thesis 2

Personal Loans Structure in Citifinancial /IIPM, New Delhi

ABSTRACT

The primary objective of the thesis is to provide an insight and thorough description about the personal

loan structure and policies followed in CitiFinancial India in order to achieve a complete picture of the

company’s business policies and methods by which it has grown into one of the most leading players

in the Personal Loans market.

The research methodology includes an exploratory analysis of the different products which are being

marketed by CitiFinancial India and also detailed theoretical explanation of how beneficial the policies

are. It also illustrates the requisites for availing these products.

A proper SWOT analysis has also been conducted to study the effectiveness of the policies and

practices inculcated in the company.

Moreover recommendations have also been suggested as to how CitiFinancial India can develop

further in the near future and meet the new challenges from competitors.

Perceived commercial value of thesis

In terms of commercial value the proposed thesis holds enormous potential. In this day and age of

complex business environments and incredibly challenging and dynamic market conditions, any

insightful information that enables organizations to counter market conditions and come out on top at a

greater frequency than its competitors is valuable. This thesis and the recommendations provided

would thus strive to highlight the benefits and commercial implications of the business model

followed in CitiFinancial India in the personal loans market.

1


SIGNATORY PAGE

To Sumanta SharmaIIPM, New Delhi

Respected Sir,

Herein kindly find the thesis report prepared by Pronit Das, (ID: DEL/MKT/FW06587) on the topic “An analysis of the business model for Personal Loans at CitiFinancial India”. I am hereby confirming my acceptance that the report is fully complete and does not require any further alterations.

Thanking you With regards

Yours sincerely,

Ms. Ritu Baweja District ManagerCitiFinancial India

2


ACKNOWLEDGEMENTS

I express my sincere gratitude to Citifinancial Consumer Finance India Private

Limited for giving me this great opportunity to complete my thesis report with them.

I would like to immensely thank Mr. Amit Anand, Relationship Manager – Gurgaon

District who has constantly helped me in realizing the technicalities and importance of this study with

his constant encouragement and guidance, without which my project would not have reached its

completion.

I would further like to thank Mrs. Ritu Baweja, District Manager – Gurgoan and NCR,

for taking out time from her busy work schedule in pinpointing my mistakes and helping me to correct

these mistakes. I thank her immensely for bestowing in me the values and cultures followed in

Citifinancial. I would also like to thank Mr. Sourav Roy, Assistant Manager – Collections and all

members of Citifinancial, Gurgaon Branch office for being very helpful and making me feel a part of

their own through their valuable support in my endeavor to make this project a success.

3


CONTENTSABSTRACT..............................................................................................................................................- 1 -

Perceived commercial value of thesis.................................................................................................- 1 -SIGNATORY PAGE...............................................................................................................................- 2 -ACKNOWLEDGEMENTS.....................................................................................................................- 3 -CONTENTS..............................................................................................................................................- 4 -LIST OF TABLES...................................................................................................................................- 6 -RESEARCH METHODOLOGY...........................................................................................................- 7 -

Primary Research:...............................................................................................................................- 7 -Secondary Research:............................................................................................................................- 7 -

EXECUTIVE SUMMARY......................................................................................................................- 8 -INTRODUCTION....................................................................................................................................- 9 -OBJECTIVES........................................................................................................................................- 11 -CURRENT STATUS OF PERSONAL LOANS.................................................................................- 12 -MARKET ANALYIS (DETAILED)....................................................................................................- 13 -PRODUCT DESCRIPTION & SPECIFICATIONS..........................................................................- 15 -

NEW BORROWER PROGRAM :..................................................................................................- 15 - Product Description :.............................................................................................................- 15 - Eligibility Criteria for New Borrowers:...............................................................................- 16 -

NEW BORROWER – SURROGATE INCOME PROGRAMS...................................................- 18 -Eligibility Criteria:.........................................................................................................................- 18 -

PL PLUS PROGRAM...........................................................................................................................- 22 -EXISITNG BORROWER:................................................................................................................- 25 -QUALIFYING GRID:.......................................................................................................................- 26 -

Change in TW Existing Borrower Conversion to PL based on Credit Scoring:.............................- 28 -Policy change......................................................................................................................................- 28 -Test program......................................................................................................................................- 28 -

Existing Borrower Qualifying Grid for a PL to PL Top up based on Credit Scoring....................- 28 -This grid is applicable for lending to all active, non delinquent PL to PL top up accounts:. .- 28 -

TEST PROGRAM – PL GOLD...........................................................................................................- 30 -CITIFINANCIAL EMPLOYEE LOAN POLICY – PERSONAL LOANS.....................................- 33 -

DOCUMENTATION REQUIRED:.................................................................................................- 35 -ACCEPTABILITY CRITERIA FOR INCOME PROOF DOCUMENTS......................................- 40 -ACCEPTABILITY CRITERIA FOR IDENTITY PROOF DOCUMENTS...................................- 42 -

Non standard documentation required............................................................................................- 43 -TRANSACTION PROCESS.................................................................................................................- 44 -

EXISTING BORROWER.................................................................................................................- 46 -CUSTOMER INTERVIEW & BUDGET ANALYSIS – AN OVERVIEW.....................................- 46 -

Customer interview process................................................................................................................- 47 -Purpose............................................................................................................................................- 47 -

MARKETING TECHNIQUES............................................................................................................- 48 -1. Press ads –.......................................................................................................................................- 48 -2. Outdoor Media –............................................................................................................................- 48 -3. Micro marketing –.........................................................................................................................- 49 -4. SMS –..............................................................................................................................................- 49 -5. Mobi-loans –...................................................................................................................................- 49 -6. Referral channel –..........................................................................................................................- 49 -7. E-Marketing –................................................................................................................................- 49 -8. CitiFinancial Money Man –..........................................................................................................- 49 -I-SELL – DATABASE AND DUMPS..................................................................................................- 50 -

4


BENEFITS OF I-SELL:....................................................................................................................- 50 -TARGET FORECASTING MECHANISM........................................................................................- 51 -ORGANISATION & MANAGEMENT..............................................................................................- 52 -

HR MISSION:....................................................................................................................................- 52 -HR POLICIES:..................................................................................................................................- 52 -HR STRATEGY:...............................................................................................................................- 53 -

RECRUITMENT AND STAFFING....................................................................................................- 54 - INTERNAL STAFFING :...........................................................................................................- 54 - EXTERNAL RECRUITMENT:..................................................................................................- 54 -

SELECTION PROCESS:......................................................................................................................- 55 -CONFIRMATION PROCESS:............................................................................................................- 56 -

Objective:.............................................................................................................................................- 56 -Process:................................................................................................................................................- 56 -

PERFORMANCE MANAGEMENT PROCESS:..............................................................................- 57 -CAREER PATH.................................................................................................................................- 58 -EMPLOYEE REWARDS:................................................................................................................- 59 -

FINDINGS & ANALYSIS.....................................................................................................................- 60 -STRENGTHS:....................................................................................................................................- 60 -WEAKNESSES:.................................................................................................................................- 62 -OPPURTUNITIES:...........................................................................................................................- 64 -THREATS:.........................................................................................................................................- 64 -

RECOMMENDATIONS:.....................................................................................................................- 65 -BIBLIOGRAPHY..................................................................................................................................- 66 -APPENDICES........................................................................................................................................- 67 -ANNEXURE I – LIST OF FINANCIERS APPROVED FOR SURROGATE INCOME PROOF - 67 -ANNEXURE II- LIST OF CREDIT CARD APPROVED FOR SURROGATE INCOME PROOF. .- 68 -ANNEXURE III – RESTRICTED CUSTOMER PROFILES..........................................................- 68 -

5


LIST OF TABLES

1. Current status of Personal Loans

2. Market Analysis (Detailed)

3. New Borrower Program :

- Product Description- Eligibility Criteria

4. New Borrower Surrogate Income Programs :

- Eligibility Criteria

5. PL Plus Programs:

- New Borrower - Existing Borrower

- Qualifying Grid6. Change in Two Wheeler Existing Borrower7. Conversion to PL Based on Credit Scoring 8. PL Gold9. CitiFinancial Employee Loan Policy-Personal Loans

- Documentation required

10. Acceptability criteria for income proof documents11. Acceptability criteria for identity proof documents

- Non Standard Documentation12. Transaction Process:

- New Borrower- Existing Borrower

13. Customer Interview & Budget Analysis14. HR Strategy15. Recruitment & Staffing16. Selection Process17. Performance Management Process18. Career Path19. Employee Rewards

6


RESEARCH METHODOLOGY

The research methodology deals with the collection of information from various sources including my

personal perspectives in order to provide an overall depiction of the policies and methods inculcated in

the Personal Loans model in CitiFinancial India. Moreover it will also discuss about the various kinds

of products provided by CitiFinancial India to its customers and how the customers are benefited by

these.

Primary Research:

By conducting interviews with key employees in the organization

Training session & discussions

By utilizing existing experience & knowledge about the product

Secondary Research:

By consulting the credit policy manual of CitiFinancial India

External websites

7


EXECUTIVE SUMMARY

Personal Loans have become quintessential to the urban working mass to chase their

dreams for a better living standard in today’s world. Personal Loans thus constitute the majority

market share in the overall credit portfolio of Indian banks. A study conducted by ASSOCHAM Eco

Pulse (AEP) has concluded that by the end of the next year the personal loans market will receive a

huge boom and will occupy almost one-third of the total credit allocation of the country.

The availability of easy and cheap finance options shared with the rising purchasing

power of professionals has resulted in this upsurge for loans. However before being convinced about

the benefits a study has to be conducted about the transparency and clarity regarding the repayment

options provided by the banks.

The Indian small ticket size market is being dominated by Citifinancial as a leader and

GE Countrywide as second in line. The huge profits from higher ROI and greater market segment for

SEC B & C has attracted more players – ICICI, HDFC, Prime Financial and India bulls. Citifinancial

follows a very simple yet very effective revenue generating model in personal loans business.

Moreover their business model has also intertwined Consumer Durable loan (CD)and Two Wheeler

Loan (TW) along with Personal Loan (PL) so that cross sell between the products is possible. This in

turn helps the company to generate more revenue and also in creating a huge customer database upon

which regular follow-ups are made. Citifinancial also generates revenue from Banc assurance services

by selling Life Insurance policies of Tata AIG.

