FEDERAL BANK LTD

FEDERAL BANK LTD

PROCESS AND PROCEDURE IMPROVEMENT OF CAR LOAN

OBJECTIVE

TO STREAMLINE THE EXISTING PROCESS AND PROCEDURES FOR A CAR LOAN

SCOPE

LIMITED TO CAR LOAN AND THEIR VARIANTS

3 FUNCTIONAL AREAS SALES, CREDIT, OPERATIONS

CONTROL AREAS PRE-LOGIN, LOGIN, POST LOGIN, DOCUMENT VERIFICATION, APPROVALS, PRE-DISBURSEMENT VERIFICATIONS, DISBURSEMENT AND POST DISBURSEMENT.

Car Loan Process

Sales/Business Sourcing

Credit Administration

Operation

Business Sourcing

Credit Sourcing

Internet

Call Center

Car Dealer

Email

Branch

DSA

Credit Administration

Federal Banks Financials

FinancialsValue in Rs CroresTotal Turnover82850PBT1521PAT1005Deposits70824.9Advances51284.9RatiosValueL/D Ratio72%Capital Adequacy Ratio15.46% (9%)

Credit Policy: What is it ?

Credit sanctioning guidelines

The written document that set standards as decided by a bank's senior management

A bank's loan policy also establishes minimum credit standards for taking on loans

It sets policies and procedures in treatment of loans

The type of customer a bank wants as a borrower

Comparative Analysis

Type of LoanFederal BankBank Of IndiaICICI BankHDFC BankNew Car Loan10.90% - 12.25%10.65%10.75% - 12.50%(From 36 - 60 months),12.20% - 14.50%(From 24 - 35 months),12.75% - 15%(Up to 23 months)10.75% - 12.50%Used Car Loan15.45%-15.95%11.45%(Up to 3yrs)13.75% - 17%15.25% - 17.75%(36-60 months),15.75% - 18.25%(12-24 months),Corporate Rates13.50% - 14.25%Processing FeeUp to 5 Lacs - 1500/-Above 5 lacs - 2500/-a)Loans up to Rs.25,000/- one time Rs.1,000/-b)Loans above Rs.25,000/- up to Rs.25 lacs - one time 1% of loan amount - Min.Rs.2,000/- & Max. Rs.10,000/-c)Loans above Rs.25 lacs -one time Max.15,000/-Rs.2500/- to Rs.5000/-Rs 2625/- to Rs. 4950/-

Features

Existing

Enjoy a longer repayment period 60 months

Practical and transparent processing charges

Loan processing cycle of 3-5 days

Ideal

Loan tenure up to 7 years

Federal Bank processing charges is already lowest

Loan processing cycle limited to 48 hours

Deviation Matrix

DeviationSanctioning AuthorityDeviation up to 10% of Sanctioned Amt (up to 5Lakhs)The Bank ManagerDeviation more than 10% of Sanctioned Amt (Up to 5Lakhs)Head (Auto Loans)Deviation up to 10% of Sanctioned Amt (Above 5Lakhs)Head (Auto Loans)Deviation than 10% of Sanctioned Amt (Above 5Lakhs)Head (Personal Loans)Deviation in Repayment termsHead (Personal Loans)

All the different Sourcing processes will be centralized at a HUB for Auto Loans

The HUB will have the discretion for credit underwriting, screening of applicant and disbursement

The HUB and all the processes will be linked through a CRM & ERP system

The CRM will help in TAT and the ERP will be linked to the CRM cutting across geographies to centralize the operations

Eligibility Check will be the First GO/NOGO Gate

All the verifications will be outsourced to third party

Executing of DPN and Completion of PDCs will be shifted before disbursements.

Changes in the process

THANK YOU