STUDY OF TATA MOTOR FINANCING & RECOVERY.doc

DEPARTMENT OF MANAGEMENT STUDIES

DEPARTMENT OF MANAGEMENT

TECHNOLOGY & RESEARCH

(NAGPUR UNIVERSITY)APROJECT REPORTONSTUDY OF TATA MOTOR FINANCING & RECOVERYMANAGEMENTIN TATA MOTOR FINANCE LTD[AKOLA BRANCH]

SUBMITTED BYSWAPNIL A.CHOPADEGUIDED BY

Prof. S.R.BHOYAR (2009-2010)

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.

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 Co-ordinator Principal/Director DMTR,N.M.D.College,Gondia 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 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)

I N D E XSR. NO.PARTICULARPAGE NO.

1.TITLE OF PROJECT 1

2.EXECUTIVE SUMMARY2

3.COMPANY PROFILE 4

4.OBJECTIVES AND SCOPE OF THE PROJECT19

5.RESEARCH METHODOLOGY 21

6.THEREOTICAL BACKGROUND22

7.DATA ANALYSIS & INTERPRETATION44

8.FINDINGS51

9.LIMITATIONS52

10.CONCLUSION53

11.RECOMMENDATIONS54

12.BIBLIOGRAPHY55

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

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 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.

INTRODUCTION OF COMPANYTata 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 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 non-core 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 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.

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.com6)Contact Person

: -Mr. Krishna Dhote

(Branch Manager)

7)Starting Year

: -15 05 2007

Staffing and Designation

Sr. NoNameDesignationWorking for

1Krishna DhoteBMTMF

2Deepali PohareOps ExecutiveTMF

3Abhishek DeshmukhBDM PCTMF

4Prashant DhandreBDM CVTMF

5Anil DeshmukhCRETMF

6Dinesh DahikarBDE CEQTCL

7Yogesh AgrawalSales ManagerTSL

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.

Marketing

Credit

Operation

Remedial

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

REPEAT2) 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.

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.

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

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.

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.

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.

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.

OBJECTIVES OF BRANCH1 To attract the customer towards the branch.

2 To operate function smoothly.

3 To keep friendly relations with the Dealer and DSA.

4 To provide various schemes as per terms and conditions.

5 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 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 BRANCH1 Play major role in getting business.

2 Build better image in the market for the brand.

3 Be a trainer to our business partners on business process.

4 Be accountable for the due performance of the contract.

5 To keep friendly relations with the Dealer.

OBJECTIVESThe 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.

2 To study the guidelines of Finance company.

3 To study the various strategies of company.

4 To find out effect of recovery on the company.

5 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.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. SCOPEThe 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.

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 dataSecondary 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.

Observation and handling of activities in Branch.

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. 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 MAPTATA MOTOR FINANCE DIRECT BUSINESS PROCESS MAP

Business Sourcing

Customer Validation

Dealer

Follow up/ Loss sale

Business Sourcing by

no

Direct Marketing Agents

Customer acceptance

Direct Marketing Executive

Start

Business Sourcing

Discuss vehicle financing

By Branch

scheme and customer

BDE / BDM

evaluation

yes

Walk- in Customers

Marketing Executives

1

TATA MOTOR FINANCE DIRECT DRIVEN PROCESS MAP

Proposal preparation

Sign Agreement

Branch Manager

Review

3

Document collection &

Review by DMA

Rejected

1Proposal preparation Document Collection &

Inform Field Investigation

Field Investigation cleared

Review by Marketing

agency

Recommendation

Executive

2

Conduct Field

Investigation

TATA MOTOR FINANCE DIRECT BUSINESS PROCESS MAP

VEHICLE DELIVERY

NO

Approval for Deviation

yes3credit Head/

no

Business Head review

And approval

Reject Application

Discrepancy highlighted to

Marketing Executives / DMA

Yes

Yes

2Sign Agreement and

Branch Operations Checks

Any Deviation release order issued

Collect Documents

proposal and Associated Documents

in norms

Authorization

No

4

TATA MOTOR FINANCE DIRECT BUSINESS PROCESS MAP

Contract Booking

Case to case payment

Payment by H.O.

Vehicle Delivery

Invoice Entry By Branch

4

5

Vehicle Delivery

Invoice Entry By Branch

Payment by HO to

Channel funding Bank

Channel Funding Bank

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

5

approvals for any OK

Check Stamping

Contract information

ok

Deviations by

on E-mail to HO

6

Service provider

non

Maharashtra

Maharashtra

Documents to HO

TATA MOTOR FINANCE DIRECT BUSINESS PROCESS MAP

Payment monitoring

To send Documents

For storage

Maharashtra

Contract booked agreement

first letter to borrower

6 no generated (H.O.)

non

To intimate contract

maharashtra

no to Branch

to send documents for storageI 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) Tata 407

ICV

: - 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

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.

2 Correct Address :- Valid Indian Passport.

Valid driving license.

Valid voter ID with complete address.

Property Tax bill / receipt / house tax. 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.

3 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.