8


INTRODUCTION

Founded by Alexander Duncan as Commercial Credit in 1912, the company was a

pioneer in the consumer finance industry. In 1916, it offered an installment loan program to help

people purchase what was then an exciting new invention - the automobile. That led to the

development of installment buying plans for home appliances and other consumer goods. In the next

decades, the firm acquired a major credit insurer and a casualty insurance company. In 1944,

Citifinancial organized an insurance unit that later became American Health & Life Insurance

Company. In 1968, Commercial Credit became a wholly owned subsidiary of Control Data

Corporation.

Wall Street legend Sanford I. Weill assumed control of the operations of Commercial

Credit in 1986 and took the company public. Within two years, the company acquired Primerica

Corporation, the parent company of several investment, financial services and insurance firms,

including the well-known Smith Barney.

In 1992, Primerica purchased 27% of Travelers Insurance, a company with one of the

most recognizable logos in the U.S. - the red umbrella. Less than a year later, Primerica purchased the

remaining 73% of Travelers, which later adopted the name Travelers Group. In subsequent years,

Travelers Group acquired Shearson-Lehman's retail brokerage, Aetna's property and casualty business,

Security Pacific Financial Services, and Salomon Brothers, creating the nation's third largest

investment house - Salomon Smith Barney.

In 1998, Travelers Group merged with banking powerhouse Citicorp to create

Citigroup, a global financial services company serving 20 million customers worldwide.

Citigroup's businesses include asset management, banking, credit and charge cards,

insurance, investments, investment banking and trading.

In 1999, Citigroup purchased 128 offices of Texas-based Associates First Capital,

giving it more than 2,000 offices in 45 states. The company then turned its focus to Canada, buying

Associates First Capital offices there.

9


In September, Associates First Capital changed its name to CitiFinancial® and proudly

recognized the affiliation with parent company and to better reflect what the company does today. As a

member of Citigroup, Citifinancial continues to provide customers with a full range of exceptional

products and services to help them to find the right financial solution.

Citigroup is the world's most global financial services company whose other subsidiaries

include Citibank, Travelers Life and Annuity, Smith Barney and Primerica.

In November of 2000, Citigroup acquired Associates First Capital Corporation; the

largest publicly traded finance company in the U.S. with managed assets of more than $100 billion and

2,750 offices in the U.S. and 13 other countries. The Associates has a particularly strong presence in

Japan and in Europe, where it has more than 700,000 customers. This transaction marked a defining

moment in Citigroup's history, building upon its leadership position in the global economy.

At the end of 2001, Citigroup announced its plans to spin off its wholly owned

subsidiary Travelers Property Casualty Corporation by selling up to 20% in an initial public offering

and spinning off its remaining majority interest on a pro-rata basis to Citigroup shareholders in a tax-

free transaction. The initial public offering took place in the first quarter of 2002, with the spin-off

concluded at year-end 2002. Citigroup units will continue to offer Travelers Property Casualty

products. The spin-off enables Citigroup to focus its resources more fully on higher growth areas of

global financial services and, at the same time, positions Travelers Property Casualty as an

independent public company.

In the third quarter of 2001, Citigroup purchased Mexico's "Banacci" (Grupo Financiero

Banamex-Accival), renamed it Grupo Financiero Banamex and integrated operations in Mexico under

the Banamex brand name. It is the largest foreign acquisition in Mexico and largest financial sector

deal ever in Latin America. In the third quarter of 2002, Citigroup completes the acquisition of Golden

State Bancorp, parent company of First Nationwide Mortgage and Cal Fed, second-largest U.S. thrift.

The transaction enabled Citibank to expand its retail distribution franchise in key California and

Nevada markets and add approximately 1.5 million new customers.

In the first quarter of 2004, Citigroup announced the acquisition of Washington Mutual

Finance Corporation for $1.25B. The acquisition included 409 WMF offices located in 25 states,

primarily in the Southeastern and Southwestern United States. The company has more than 2,300

employees and total assets of approximately $4 billion, as of September 30, 2003. "This transaction,

which solidifies CitiFinancial's position as the leading community-based lender in the U.S.,

exemplifies how we are focusing our proven acquisition capabilities on incremental acquisitions that 10


expand the reach of our businesses both geographically and strategically," said Bob Willumstad,

Citigroup President and Chief Operating Officer.

The Indian middle class, which constitutes a large market, has doubled over the last

decade and is set to multiply in the coming years. The Citifinancial target market falls in this category

and the company is already catering to finance requirements for consumer durables, two wheelers and

automobiles to this segment. We have a customer base of over 200000 customers of which 25%

customers have more than a year’s credit history with Citifinancial. We are now targeting our

consumer durable and two wheeler customers for providing them with Personal loans with an

objective to retain performing customers build loyalty and create lasting relationships.

The middle class salaried individual segment and the small business segment have also

shown an appetite for small ticket loans to meet personal needs, debt consolidation and short-term

capital needs for business. Citifinancial has sought to address these financing needs by launching a

personal loan program for individuals who have no prior financing relationship with us. This is

referred to as the new borrower program.

The existing players in the market are ICICI, Citibank, ABN Amro Bank, Standard Chartered

Bank, American Express and GE Countrywide. In the last one year hectic activity to promote the

product has been visible in the market. Our focus on strengthening bonds with existing customers,

geographical reach and relationship-based approach will provide as a unique competitive advantage.

OBJECTIVES

To determine the modus operandi of Personal loans in Citifinancial

To judge the reliability of the policies of the company

To ascertain the weaknesses and suggest suitable recommendations

11


CURRENT STATUS OF PERSONAL LOANS

The personal loans small ticket size market in India is governed by many key players on date. All these companies have followed almost similar schemes and have achieved a portion of the whole market share. A comparison sheet of Citifinancial, GE Countrywide, India bulls, HDFC and ICICI is as follows:

Parameters CitiFinancial

GE Countrywide

India bulls

HDFC

ICICI

Target Market

Salaried & selfemployed


Salaried Salaried & selfemployed

Salaried & Self employed

Occupation Salaried & selfEmployed




Income Rs.40000pa Rs.40000 pa Rs.30000 pa

Rs.40000pa

Rs.36000pa

Age 21-65 yrs 21-65 yrs 21-60yrs 21-58yrs 21-58(salaried)21-65 (self Employed)

Residence Stability

1 yr (rented)6 months (owned)

1 yr 1yr 1yr 1yr

Employment Stability

1yr 1yr 1yr 2yrs 2yrs

Loan amount

10-50k 10k-75k 5-7.5 times Salary

10k-75k 20k-50k

Tenure 12-48months

12-48months 12-72months

12-48months

12-48months

Top Up After 9 months

After 6 months

After 5 months

After 8 months

NA

Insurance Tie with TATA AIG

Tie with SBI Life

Tie with BirlaSun Life

NA NA

Repayment Mode

Through ECS & PDC

Through PDC Only

Through ECS & PDC

Through ECS &PDC

Through PDC (1st time)

12


Through ECS (2ND time)

MARKET ANALYIS (DETAILED)

Parameters Citifinancial GE Countrywide

India bulls

HDFC ICICI

Target Market




Salaried & self employed

Occupation Salaried & selfemployed



Salaried &selfemployed

Income Rs.40000pa Rs.40000 pa Rs.30000 pa

Rs.40000pa

Rs.36000pa

Age 21-65 yrs 21-65 yrs 21-60yrs 21-58yrs 21-58(salaried)21-65 (selfEmployed)

ResidenceStability

1 yr (rented)6 months (owned)

1 yr 1yr 1yr 1yr

EmploymentStability

1yr 1yr 1yr 2yrs 2yrs

Loan amount

10k-50k 10k-75k 5-7.5 timessalary

10k-75k 20k-50k

Tenure 12-48months 12-48months 12-72months 12-48months

12-48months

Top Up After 9 months After 6 months After5 months

After 8 months

NA

Insurance Tie with TATAAIG

Tie with SBILife

Tie with BirlaSun Life

NA NA

Repayment Mode

Through ECS &PDC

Through PDCOnly

Through ECS& PDC

Through ECS &PDC

Through PDC(1st time)Through ECS(2ND time)

Documents Income, residenceIdentity proofBank statement

Income,residenceIdentity proofBank statement




Interest rate

1.5-3% pm 1.5-3.2%pm 1.49-1.99%pm

1.4-3.2%pm

1.8-2%pm

Processing fees

2-5% 2-5% 5-7.5% 2-5% 2-5%

13


ForeclosureCharges

4% 4% None 4% 4%

TAT 3-4days 4-5days 5-7days 7days 7-10 daysCredit Decentralized Centralized Centralized Centralized Centraliz

edCustomer visits

For interview andFor chequecollection

For interview andFor chequecollection

Only forChequeCollectionInterview doneOn phone



Verification

Cpv and TVR CPV and TVR CPV and TVR

CPV and TVR

CPV,TVR andBank statementVerification

No. of branches

19(NCR)270 (India)

10(NCR)100(India)

6 (NCR)20(India)

2 express loan(NCR)8 express loan(India)

Through CPBranchVideoconTower

Marketing

Maximum Limited Limited Limited Well visible

-Mobile vans-Money man-Road shows-SMS-Online ads-ReferencePrograms-Women’sreferenceProgramme

-Canopies-ad in DTC Bus-Pop out InCable tv-referenceprograms

People 9-10 7-10 5-10 7-10 7-10

From the above detailed comparison it is clearly visible that all these companies are primarily

functioning on the same market segment and also following almost similar business models.

Citifinancial caters to customers of SEC A, B and C category in the society although their

focus is mostly on SEC C category as these people are more reluctant on small ticket size loans.

The loan amount varies for customers from different strata of society accordingly. Age

limit followed by Citifinancial is again similar to the other companies as well.

The residence stability of Citifinancial is somewhat different as most companies avoid

rented accommodation but Citifinancial provides loans on basis of 6 months of rented accommodation.

The loan amount that is offered to a new customer (NB Customer) usually ranges from Rs.

