with new loan products keeping in mind the bank’s
norms and guidelines as well as the customers’ needs.
IMPROVEMENTS PROPOSED:
The nature of the credit need over here is such that there is a special requirement of the
timely processing and disbursement of the loan. The completion in the banking and
financial services industry is ,apart from other things ,time based competition. But the
process of exception reporting while examining and verifying the application documents
is not automated. It is done through emails and telephonic conversations which account
for unnecessary delays in processing of the applications and in some cases it results not
only in loss of customer but also creates bad vibes in the market.
It is therefore ,proposed that the process of exception reporting during various stages of
the application processing be automated so that reports are automatically generated and
mailed to the applicant, concerned RMs and SPs for timely rectification/ explanation.
This automation should also have a timeline for the processing of the application and
once the timeline has elapsed ,a report should be generated mentioning the pending cases
and sent to the persons concerned for speedy dispensation on a high priority.
At the same time the reports of outstanding liabilities and deferrals like renewal of
insurance ,etc should be mailed to the customer as well, once they have been generated
mentioning the pending cases and sent to the persons concerned for speedy dispensation
on a high priority .
At the same time the reports of outstanding liabilities and deferrals like renewal of
insurance etc should be mailed to the customer as well, once they have been generated by
the system which is not being done so far. Customers are being informed by bank
officials after they receive the report and , and sometimes they do not get enough time to
make the necessary arrangements.
LIMITATIONS:
1.The nature of documents involved is such that there is a need to involve different
departments having the necessary expertise and experience for verification /checking of
different documents making it difficult to go for the complete automation of the process.
2.Bank’s tie up with insurance companies also poses a serious limitation to the automatic
emailing and SMS alerts ,as done in retail banking by the name of INSTALERT,to the
customer in case of deferrals and insurance lapses.The reason for this is that if the
customer receives the automatic alerts then he may get his stock insurance renewed
through some insurance player ,other than the one with which bank has a tie
up.Perhaps ,he gets some monetary gain in terms of a lower premium or has a relatively
high comfort level with the insurance agent in terms of service but bank has its own
parameters and standards which the insurer must be aware of and follow strictly.For the
same reason the bank would rather prefer to keep the insurance issue in its own hands and
ensure that the insurance service provider with whom it has a tie up manages it.
TEMPLATES:
Following are the templates for the reports generated by the MIS for the SP loan:
Price cap and margin:
Serial Number
Commodity
Price cap
Margin(%)
Final date o repayment
CAM database:
Serial Number
Customer Id
Client’s name
Product
Party entity
RM name
Zone
CAM Number
CAM expiry date
CAM exten date
Disbursement Report:
User ref Number
Customer ID
Value date
Maturity
Customer Name
Insurance maturity date
Finance account Number
Amount
REMARKS
Outstanding
Normal Interest Rate
Personal Interest Rate
SP ID
SP Name
Warehouse Code
Commodity Code
WHR no
WHR amount
WHR maturity
Processing fee + service tax
Net loan amount
Margin %
Priority Code
Product Code
Outstanding Report:
Ref Number
Customer ID
Customer Name
Value Date
Maturity Date
Status(PDO,Normal)
Insurance Maturity Date
Amount
Remarks
Outstanding Amount
Normal and penal interest rate
SP ID
SP Name
Warehouse Code
Commodity
Priority And Product Code
Closure Report:
Ref Number
Customer ID
Customer Name
Value Date
Maturity Date
Remarks
Component
Normal And penal interest rate
Liquidation Rate
Priority and Product code
SP ID
SP Name
Liquidation Amount
Reports:
RM Database:
RM name
RM zone
RM Contact No
RM email Address
SP Sanctioned
Commodities
SP Region
SP state
RM name
ROI
Processing Fee
SP commission %
SP Database
Serial Number
SP name
SP Contact Number
SP address
SP code
Amount
Deferral Compliance date
Deferral approved By
RM name
RM zone
Deferral Tracking Report
Serial number
SP name
SP code
Borrowers Name
Deferral Taken
Deferral Date
CONCLUSION:
Thus would not be wrong to say that MIS is lifeblood of any organization enabling it to
perform effectively and ensuring profitability. In case of a bank or a financial institution,
it assumes a relatively higher importance because of compliance issues ,convenience of
anytime and anywhere and the wide range of risks involved as more and more
transactions and [processes become online. At the same time, with the way we do
business which is undergoing a rapid change ,it is really a tough and challenging job to
automate and structure the entire process flow especially in a product like credit facility
which needs to be customized for different customers even if it is designed for the same
purpose. Inspite of this automation of the information and process flow can reduce the
risk and cost of credit to a great extent and catalyze the overall development of society.
REFERENCES:
Managing information systems- laudon and laudon
Managing Information systems- Brian
Hdfcbank.com
Internet
Journals
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