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.

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.

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 PROOF1 Agriculturist : - 7/12 extracts and Bank statement of six months.

2 Service

: - salary statement and Bank statement of six

Months.

3 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.

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.

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)

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.Q U.NOQuestion Description ( RSPM)Customers responseRemarks

1Application date

2Branch

3 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

13.What is the current market value of the borrowers land /immovable property

14.Type of residence

15.How long has the borrower stayed in this residence

16.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

NON-DEVIATABLE NORMS FOR ALL PRODUCTSSR.

NO.CriterionNorms

1Margin MoneyTo 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.

2Delivery product by dealer/manufacture to customerIn case of direct business- Against the RO. In case of Dealer Driven Business- after all the documentation required are met.

3Proof of IdentityIndividual -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

4Proof of Residential AddressIndividual 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.

5Current OverdueAll installments due on running contract to be cleared before disbursal of new vehicle.

6Signature ProofPassport, 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

7Eligible AssetsNew vehicle- only vehicles manufacture by TATA MOTORS LTD. Use vehicle- All vehicles.

8AgeIndividual customer below 18 years.

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.

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 CategorizationAverage DelayPeak Delay

ETR (Excellent Track Record)5 days15 days

GTR (Good Track Record)10 days30 days

ATR (Acceptable Track Record)15 days45 days

BTR (Bad Track Record)Above 15 daysAbove 45 days

II RECOVERY PROCEDURERECOVERY PROCEDURE

PDCs

COUNTER

COLLECTION AGENCY

OTHERS

INSURANCE

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

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 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.

RATES OF INTEREST & PAYOUT STRUCTURE

# Rates of interest applicable for New cars & MUVMinimum Rates of interest ProductCARMUV

Tenure/UsagePersonalCommercialPersonalCommercial

12-30 months9.50 %11.50 %11.75 %12.25 %

31-60 months9.00 %

11.00%11.25 %12.00 %

Rates of interest applicable for Non Risk Scoring Pricing Model.ProductCARMUV

Tenure/UsagePersonalCommercialPersonalCommercial

12-30 months13.25 %13.50 %13.75 %14.00 %

31-60 months13.00 %13.25 %13.50 %13.50 %

2)Payout: - (commission paid to dealer)DSA GradeAll Grades

ProductNEW CARNEW MUV

Tenure/UsagePersonalCommercialPersonaCommercial

12-30 months0.50 %0.50 %0.50 %0.50 %

31-60 months1.30 %1.00 %1.30 %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.FINANCING FIGURES OF 2007 2009FOR AKOLA BRANCH

Rs. In lacs

SEGMENTLIVE

CONT.FINANCE

AMT.OD

CONT.OD

AMT.% OD

CONT.% OD

AMT.

P.C.NEW425646.7010619.70253.05

P.C. Re. Fin.3256.53132.48414.39

C.V. New3851581.0011943.29312.74

C.V. Re. Fin.2575.33176.96689.24

TOTAL8672359.5625572.43293.06

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

YEAR 2007 2008

SR.NOPCCVREFINANCETOTAL FINANCE AMT

12652266018,00,00,000

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

YEAR 2008 2009

SR.NOPCCVREFINANCETOTAL FINANCE AMT

1258240720,35,78,000

MARKET SHARE OF TMF AKOLA FOR DEALER(Satish Motors) 1 APRIL 2008 TO MARCH 2009BRANCHINDICAXETAINDIGOVICTA/SPACIOGRANDESAFARITOTAL RETAIL

AKOLADealerTMFDealerTMFDealerTMFDealerTMFDealerTMFDealerTMFTOTALTOTAL

TMFMKT

SHARE

APR-0818110053420011281760.71

MAY-08242010111930212462860.87

JUN-08165104240000125832.00

JUL-0827133352010010361952.78

AUG-081551093531010321134.38

SEP-0872005231000015533.33

OCT-08345218151003052815.38

NOV-0816100042421110261557.69

DEC-0829530102531031511121.57

JAN-0915800153940000391538.46

FEB-09271600114651000452555.56

MAR-0923140084321100352160.00

TOTAL251114114952957275411543018342.56

MARKET SHARE WITH COMPITITORS FOR 08- 09Sr. No.BANKERS NAMEINDICAXETAINDIGOSAFARISUMOTOTAL% SHARE

1ICICI Bank91001112.42

2Sundaram Finance Ltd.5020181.76

3Kotak Mahindra Primus Ltd.90011112.42

4HDFC Bank Ltd.120521204.40

5TATA Motor Finance Ltd.115123753019943.73

6Cash / Self / No Finance34118286313.85

7Co-operative Bank1111401275.93

8Mahindra Finance 91101122.64

9State Bank Of India203881408.79

10Other342152116414.06

TOTAL258211002056455100

MARKET SHARE WITH COMPITITORS FOR 08- 09

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 2007-2008 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.

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.

.

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.

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

Operating Manual.

Annexure, Know Your Customer (KYC)

Business records of branch. Services and observations. Website : www.tatamotorfinance.com

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