15k-30k. The loan amount is kept small as the customers are provided a top up( ie, a fresh loan ) after 14


9 months with the new loan amount being 1.5-2 times greater than the previous finance amount. In

such a situation the ROI (rate of interest) of the customer is also lowered according to his performance

on the existing loan.

The TAT (Turn around Time) in Citifinancial is remarkably less compared to the other

existing companies. In Citifinancial a loan is processed and the disbursal cheque is printed within a

time gap of 3 days were by others take a time of 4-5 days.

Citifinancial also follows a complete decentralized model for its loans businesses were

by its agencies and branches are spread over different parts of the country. Communications between

these two are established by e-mail, telephone or with the help of Windows Messenger Service.

Moreover the number of visits that the customer has to make to the branch is minimal.

Citifinancial possesses various outsourced agencies that perform the work of verifications.

The marketing aspect is undertaken mostly by the respective branches and sometimes

various new concepts of marketing are launched which are organized centrally. Citifinancial gives a

lot of weight age on the marketing factor as they believe in maximum product visibility in the market

and brand recall. For this purpose frequent road shows, Outdoor distribution of leaflets, SMS,

reference programs etc. are undertaken.

PRODUCT DESCRIPTION & SPECIFICATIONS

NEW BORROWER PROGRAM :

Product Description :

S. no. Parameters Details

1 Target Salaried Individuals, Self employed Professionals, and Self

15


Market employed businessmen

2 Locations All pre-approved areas and others which may be approved in

future

3 Minimum

Loan Amount

Rs. 10,000

4 Maximum

Loan Amount

Rs. 50,000 (communicated to customers) Rs. 2,00,000( as per

product programme)

5 Minimum

Tenor

12 months

6 Maximum

Tenor

48 months

7 Sources of

Acquisition

Branch walk-ins, Direct selling agencies, Direct mailing, Cross

sell/ marketing programmes, FOS(Feet on Street), Tele calling

8 Restricted

Profiles

As Per defined by company and any other profiles defined by

location ( Refer to Annexure III )

9 Restricted

Areas

Restricted area list is based on collections and market research

feedback and reviewed from time to time

10 Interest Rate Loans are provided on the grid provided which is revised based

on business requirements and approved from Business Head.

11 Fee Typically 2% of the loan amount and as decided by Branch

Manager

12 Other

Charges

Cheque Swap charges – Rs. 500

Prepayment charges – 4%

Cheque returned charges – Rs. 200 per instrument bounce

Penal charges – Rs. 250

( Service Tax applicable on all)

13 Credit

Approvals

Credit Decision to be based on the Citifinancial Underwriting

Standards. All approvals to be signed off by officer having

requisite authority as per credit delegation matrix

16


14 Repayments Through Post Dated cheques to be collected at the time of

disbursal of loan payable on the 5th of every month

Through ECS ( Electronic Clearing Scheme )

Through SI ( Citibank Suvidha Customers )

15 Targeted IRR As decided by management within the product programme

approval. ROI rate for new borrowers cannot be less than 40%

16 Collateral None. Citifinancial recourse will be based on the loan agreement

and the PDC/ECS mandate signed by the customer

Eligibility Criteria for New Borrowers :

S.No. Parameters Details

1 Minimum

Age

21 yrs

2 Maximum

Age

65 yrs

3 Income Rs. 40,000/- per annum

For surrogate income proof, no income proof required till loan

amount Rs. 50,000

4 Bank

Statements

3 months from date of application

5 Current

Employment

At least 1 year continuity in same business/job

6 Residence

Stability

1 year for rented accommodation

6 months for self owned/parental/company provided

17


accommodation

7 Telephone

Requirement

(direct

contact

ability)

A t least one direct line at residence or office

( Ref to Annexure IV)

8 CPV office Mandatory for self employed only

9 Cpv

Residence

Mandatory for all cases

10 Telephone

Verification

Mandatory for the applicant & one more reference

11 De-

duplication

check

De-duplication check on Citifinancial database, Citibank

Negative database and watch list customers ( SDN & RBI

watch list)

12 References Two references mandatory. Can be friends/relatives/colleagues

in the same city

13 Personal

Discussion

Mandatory for all cases. Refer to section on interviews

14 Budget

Analysis

Mandatory. Refer to section on budget analysis

15 Repayment

Track

N.A.( Required for surrogate income proof program)

16 Loan EMI

Eligibility

Maximum EMI cannot exceed 70% of the Debt Burden cap for

all untested new borrowers. For surrogate customers, the

maximum EMI is defined by the surrogate till loan amount Rs.

50,000. Debt Burden capped at 70% for all loan amounts

greater than Rs.50,000

17 Debt Burden Capped at 70% of applicant’s gross disposable verifiable

income. Not applicable till Rs. 50,000 for surrogate income

customers

18 Current

residence

address proof

Mandatory

19 Income proof Mandatory. Can be standard or surrogate depending on the

18


program

20 Identity proof Mandatory

21 Corporate

lending

N.A.

22 Guarantor N.A.

NOTE:

1. List of acceptable financiers - Refer to Annexure I

2. List of acceptable credit card - Refer to Annexure II

3. List of restricted profiles - Refer to annexure III

NEW BORROWER – SURROGATE INCOME PROGRAMS

Eligibility Criteria:

S.no. Parameters Freedom Loan

1 Target Market Individuals who have a repayment track with

any other bank or financial institution.

The loan must be running or not closed before

6months from the date of application.

Loan should be with an acceptable financier as

per Annexure I

2 Income Proof NA till loan amount Rs. 50,000 as last 6 months

repayment track with another bank or financial

institution is taken as surrogate income proof.

Valid income proof required for all loan amounts

greater than Rs 50,000

3 Bank Statements Last 3 months bank statements required.

Last 6 months bank statements required if used

as repayment track to see clearance of 6 emi’s

4 Repayment track Minimum 6 months as evident by bank

statements or Statement of account from

previous financier

19


Loan should be running or not closed earlier

than 6 months from date of application

There should be no emi bounce in last 3 months

of performance

Loan to be current at the time of loan application

PDC and ECS based repayment to be considered

5 Maximum loan amount Rs. 50,000

6 Loan emi eligibility Maximum emi capped at 150% of the emi of

track loan till loan amount Rs. 50,000

7 Debt Burden Not applicable till loan amount less than equal to

Rs. 50,000 where the emi and loan amount is

calculated as per the surrogate

For all loan amounts greater than Rs. 50,000

debt burden capped at 70% of the monthly

verifiable income

S.no. Parameters Mobile Phone Subscribers

1 Target Market All individuals with postpaid mobile from a

known service provider

2 Income NA till loan amount Rs. 50,000 as minimum

monthly average billing for the last 3 months of

Rs. 800/- is taken as surrogate income proof

Valid income proof required for all loan amounts

greater than Rs. 50,000

3 Repayment Track Minimum 3 months billing statements with an

average monthly billing of Rs. 800/-

Monthly billing also should be greater than equal

to Rs. 800

No arrears, late payments and overdue payments

4 Additional documentation Latest 3 months mobile bills in applicant’s name

5 Maximum loan amount Rs. 50,000

6 Loan emi eligibility Max emi can be 300% of the average billing

20


amount of last 3 months till loan amount of

Rs.50, 000. Emi offered is subject to Budget

Analysis.

7 Debt Burden Not applicable till loan amount less than equal to

Rs. 50,000 where the emi and loan amount is

calculated as per the surrogate. For all loan

amounts greater than Rs. 50,000, debt burden

capped at 70% of the monthly verifiable income

S.no. Parameters Suvidha Cross Sell

1 Target Market Salaried and self employed individuals holding

Citibank Suvidha account

Salaried: 3 salary credits in Citibank Suvidha a\c

& a minimum net salary credit of Rs. 3500/- pm

Self- employed: monthly average balance of Rs.

3500 for the last 6 months

2 Income 3 months salary credits in Suvidha a/c with

minimum salary credit of Rs. 3500. Self-

employed: Monthly average balance of Rs.3500/-

for the last 6 months

3 Repayment Track Salaried: 3 month salary credit in a/c with

minimum salary credit of Rs. 3500 pm. In Self –

employed: No bounce in last 6 months and

monthly average balance of Rs. 3500/- in the last

6 months

4 Maximum Loan amount Rs. 50,000

5 Loan emi eligibility Salaried: Last 3 months Citibank Suvidha bank

statements with the monthly salary credit of not

less than Rs. 3500 for last 3 months. Debt burden

capped at 70%.

Self employed: Last 6 months Citibank Suvidha

bank statements with monthly average balance

of not less than Rs.3500. Debt burden capped at

21


70%

6 Debt Burden Salaried: Debt burden capped at 70% of the

monthly salary credit

Self employed: debt burden capped at 70% of

the average monthly balance

S.no. Parameters Debt Consolidation

1 Target Market Individuals who hold a Classic or Gold card or

its variants & the card must have been in

existence for greater than equal to six months

2 Income Last 2 months credit card statements is taken as

surrogate till loan amount Rs. 50,000

3 Bank statements Last 4 months bank statements required out of

which at least 3 credit card payments are seen

4 Repayment Track Credit card to be in existence for a minimum of

6 months

Expiry on the card to be greater than 3 months

from the date of application. last 2 months

statements to be analyzed

5 Maximum loan amount INR 30,000 on Classic card where disbursal is

made to the customer alone

INR 50,000 on Classic card where disbursal is

made in two parts: One towards the balance

outstanding on the credit card and remaining

cash out to the customer

6 Loan EMI EMI can be 50% of the Imputed Monthly

income till loan amount Rs. 50,000 subject to

Budget analysis

Imputed monthly income is calculated as Card

Credit line /3

EMI can be 70% of the Verifiable monthly

income for loan amounts greater than Rs.

50,000

7 Debt Burden Maximum emi can be 50% of the imputed

22


income till loan amount less than equal to Rs.

50,000

For all loan amounts greater than Rs. 50,000

debt burden capped at 70% of the monthly

verifiable income

PL PLUS PROGRAM

S.no. Attribute Description

1 Target Market Salaried individuals in Cat A and Cat B

companies

Self employed high net worth individuals

Individuals with the following surrogates:

12 MOB track on Auto loan

b. Gold card holder with a limit > Rs. 1,00,000

c. CD loan track with Citifinancial for 8 MOB

where the loan amount is greater

Than Rs. 30,000 and emi of at least Rs. 2000

d. PL track of minimum loan 12 MOB with

another finance company where minimum loan

amount is Rs. 75,000 and emi Rs. 3,500

e. At least 9 MOB repayment track on housing

loan with other finance company

2 Locations All existing Citifinancial locations

New locations less than 6 months old not

eligible

3 Minimum loan amount Rs. 65,000 ( New Borrowers )

Rs. 75,000 ( Existing Borrowers )

4 Maximum loan amount Rs. 2,00,000

5 Minimum Tenor 12 months

6 Maximum Tenor 48 months

7 Sources of acquisition Branch walk ins

Direct mailing

23


Tele-calling agencies

DSA

DST

8 Restricted Profiles As per list defined and any other profiles as

defined by the location

9 Restricted areas As per the personal loan product program

10 Other charges As per personal loan product program

11 Credit Approvals Same as Personal Loan Product Program

All credit approvals to be done at the branch till

loan amount Rs. 15,000/- . Post which the case

is referred to Central\Regional credit office

12 Repayments Through PDC to be collected at the time of

disbursal of loan payable on the 5th of the

month

ECS

13 Pricing As decided by the management subject to RAC

rate as defined in the Product program

14 Collateral None

Citifinancial recourse will be based on the loan

agreement and the PDC’s signed by the

customer

15 Age Minimum- 21 years

Maximum- 65 years ( on loan maturity )

16 Bank statements 3 months from date of application for New and

existing customers

17 Current employment Minimum 1 year continuity in the current job /

business for both new and existing

18 Residence stability For both existing and new borrowers


6 months for self/owned/ parental/ co. provided

19 Telephone Requirement

( landline)

At least 1 fixed landline/ WLL at residence or

office

20 CPV office Mandatory for all self employed new

borrowers. In existing customer where the

24


previous loan was a consumer, two wheeler. In

existing customer, where the previous loan was

foreclosed/ closed 6 months prior to the new

loan application. In existing borrower change

in address from previous loan is required.

21 CPV residence Mandatory for all new borrowers

Mandatory for existing customer cases where

The previous loan is a consumer durable loan

Loan amount greater than Rs. 1 lac

Was foreclosed earlier than 6 months from the

date of application

Change in address from previous loan

22 Telephone verification Mandatory for all cases

Reference TVR to be done in all new borrower

cases

23 Deduplication check Deduplication check on Citifinancial database,

Citibank negative database and watch list

customers ( SDN & RBI watch list )

24 References N.A. in existing borrowers

Two references mandatory can be

friends/colleagues/relatives in same city, for all

new borrowers

25 Budget analysis Mandatory for all cases

26 Loan eligibility Between Rs. 65,000 for new and Rs. 75,000 for

existing & Rs. 2, 00,000 as per budget analysis.

Debt ratio capped at 70%

27 Debt burden Debt burden capped at 70% on the basis of

latest Income proof

28 Original All documents in original to be verified by a

Citifinancial financier

29 Top ups 9 MOB for all amounts less than equal to Rs.

1,00,000

12 MOB for all loan amounts greater than

Rs.1,00,000

25


30 Guarantor N.A.

EXISITNG BORROWER:

S. no. Parameters Product details

1 Target Market Existing Citifinancial customers with

performance of:

4 months in CD, TW, 9 months in PL

2 Locations All approved locations and those which might

be approved by management in future

3 Minimum loan amount Rs. 10,000

4 Maximum loan amount Rs. 1,00,000

Rs. 2,00,000

5 Minimum tenor 12 months

6 Maximum tenor 48 months

7 Sources of acquisition N.A.

8 Restricted Profiles N.A.

9 Restricted Areas N.A.

10 Interest rate/ IRR Loans to be extended based on the grid

provided which will be revised/ reprised based

on business requirements and approved by the

business head.

11 Fee Typically 2% of the loan amount

12 Other charges Cheque swap charges - rs.500

Prepayment charges – 4%

Cheque returned charges – rs. 200 per bounce

13 Credit approvals As per the existing borrower qualifying grid.

All approvals to be signed off by officer having

requisite authority as per credit delegation

matrix

14 Repayments Through post dated cheque to be collected at

the time of disbursal of the loan payable on

the 5th of month

15 Collateral None.

26


QUALIFYING GRID:

The finance amount an existing customer is eligible for is worked-out based on the above grid:

o There should be no EMI bounces in the last 3 months and the account has to be current

as on date

o Never beyond bucket 2 ( 60 dpd)

o Write off cases with write off amount greater than Rs.500

o Accounts beyond bucket 2 are not eligible

Existing borrower grid OLD LOANCD/TW PL

N

E

W

L

O

A

N

P

E

R

S

O

N

A

L

L

O

A

N

Performance(min. months)

4 months 9 months

M

A

X

E

M

Income Proof

ACTIVE

50% of monthly income or 150% of EMI ( whichever is greater) LESS current EMI( applicable till rs.50,000 )

50% of monthly income or 150% of EMI ( whichever is greater) LESS current EMI( applicable till rs.50,000 )

Income Proof

CLOSED/ FORE

CLOSED

50% of monthly income OR 150% of EMI ( whichever is greater ) till Rs. 50,000

50% of monthly income OR 150% of EMI ( whichever is greater ) till Rs. 50,000

No incomeProofACTIVE

150% of EMI LESS current EMI. Till Rs. 50,000

150% of EMI LESS current EMI.Till Rs. 50,000

No income proof CLOSED/ FORECLOSED

150% of EMI ( applicable till Rs. 50,000 )

150% of EMI ( applicable till Rs. 50,000 )

27


M

A

X

A

M

T

Loan <= 12,000 – 350% of previous finance amount OR Rs. 60,000 ( whichever is lesser )

Loan >12,000 – 300% of previous finance amount OR Rs. 60,000 ( whichever is lesser )

Foreclosed after 6 months/ net disbursal after 9 months – 150% of previous finance amount OR Rs. 1,50,000 ( whichever is lesser )

Performance of 9 months – 75% of previous finance amount OR Rs. 1,50,000 ( whichever is lesser )

NOTE: Existing customers who do not fall under the pre-approved criteria mentioned above are

referred for decision to the Credit Unit for a revised look at the case.

Debt burden capped at 70% for all loan amounts greater than Rs.50, 000 which

means a valid income proof document is required.

Any finance amount deviation from the grid needs to be signed off by credit officer

Budget analysis is mandatory for all loan amounts greater than Rs.50000

Any EMI deviation beyond 150% the previous emi ( where income proof is not available )

or 70% of the Debt Burden is a credit policy deviation which has to be signed off by Credit and

risk Director

Applicants who have foreclosed the sales finance loan post 4MOB of performance and PL

post 6 MOB of performance only and the loans are not closed earlier than 6 months from the

new loan application are eligible for PL under EB grid

28


Change in TW Existing Borrower Conversion to PL based on Credit Scoring:

Policy change

The maximum permissible EMI for the converted PL has been increased to 75%

of the TW loan in case of a parallel PL (current policy caps this emi at 50% of the TW loan)

for the low risk TW accounts only.

Test program

Increase maximum permissible emi of the converted PL to 100% of the TW emi from 75% of the

TW emi in case of a parallel loan. This is applicable also to low risk TW customers.

Existing Borrower Qualifying Grid for a PL to PL Top up based on Credit Scoring

This grid is applicable for lending to all active, non delinquent PL to PL top up accounts:

Score

band

display

Interpretation Top up loan

amount

eligibility

( >=9 MOB )

Eligibility

( <=50k )

EMI

Eligibility

(>50k

Loan)

Top up Loan

IRR %

30000 Low risk

active PL

account

175% of

existing loan

amount with

ND

Higher of

150% of

existing

EMI or

50% of

verifiable

income

70%

verifiable

income

40% average (

as per current

schemes )

3000 Medium risk

active PL

account

160% of

existing loan

amount with

ND

Higher of

150% of

existing

emi or

50% of

verifiable

income

70%

verifiable

income

40% average (

as per current

schemes )

300 Medium/ High 150% of Higher of 70% 40% average (

29


Risk active PL existing loan

amount with

ND

150% of

existing

emi or

50% of

verifiable

income

verifiable

income

as per current

schemes )

30 Bank

statements

3 months

from date of

application

for all loan

amounts

greater than

Rs.50, 000

where track

is less than 6

MOB. For

track > 6

MOB loan

amount

exceeds Rs.

1,00,000

Not

required

till loan

amount Rs.

50,000.

Last 3

months

bank

statements

mandatory

for all loan

amounts

greater

than Rs.

50,000.

31 Corporate

lending

N.A.

32 Guarantor N.A.

33 Deviations As per the personal loan deviation matrix

30


TEST PROGRAM – PL GOLD

S.NO. Attribute Description

1 Target market

Existing borrower (as per the EB Grid.

Eligibility criteria - EMI can be max. 70% of

the verifiable income; loan amount can be

150% of the previous amount. Previous loan

to be closed. Income proof cannot be less

than Rs. 125000)

New borrowers high net worth professionals

salaried and self employed individuals

2 Locations

All existing locations of Citifinancial where

Citibank does not operate

All existing locations of Citifinancial with

low delinquencies and losses

3 Minimum loan amount Rs. 200000

4 Maximum loan amount Rs.400000

5 Minimum tenor 12 months

6 Maximum tenor 48 months

7 Sources of acquisition

Branch walk in’s

Direct mailing

Tele-calling agencies

Existing data base

8 Restricted profilesAs per list defined and any other profiles as

defined by the location

9 Restricted areas As per personal loan product program

10 Repayments

Through post dated cheques to be collected at

the time of disbursal of loan payable on the

5th of the month

ECS

11 Targeted IRR Minimum 21%

31


12 Collateral

None

Citifinancial recourse will be based n the

loan agreement and the PDC’s signed by the

customer

13 Income Minimum Rs 125000

14 Bank statements 6 months from date of application for new

customer and existing borrowers

15 Current employment At least 2 years in current job salaried

At least 3years in business for self employed

16 Residence stability


6 months for self owned/parental/co.

provided

Not applicable for existing customers

17Telephone requirement

(landline)

On phone line mandatory at residence and

office both

At least 1 connection has to be landline

connection

18 CPV office

New borrowers:

mandatory for all self employed new

borrowers

mandatory for all salaried new borrowers

except where individual is working for

government/renowned public limited

company and MNC

Existing borrowers:

Office Cpv is required for existing borrower

only if the previous loan is a no Cpv loan

was foreclosed earlier than 6 months from

the date of application change in address

from previous loan

no verification conducted in last 12 months

19 CPV residence Mandatory for all new borrower cases

and existing customer cases

Where the previous loan is a no Cpv loan

32


Was foreclosed earlier than 6 months from

the date of application change in

address from previous loan. No verification

conducted in last 12 months

20 De-duplication check

De-duplication check on CitiFinancial

database, Citibank negative database and

watch list customers ( Specially designated

nationals & RBI watch list )

21 ReferencesTwo references are mandatory. Can be

friends/colleagues/relatives in the same city

22 Personal discussion Mandatory for all cases by branch

23 Budget analysis Mandatory

24Repayment track( existing

borrower of CitiFinancial)

Minimum 9 MOB performance on a PL

loan, minimum 4 MOB on a sales finance

loan

25 Debt burdenCapped at 70% of the applicant’s verifiable

income

26 Corporate lending N.A.

27 Guarantor N.A.

28 Documentation

New borrowers:

Current residence address proof

Identity proof

Last 6 months bank statements

Income proof (last 1years ITR/Form 16 and

last 2 months salary slips)

Professional degree

Existing borrowers:

Current residence address proof – only in

case of address change

Identity proof

Last 6 months bank statements

Income proof ( last 1 years ITE/Form 16 and

last 2 months salary slips )

29 Enhancements All loans to be net disbursed

33


Minimum 9 MOB performance on PL

30 Additional documents

Customer to provide any one of the listed

following professional degrees:

Chartered accountants:

ACA

FCA

Cost accountants:

AICWA

FICWA

Engineers:

B.tech/B.E.

M.tech/M.E.

M.Sc electronics

AMIE

MS(IIT Only)

31 Deviation Matrix Test program: within standard 4 % cap

CITIFINANCIAL EMPLOYEE LOAN POLICY – PERSONAL LOANS

S.no. Attribute Qualifying Criteria

1 Employment criteria Should be a confirmed employee of Citifinancial

2 Minimum loan amount Rs.10000

3 Maximum loan amount

Officer –Rs. 75000

Assistant manager – Rs. 150000

Manager and above – Rs. 200000

4 Tenor 12 months-48 months

5 ROI and charges As per the employee loan grid

6 Approvals Personal loan officers – recommendation by the

branch manager and approval by business head

and HR Manager

Collection officers – recommendation by

collection head and HR Manager

Credit officers – recommendation by the

34


department Head or supervisor and

confirmation from HR

Final approval by Credit director group

7 Repayments

Through post dated cheques to be collected at

the time of disbursal of the loan payable on the

5th of the month

ECS

8 Targeted IRR 14%

9 Employee declaration On Rs. 50 stamp paper

10 VerificationsCPV and TVR waived

Budget analysis and interview waived

11 De-duplication check

De-duplication check on Citifinancial database,

Citibank negative database and watch list

customers ( SDN & RBI watch list )

12 Debt burdenCapped at 70% of the employee’s verifiable

income

13 Documentation

Current residence address proof waived

Identity proof waived

Last 3 months bank statements waived

Income proof required for DB purpose

14Recourse in case of non

payment

EMI to be adjusted from the salary in the

following month

15 Enhancements and top ups As per the current personal loan policy

16 Credit deviations

As per the personal loan deviation matrix.

Credit deviations can be signed off by credit

director only

17 Pricing deviationsNo pricing deviations allowed. Prepayment

penalty is waived off in case of early pay off.

35


DOCUMENTATION REQUIRED:

S.NO. CRITERIA NEW BORROWER PROGRAM

EXISTIN

G

BORRO

WER

PROGRA

M

CORE PLUS

PROGRAM and

PL PLUS

PROGRAM

SURROGATE PROGRAM

1 Income

proof

Standard

a. Income tax

return

b. Form 16

c.Salary

certificate/

Slip from

government /

reputed

company

d. Income tax

clearance

e. Advance tax

challan

With

computation

f. Intimation

under sec 143

of the IT act

g. Audited

financials

a. The following can be considered as

surrogate income indicators:

b. last 6 months bank statements/track

record evidence of repayment to previous

financier (min 6MOB)

c. Debt consolidation – latest 2 Months

credit card statement

& photocopy of both sides of the credit card

d. payroll/salary credits/ average balance in

Suvidha a/c for Suvidha customers

( applicable for loan amounts till Rs. 50,000)

Latest income proof to be obtained for loan

amounts greater than Rs. 50,000.

Latest

income

proof to

be

obtained

for loan

amount

greater

than Rs.

50,000

36


Non standard

a. Pension

certificate

b. Salary

credit in bank

account other

than Suvidha

Account

c. Salary

certificate

from a not

very known

and reputed

Company

2

Address

proof

Standard

a. ration card

b. Utility bills not older than 90 days from application date

c. Life insurance policy paid premium receipt of latest year

d. Passport

e. Voters ID card

f. Registered rent deed/ company lease

g. House allotment letter from Government/ registered

societies

h. Property papers

- property registered deed

- latest updated bank passbook in applicant’s name ( subject

to bank account being 6 months old and CPV confirms the

same residence address )

- latest 3 months computerized bank statements in

applicant’s name (subject to account being 6 months old and

CPV) confirms the residence address

- Driving license in applicant’s name

37


- Last 2 months postpaid mobile phone bills in applicant’s

name

Non Standard

- Gas bill

- Declaration on company letter head for Government /

semi government undertakings and known public limited

companies

- RC copy of 4W in applicant’s name

- Active current track record from a known financier with

the same residence (as verified on CPV as well)

3 Identity

proof

Standard

- passport

- Voter’s ID

- Driving License

- Photo Credit Card

- Pan Card

- Employee identity card issued by Government/ reputed Public limited

And Private limited companies

- Employee state insurance medical cards with photographs

- Medical Insurance cards from public sector insurance companies with

photographs

- Trade license/ professional license (e.g. Sales tax no. , importer

exporter code )

- Applicant’s photograph

- Armed forces ID card

Non Standard

- photo attested from bank

- School/ College certificate showing Date of Birth

- Form 49(a) for pan card application

- Ration card with applicant’s photo

- Certified birth/marriage certificate

38


- Bank passbook with applicant’s photograph

on the same which is duly attested

- Property registered deed with applicant’s photograph

- Employee photo ID card from recognized company ( any company

which is listed with NSE/BSE or any recognized stock exchange of India )

-Vehicle (car) registration certificate with applicant’s photograph

4Photograp

h

Mandatory

for all

applicants

Mandatory for all applicants N.A.

5

Bank

statement

s

Bank

statements for

the last 3

months from

the date of

application.

Cover page of

bank

statements/

passbook

mandatory.

Bank account

should be in

existence for

minimum 6

months from

the date of

application

Bank statements for the last 3 months

from the date of application. Cover page

of bank statements/ passbook mandatory.

Bank account should be in existence for

minimum 6 months from the date of

application. For income surrogate

program bank statement to reflect

repayment to prior lender (to be at least 6

months on books). Not mandatory if

genuine track record is provided

6

Loan

application

and

agreement

Fully

completed

and signed by

the customer

Fully completed and signed by the

customer

Fully

complete

d and

signed by

the

customer

39


7

PDC’S

ECS

For the entire tenor of the loan

Revised policy:

- Number of PDC’s mandatory at the time of loan disbursal

to be 18 plus one pdc towards the full principal amount,

provided the loan amount is greater than equal to 30 months.

The case needs to be approved as a deviation through the

Deviation module by the credit manager group

- Can be issued from a maximum of 2 accounts and both

accounts need to be at least 6 months old

- Signatures to match with the Loan agreement and the

application form with proprietorship declaration. PDC’s can

also be provided from current account of proprietorship firm

along with proprietorship declaration. PDC’s can also be

provided from partnership firm a/c or company a/c along with

partnership deed + NOC from partners / Board resolution

from company

- PDC’s from a joint account ( applicant-father, applicant-

mother, applicant- spouse ) acceptable with signature

verification from the bank

ECS mandate to be completely filled in and signed/ stamped

by the bank. 4 PDC’s taken as security

40


ACCEPTABILITY CRITERIA FOR INCOME PROOF DOCUMENTS

S.no. Documents Acceptability Criteria

1 Income tax return Should be in applicant’s name

Income tax return should be filed from the same city as of

loan application. Any one of last 2years ITR is acceptable.

Only agricultural income or income from other sources is

not acceptable.

Income under the head business/profession, salary, others,

property and agriculture is acceptable and can be clubbed

Income from short term and long term gains and interest

income is not considered

ITR should bear the ITO stamp with ward/ range number

and date mentioned in the same and the acknowledgement

number written in hand or hard coded in black

It should have been signed the applicant

2 years ITR’s can be filed on the same date in the same year

2 Form 16 Has to be latest

It should bear the original stamp of the company and signed

by the authorized signatory. Company issuing a Form 16

should have TAN number.

It should give details on gross salary, standard deductions,

investments made for tax rebate, tax deducted at source

deposited in which bank on what date

3 Salary slip Any one of last 2 months salary slip is acceptable.

It should provide details on gross salary deductions and net

salary.

Computerized statement in standard format does not require

a signature.

Salary slip is never on a letterhead

4 Salary certificate Salary certificate cannot be older than 90 days from the time

41


of loan application

It should be signed and stamped by the company

It can be on the company letterhead or plain stationery and is

always addressed to “ whom so ever it may concern”

Salary certificate of known government/semi-

government/public limited companies is acceptable

5 ITCC Any one of last 2 years ITCC is acceptable

Has to be signed and stamped by the Income tax office

6 Advance tax

challan

It has to be the latest ( last quarter’s )

Should have the IT seal and details of income tax paid.

Should have the signature and seal of IT office

7 Intimation under

Section 143 of

the IT Act

Any one of last 2 years is acceptable.

Should have the signature and seal of IT office

8 Audited

financials

Any one of last 2 years is acceptable

Balance sheet/ Profit and loss statements along with

schedules are required

Auditor’s report and auditor’s stamp and signature required

on all statements

Corporate should have positive cash flow

9 Pension

Certificate

( Non Standard )

Documents from the government body from where the

applicant has retired giving details on pension entitlement

along with last 3 months bank statements showing pension

credit in the bank

42


ACCEPTABILITY CRITERIA FOR IDENTITY PROOF DOCUMENTS

S.NO

.Documents Acceptability Criteria

1 Passport

Should be in applicant’s name

Should be valid for next 3 months from date of

application

Should confirm applicant’s identity through the

photograph, signature, Date of birth and addresses

Check for the passport number and place of issue

2 Voter’s ID card


Photograph on the same should identify the applicant

Check for father’s/spouse name, applicant’s age and date

of issue

Check for unique alphanumeric ID card no on top of the

photograph

For all cards issued from 1996 bears the same number on

the backside of the card

Check for applicant’s address and issuing body’s

hologram seal and signature with year of issue

Check that the printing has been done on the back and

front of the same paper, not two papers joined together

with glue

3 Driving license Should be in applicant’s name, photograph, on the same

should validate the customer identity

Check for the validity date, applicant’s signature and

issuing authority stamp

Check for DL no, father’s name/ spouse’s name and date

of birth

DL not laminated should have the photograph attested by

the RTO

43


Laminated DL will not have the stamp

4 Photo credit card


Check for the photo and signature which should be

specific to the applicant

Check for the credit card no and validity period

Expiry date should not be another 3 months from the loan

application date

Should have been issued at least 1 year from the loan

application date

5 PAN Card

Issued by the government of India to all with taxable/ non

taxable income. It stands for Permanent Account Number.

PAN no. is a unique 10 digit alphanumeric number

mentioned on top of the card. The 5th character of the

number is the first letter of the first name or the last name.

4th character is indicative of the kind of entity who has

been issued the card. Verify the applicant’s photo,

signature, date of birth, father’s/ spouse name with the

information available with us

6

Employee ID card issued by

Government/ semi

government companies/

armed forces

Check for applicant’s photograph, employee code,

company seal and signature with validity period.

The same needs to be cross verified with application

form, CPV and TVR done at the office

7Employee state insurance

medical card with photo

Check for the policy no., applicant’s photo and validity

period

8

Medical insurance cards

from public sector insurance

companies with photo

Check for the policy number , applicant’s photo should

validate the individual validity period

9Trade license/ professional

license

Check for license code, date of issue, type of business

whether same correlates with application form and

verification, applicant’s photograph on the same should

validate

10 Armed forces ID card Check for Photo, Year of issue, Seal of Indian army

44


Non standard documentation required

1 Ration card with photo

Check ration card should be at the applicant’s current

residence address as given in the application form

Photograph should validate the applicant and should be

attested by gazetted officer / authorized signatory

The photograph on the ration card can only be of the head

of the family

2

Bank passbook with

applicant’s photo attested on

the same

Bank passbook should be in the applicant’s name. It

should show his name and account number. Photograph

on the same should validate applicant and have the seal

and stamp of the bank. Seal stamp should partly be on the

photograph and the surface

3

Property registered deed

with applicant’s photograph

attested

Property registration documents on the stamp papers

bearing applicant’s photograph and signature

4Employee photo ID card

from recognized company

Check company status ( any company which is listed

with NSE/BSE or any recognized stock exchange of

India)

Check for applicant’s photograph, name, designation,

employee code and company name and logo

Some of the firms also mention the residence address on

the backside

5

Vehicle (car) registration

certificate with applicant’s

photograph

RC to be in applicant’s name and photo to validate the

applicant. Please check whether the vehicle is owned

6Certified birth/marriage

certificate

Check for Location, hospital name/authorization from a

court, year of birth/ marriage

45


TRANSACTION PROCESSNEWBORROWERS

Note:

DSA, Mailer, Walk in, Tele calling

Application form + Documents

Initial Screening Positive

Data entry,Dedupe & Reject

N

Data Entry + Ref. No. Generation

Y

Deduplication check+Citibank Credit checkPositiv

eReject

N

CPV Initiation Positive

RejectN

Y

TVR InitiationPositive

Reject

N

Credit Decision Positive

YN

Reject

Personal Discussion and Original Dox VerificationPositiv

eReject

NY

Budget Analysis Positive

RejectY

FINAL APPROVAL

Y

Y

46


N stands for No

Y stands for Yes

Personal Discussion and Budget Analysis has to be done by a PL Officer/Credit Officer

Final approval to be done by PL Officer/ Credit Officer with specific approval authorities as per credit

authority delegation matrix

EXISTING BORROWER

Pass the lead to the branch

Personal Loan Officer to get in touch with customer

Confirmation of address & phone number on telephone

Reference number generation based on application form/TVR & phone no. on TVR

Dedupe and Citibank negative data check

PositiveRejectN

Cpv Initiated for cases where:- Address Change- Previous Loan Track

Previous loan closed > 6 months

Loan amount > Rs. 75k

TVR mandatory for all cases

Positive RejectN

Call the customer to the branch

Cases with Finance Amount > Rs. 50kLoan amount and EMI as per the GRID-Refer to the Score based GRID where ever applicable along with the normal GRID customer informed and DOX/PDC/ECS checked-Debt burden capped at 70%-Latest income proof required

Cases with Finance amount < Rs.50kLoan amount and emi as per the GRID Refer to the Score based GRID wherever applicable along with the normal GRID Customer informed and Dox/PDC/ECS checked

Prepare Cheque, Sign and Disburse

47

Tele Calling Identify the applicantConfirm basic eligibility on loan amount based on the

score/grid

Hot Lead Generated


CUSTOMER INTERVIEW & BUDGET ANALYSIS – AN OVERVIEW

Purpose of interview is for the PL officer/ underwriter to directly meet the customer and form an

unbiased opinion about the genuineness and credit worthiness of the applicant. Based on the interview

process checklist and budget analysis workings, the officer scores the proposal on 2 counts:-

Ability to repay the loan amount with interest

Intention to repay

While the contents of the Customer interview sheet and Budget Analysis workings gives a fair idea

about the “ ability “ factor, the “ intention “ factor is a more subjective item and is based on the

opinion of the PL officer based on the discussions made during the interview.

Customer interview process

Purpose

The purpose of interview is to get a feel of the customer and establish a relationship. After verifying

on the “permanence” and “ability to pay” factor, the interview process helps to gauge the “intention to

pay”. The interview process is not just a customary filling up of a questionnaire. It should be more of

a discussion with the applicant in order to judge his credit worthiness and intentions.

While conducting the interview, the following factors must be considered:

a) Appearance and body language - A person who comes for an interview should have a positive

attitude and body language. One should be careful if he/she avoids eye contact and has shifty

appearance. The person should be willing to give information pertaining to himself and his

background.

b) Family background - The applicant and applicant’s father occupation must be verified. This should

provide an overall idea of the applicant’s social status and financial support system.

c) Purpose of the loan – The genuine purpose of the applicant for taking the loan must always be

known.

d) Ability to pay – The applicant must always be asked about the amount of EMI that is bearable to

him/her. This will provide information about the financial stability of the customer.

e) Credit consciousness – the customer who is taking a loan has to be credit savvy enough to realize

the implications of taking a loan. He should be made aware of the interest being charged for the loan.

f) Respect the privacy of the customer

48


MARKETING TECHNIQUES

CitiFinancial has obtained the first mover advantage in the field of Personal Loans with an enviable

market stronghold over its competitors who are basically in the form of organized banks, non banking

financial corporations, unorganized pawn brokers and private financiers.

However CitiFinancial have studied the various market trends and also devised various competition

strategies. Moreover CitiFinancial has introduced various marketing activities and initiatives at the

branch as well as management levels. The various sourcing channels for sales and marketing

undertaken by CitiFinancial are discussed as follows:

Press ads

Outdoor media and signage

Micromarketing

SMS

Mobiloans

Referral channels

Branch campaigns and themes

Window advertising and displays

E-Marketing

CitiFinancial Money Man

These strategies have been developed to obtain the following advantages:

1. Press ads –

These are published in newspapers and magazines in the local dialect. As a result the visibility of these

ads is high and the customer segment is directly targeted through these ads. These ads also have the

documentation types and point of contact clearly mentioned on them to capture proper feedback from the

customers.

2. Outdoor Media –

49


These types of ads provide maximum visibility to ensure top of mind recall at the time of need. However

for these kinds of ads the cost versus the returns is required to be measured.

3. Micro marketing –

This involves organizing road shows at various points in the city at preferably crowded malls and

shopping stores so that the visibility of the ads increases. Moreover various events like fashion shows,

prize distribution ceremonies etc. are organized at clubs and hotels to attract more customers. Pamphlets

are also distributed by CitiFinancial agents among customers near offices, local paan shops, at bus stands,

sweet shops etc. to attract the local crowd of that area. Pamphlet distribution is usually undertaken at areas

close to a branch so that more customers from that area are obtained. Moreover during local festivals also

various functions are organized by CitiFinancial or free gifts are given to people to ensure brand recall

among customers and also gain in popularity.

4. SMS –

This is the most cost effective method and also provides immediate response from the customer. Special

offer SMS is sent to customers and the number for customers to respond back is also sent. This service is

24*7 available for customers to reply back. Moreover this service is available across multiple locations

hence this mode of advertisement saves a lot of cost for the company.

5. Mobi-loans –

This is a medium of outdoor advertising adopted by CitiFinancial. Here the van is taken to various busy

places of the city and a credit underwriter travels with the van. After discussion with the customer in the

van the process of loan is initiated. The loan fulfillment capability is available on board through

disbursement at branch.

6. Referral channel –

This is conducted at the branch itself. Here when a customer is disbursed with a loan the customer is

promised with gifts if he can find more people who are interested in taking a loan from CitiFinancial. The

gifts are on display at the branches to generate curiosity among the customers. The women’s loan

programme initiated by CitiFinancial is an example of this. Sometimes member-get member mailers are

also mailed to existing customers and gifts are provided to them.

7. E-Marketing –

This is a new method of marketing which has been adopted by CitiFinancial recently. Here the company

provides online advertisements on 3rd party sites like indiatimes, bharatmatrimony, sify, bazee etc. As a

result customers can log into the CitiFinancial website and confirm details of various kinds of loans

provided by the company. Moreover users can also calculate the amount of interest and emi that they will 50


have to pay with respect to the amount of loan they require by using a loan calculator present in

CitiFinancial website.

8. CitiFinancial Money Man –

This is an inflatable tool used to attract crowds at busy locations like PVRs, shopping malls etc. The

money man concept is very easy to spot for customers and also brand recall is very high among the

audience. Moreover the crowd is very easily attracted towards such promotions.

I-SELL – DATABASE AND DUMPS

The I-Sell program that is inbuilt within the CitiFinancial online system helps to keep track of the

response from all marketing activities. Along with that it also keeps a record of which customers’

replied back from these marketing activities undertaken. If any customer is interested and has been

finally disbursed with a loan then the details of that customer are feeded into the system by using the I-

Sell application. This application maintains a database from which more customer information is

generated and also the data collected every month is provided to tele-callers who then call up the

customers and explain the further details. The database stored within I-Sell is filtered product wise

and branch wise and then provided to various branches across the country. The I-Sell system also

keeps track of Consumer Durable loans as well as Two Wheeler loans financed by various customers.

After a period of 4 months (for Two Wheeler) and 3 months (for Consumer Durable) the customers

are called up by tele- callers and enquired about if they require a Personal Loan. Customers who have

a good repayment record for 4 months and 3 months for the respective loans are only sanctioned a

Personal Loan.

BENEFITS OF I-SELL:

The various benefits of the I-Sell process are enumerated as follows:

Elimination of paper trail

Minimized reports

Increased efficiency

Filtering, sorting , grouping to enable data analysis51


TARGET FORECASTING MECHANISM

The target forecasting mechanism in CitiFinancial was determined on the basis of how vintage the

respective branch is. A new branch after being fully operational ideally does around 50 loans for the

first month. Every month based on the performance of the branch i.e., the number of loans disbursed

and the amount of delinquency the next month’s target is fixed for a certain branch. For the first 6

months a new branch setup should be having 0 delinquencies. However if a branch is staggering with

delinquency just after being operational the targets set for the branch are lesser for the next month. If a

branch meets its target for the respective month on an average that branch is supposed to do another 50

loans extra for the next month. In this way every month each branch increases its capacity with 50

loans. As a result of which the break even point for the branches are easily achieved. After a certain

branch achieves the break even then the branch starts earning profits. The performance of the branches

is monitored every month by the branch manager, district manager and by the area head. If any certain

branch fails to meet its targets regularly the branch sourcing channels are changed and the branch

manager is also provided a new role. The targets provided to a definite branch also depend on the

strength of its sourcing channel. If the sourcing channels are not strong enough then the branch is

given less targets. The targets are also dependent upon the number of employees working in the branch

under the payroll of the company. If the number of people working is less than the average in other

branches then targets are less for that respective branch. Moreover the experience of the branch

manager is also considered for the purpose of setting up targets. Months were there remains a lot of

holidays the targets are reduced gradually due to less number of working days.

52


ORGANISATION & MANAGEMENT

HR MISSION:

To be an effective partner to the business in creating a high performing work environment which

attracts, develops and retains high caliber talent and motivates employees to perform their best.

HR POLICIES:

Consumer Durables Loans – This business is unprofitable as a standalone business. The reasons being

as follows:

- Yield/ subventions controlled by manufacturer

- Small ticket size

- Small tenors

- High dealer payouts

However CitiFinancial continues to carry out this business as it has the ability to generate large

number of customers who are afterwards interested in obtaining personal loans. This channel

constitutes about 65% of sales finance customers and among this 21% of customer base obtains a

personal loan.

53


HR STRATEGY:

STAFFING

Right person for the right job

Be the preferred employer of choice

COMPENSATING MANAGING PERFORMANCE PERFORMANCE

In tune with market realities -Setting the right expectations

In tune with the employee expectations - Having a robust mechanism to assess performance - Aligning recognition and rewards to performance

CREATING THE RIGHT ENVIRONMENT

Orienting people to the organization

Framing appropriate policies and practices that support the business

Employee involvement

DEVELOPING TALENT

Development planning

Succession planning

BUILDIING CREDIBILITY ON BASIS OF STRONG MEANINGFUL PROCESSES/ SYSTEMS AND SOUND OPERATIONS

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RECRUITMENT AND STAFFING

The HR process of recruitment and staffing in CitiFinancial ensures that proper staffing is carried out

through job recruitments and individual skill set matches are emphasized on. The various processes

through which recruitment takes place in CitiFinancial are as follows:

INTERNAL STAFFING :

- Here an individuals career graph improves with accordance to his performance management i.e. as

the performance of the individual gradually improves the incentive scale as well as the basic pay of the

individual also improves. Moreover the individual is responsible upon completing his KRA (Key

Responsibility Areas). The feedback upon the KRA decides the individuals further responsibilities.

EXTERNAL RECRUITMENT:

- Through various college campuses: CitiFinancial travels to various colleges across the country and

though campus recruitments they employ new talents.

- Direct applications from individuals: Recruitments are also made from direct applications from

individuals interested in joining CitiFinancial. The recruitment of these individuals depends on their

prior job experience and field of job.

- Referral programs: Individuals are also recruited from referrals of CitiFinancial employees. Here

the CitiFinancial employee who has referred the individual person is offered an extra incentive if the

person referred is selected by the company.

- Manpower consultants: Consultants are also asked to provide job applications. However this is

usually followed when mid year recruitments are done due to sudden absence of employees

55


- Web postings: This method has been introduced of late although it is not very much emphasized

on for recruitments.

SELECTION PROCESS:

PERSONAL INTERVIEWS WITH :

Unit Head / Branch Manager

Regional HR Team Member

PERSONAL INTERVIEWS WITH :

Unit head / District Manager

Regional Head/ Business Head

Regional HR Team Member/ Regional HR Head

PERSONAL INTERVIEWS WITH:

District Manager / Regional Head

Regional Head / Head HR

Function Head / Managing Director

BASED

ON

FEED

BACK,

PRE-

HIRE

CHECKS

&

REFEREN

CE

CHECKS,

OFFER

LETTER

ISSUED

AVP LEVEL ANDABOVE

MANAGERLEVEL

OFFICER / ASST.MANAGER LEVEL

56


CONFIRMATION PROCESS:

Objective:To review the performance of new hires and ascertain suitability for confirming their employment on

the permanent rolls of CitiFinancial.

Process:

Probation period for new joinees specified in employment letter ( 6 months )

Regional HR sends communication to supervisor & employee due for confirmation each month

Supervisor fills up the Confirmation Appraisal Form & sends back to regional HR

Regional HR communicates whether employee is confirmed or probation is extended to HR

operations.

HR accordingly sends letter to supervisor for the same. Supervisor hands over the letter to the

employee.

Confirmation is subject to availability of medical report certifying employee fitness, proof of

relieving from earlier organization, clear 7 year verification report & completion of joining kit.

57


PERFORMANCE MANAGEMENT PROCESS:

GOAL SETTINGOnus on employee and

SupervisorEmployee Self Appraisal

Discussion based reviewwith Supervisor

Rating Review by 2nd level Supervisor

Management Committee Review and Normalization of Ratings

Compensation,Career planning & Training

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CAREER PATH

DESIGNATION LEVEL PROFILE JOB FUNCTION

Officer Entry

Graduate with an average 2 -3 years experience

1. Frontline sales/Collections

2. Customer Service3. Transaction Processing4. Credit Verification

Assistant Manager

First Level Supervisor

Average 3-4 years total experience

1. Personal Loans Branch Head

2. Collections/ Customer service/ Processing Team Head

3. CreditUnderwriters

Manager Middle Level Manager


1.Medium size Team/ Unit Head

2. Product/ Department Head

3. District Managers

Assistant Vice President

District/ Regional/ UnitHead


Regional Level responsibility

Vice President Zonal/ Functional Head


Country Business Manager’s Direct Reportees/ 2 downs

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EMPLOYEE REWARDS:

CitiFinancial has a very good process for rewarding its employees. The basic initiative behind this

kind of concept is to motivate the employees and to make them retain their performance for a certain

period of time. The basic philosophy can be explained in the following way:

1. Compensation to employees competitively vis-à-vis the market : CitiFinancial believes in providing

compensation to its employees with par to the market standards and in fact better than them so that the

employees are satisfied and attrition can be retained.

2. Compensating employees based on performance : CitiFinancial believes in compensating employees based on their performance patterns.

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TOTAL REWARDS AT CITIFINANCIAL


FINDINGS & ANALYSIS

The findings and analysis can be illustrated with the help of a SWOT analysis:

STRENGTHS:

Strong Market Presence: One of CitiFinancial’s biggest strengths is the market presence of the

company. The company has spread itself virtually in all parts of the world and as a result is the leader

in the NBFC (Non Banking Financial Corporation) market. They are also the leaders in providing

personal loans to customers worldwide.

Product Differentiation: CitiFinancial unlike other NBFC’s has gained the first mover advantage

by introducing newer products. The company had started of by providing only personal loans to

customers but gradually they have launched other products such as Two Wheeler loans, Consumer

Company Performance

Individual Performance

Competition Survey

Annual Bonus

Quarterly Incentives

Stock Option Awards

Stock Purchase Plan

Leaders of Distinction

Business Driven ContestsMerit Increase

Market Correction

FIXED COMPENSATION

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VARIABLE COMPENSATION

OTHER REWARDS


Durable loans etc. so as cover more of the market share. New companies have now started following

the CitiFinancial model of business.

Market awareness & Brand Recognition: CitiFinancial has been successful in creating a suitable

market awareness and brand recognition for themselves through constant market research and

innovative marketing techniques. CitiFinancial was the foremost player in the personal loans market as

a result of which the company had undertaken numerous marketing research programs to study

customer requirements and the future possibilities in this segment.

Bigger market share, higher profits: CitiFinancial due to its global market presence has been

successful in earning huge profits from different countries and as a result of which the company has

spread itself even further. Thus the company’s profits keep growing.

Strong Credit policies: CitiFinancial has inculcated some of the most strong credit policies due to

which the loans are disbursed only after proper verifications and reference checks. This helps the

company to keep the average delinquency rate low.

Background: Another major advantage of CitiFinancial is that it is a Citigroup company. Thus all

kinds of support in terms of managerial decisions, takeover, mergers etc. required by the company is

provided from Citigroup. In return CitiGroup benefits from the huge revenues earned from

CitiFinancial as it is one of the most profit earning business of CitiGroup.

Strong Bonding among Employees: CitiFinancial develops strong bonding among its

employees for the company in order to lower attrition rates by offering lucrative salary packages and

handsome incentives. Along with that various other important events are celebrated by the company

also. The company also sponsors foreign trips at the end of each quarter for all the qualifying

branches.

One Ad campaigns: CitiFinancial sponsors frequent ad campaigns in order to ensure brand

recall among customers. Various campaigns and programs are conducted to reach out to people. A few

examples would be like the Loan Mitra Program, Women’s loan program, etc.

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Strong hierarchy: CitiFinancial boasts of a strong managerial hierarchy that is very much

efficient towards the company and is constantly working on to improve the company’s policies in lieu

of constantly changing business environment.

Excellent loan processing system: CitiFinancial possesses one of the finest loan processing

systems (I Loan) which is very much efficient and also much reliable. The system is a result of the

numerous researches undertaken by the company. Many new companies have been trying to obtain

such a system similar to that of CitiFinancial.

Periodical Audits: CitiFinancial undertakes a lot of audits round the year of which few are

external audits and another is ARR (Audit Risk & Review) undertaken by people from Citigroup

itself. Due to frequent audits the policies are followed and rules are adhered to by all the branches in

CitiFinancial.

WEAKNESSES:

Flexible policies: The policies followed in CitiFinancial are flexible as a result of which the

policies can modified by an individual to his own advantage. At certain times this tends to become a

hindrance to the business environment.

Mis selling: The agents recruited by CitiFinancial for obtaining loans usually hoax customers

by promising high values of loans although the customers are finally provided a much lower amount.

This is also followed for the rate of interest charged. As a result of which of late the number of

customer service issues for CitiFinancial have increased.

High Delinquency: Due to much reliance on the agents CitiFinancial is now facing a problem

of high rate of delinquency in the market. As a result of which the profits are getting reduced for the

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company. In a bid to provide more loans to customers and rising targets more risk is being undertaken

by branches which finally are resulting in the net profit going down for the company.

Fudged documents: The agents have been provided much flexibility by the company were

by the agents usually fudging documents of customers and sanction loans on the basis of false

documents. Finally these customers turn delinquent and this results in a loss for the company.

Weak collections department: The collections department in CitiFinancial is comparatively

much concised and not well focused upon. Due to this the company is facing many problems with

rising delinquency.

Loan amount and tenure is flexible: The amount and the tenure are decided by the respective

branch managers due to which the performance of different branches of CitiFinancial are different. At

certain branches delinquencies are very high however at certain branches they are under control. The

branch managers do not need the approval of the credit team before suggesting a loan amount and

tenure for a customer. The loan amounts are decided mostly upon the feedback of the agents and also

the verification reports. At certain times due to pressure of targets branches undertake higher risks

which later increase the delinquency figure.

Improper Tele-verification process: The tele verification process followed in CitiFinancial is not

proper as it can be easily fudged by the respective person and a loan can be disbursed based on that

fudged report. This process is usually followed in many branches across different branches. This is

because there is no authority on the person undertaking the TVR process. The decision to approve a

case or reject it depends on the person doing the TVR.

Absence of proper Cpv agencies: Cpv (Contact Point Verification) is a very essential part of the

disbursal process of a personal loan. Based on the Cpv reports cases are rejected or approved.

However CitiFinancial has a lack of Cpv agencies due to which Cpv reports of the respective branches

get hindered. At certain times customers are lost due to late Cpv reports and this leads to a loss of a

customer for the company.

Long work hours: CitiFinancial employees have to attend office for long hours almost for over 12

hours each day due to which the employees get tired and dissatisfied. Sometimes employees also have

64


to attend office on Sundays because of the sales pressure and hence of late a lot of attrition has started

happening in CitiFinancial.

Influx of Freshers: CitiFinancial is undergoing a lot of attrition and hence a lot of freshers are

being recruited by the company. These freshers are hence very easily convinced to provide higher loan

amounts by the agents at their comfortable rate of interest. As a result the fair judgment for each

disbursal is lost. This on the other hand helps the agents to complete their targets.

Misleading Cpv reports: in absence of adequate Cpv agencies many misleading Cpv reports are

forwarded by these agencies due to which many cases get rejected wrongly.

OPPURTUNITIES:

New Policies: CitiFinancial needs to develop newer policies to meet the new challenges in the

personal loans market. CitiFinancial can start providing a top up loan to its existing customers at the

end of the 6th month by reducing the rate of interest instead of a top up after 9 months. This could help

the company to capture more of the market share faster.

New management: CitiFinancial may opt for a new management team in order to bring in new

changes in the company and expect growth in the future.

Merger: CitiFinancial may opt for a merger with any of the newer companies entering the

market like Reliance in order to increase its market share and position and also by obtaining a merger

it can make its base stronger.

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New products: CitiFinancial should now start doing business of other products like home

equity, mutual funds etc. to generate more funds and earn revenues from these new avenues.

Strong Collections Team: A very strong collections team will help CitiFinancial recover the

debts from delinquent customers. This will be a similar model as followed by ICICI Bank.

THREATS:

CitiFinancial is now facing rising threats from various other companies who have also entered

the personal loans market like ICICI Bank, India Bulls, HSBC, Prime Financial ( Standard Chartered

Investments and Loans Limited ) etc. These companies have introduced various new policies and are

offering better offers than CitiFinancial. These companies are slowly eating away into the whole

personal loan market share.

CitiFinancial also has lost a lot of its old employees who have been offered better salary

packages as well better positions by other players. As a result of this the new companies have obtained

the business techniques which have been utilized by CitiFinancial for all these years.

Newer policies are being adopted by the new players. Also they are targeting new segments of

customers for providing personal loans. For instance, India Bulls is providing loans as low as Rs.

10,000/- to customers. ICICI Bank has stopped providing existing customers with top up loans and is

providing them with parallel loans so that the interest earned on the whole is much higher.

Faster turnaround time is being maintained by newer companies in the market.

RECOMMENDATIONS:

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Tighter Policies: CitiFinancial should introduce tighter policies into the system so that they

cannot be manipulated by the employees in order to fulfill their own targets. This will help the

company in maintaining an upper hand over its employees and also earn the estimated profits.

Authority should be provided to the adequate levels only.

Control over Mis selling: CitiFinancial must aware its employees of the long term damages to

the company as a consequence of mis selling. In this way CitiFinancial must reduce this tendency of

its employees of mis selling the loans to customers. Each and every customer must be properly

explained about the tenure and the rate of interest charged to him for the loan taken so that the

numbers of customer service issues are also reduced in the future.

Lower Delinquency Rates: CitiFinancial must undertake proper measures in order to reduce

the delinquency rates of its loans. This will involve a stronger credit team who will scrutiny files

properly and also disbursal should be done after being confirmed about the repayment capabilities of

the customer.

Strong Collections Team: CitiFinancial should develop a strong collections team in order to

recover the debts from delinquent cases and also to lower the delinquency rate and provide higher

profits to the company.

Adequate Cpv Agencies: Adequate number of Cpv agencies should be obtained by

CitiFinancial in order to reduce the turn around time for its Cpv’s. This will help the company to

provide faster loans to its customers. Moreover with more Cpv agencies the quality of the Cpv reports

will improve. As a result the loans will be provided to genuine cases only and hence will solve

delinquency problems.

BIBLIOGRAPHY

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All details about the Personal Policies have been obtained from the CitiFinancial policy

manual

www.citifinancial.com

www.wikipedia.com

www.ask.com

APPENDICES

ANNEXURE I – LIST OF FINANCIERS APPROVED FOR SURROGATE INCOME PROOF

Citibank

Citicorp Maruti

CitiFinancial

American Express

HSBC68

http://www.ask.com/

http://www.wikipedia.com/

http://www.citifinancial.com/


SCB ( STANDARD CHARTERED BANK )

Tata Finance

Sundaram Finance

GE Countrywide

Kotak Mahindra

ICICI

Bajaj Auto Finance

Ashok Leyland Finance

Kinetic Fincap

GMAC

Note: We can also accept a loan repayment to any other bank or financial institution where the

repayment is reflected through bank statement debits. Only PDC based repayment is possible.

ANNEXURE II- LIST OF CREDIT CARD APPROVED FOR SURROGATE INCOME

PROOF

Citibank NA

Standard Chartered bank

HSBC

SBI-GE

ICICI

American Express

HDFC

ABN AMRO69


ANNEXURE III – RESTRICTED CUSTOMER PROFILES

Politiicans/ Political Contacts

Police ( CBI/CRPF/IB), Family member in police

Prosecutor/ Family member prosecutor

Daily wagers, Contract work

Property Dealer

Press- refers to correspondents, journalists, editors, etc in Print media

Fraud misleading documents/ Negative market feedback

Financiers

Investment Income

Share Brokers

Labor Contractors

Commission agents

People employed with Collection/ recovery agencies

Security agencies

Bars, Liquor, wine shop owners

Time sharing business

Plantation companies

Film & TV actors

Verification agents, DSA and Collection agents

Residence cum Office profiles

Purely agricultural or rental income

Transferable jobs

Shared accommodation/ government sublet/paying guests/hostel accommodation

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thesis 2

Documents

Transcript of thesis 2