1. Personal Loans
Revised- July 2013

2. Introduction
Types of PL, Market size, Competition
Customer Insights
Segmentation, Customer triggers & barriers for Personal Loan, Customer attributes while availing the loan,
Customer Offerings
Eligibility, Documentation Required
Processes
Product flow, business sourcing strategy, Lead Management & Sales Process, Credit sanction process, PL contact creation process, PL A/C closure process
Collections
Objectives & Strategic Action, Roles & Responsibilities, Collection Follow up Matrix
Customer FAQs
Frequently asked questions
Form
Sample of Application form
PD visit form

3. Introduction

4. Types of Personal Loans
Loan Against FD & Securities
Large Ticket
Personal Loan
Small Ticket
Personal Loan
Unsecured
Personal Loan
Secured
Personal Loan
Loan for Personal consumption based on securities in form of FDs, Equity shares etc
Loans for personal usages without any securities, based on income streams
Small enterprises/proprietorship firm (Turnover < Rs. 20 Lacs) meeting their various business needs & expansion as they are excluded from SME funding of all banks
Small Loans for immediate needs of customers, especially low income group
Loan Against FD
Loan Against Shares
Loan against NSC
Loans against Gold Bonds
Loan against KVP
Loan against insurance policies
Gold Loan
Education Loan
Marriage / Festival Loans
Home renovations
Medical Loans
Travel Loans
Loan for Salaried
Loan for Small Shop keepers/businessmen
Surrogates & 2Wh loans
Credit Card take over
Business Loan
Loan to Professionals
Bridge Loans
Working capital loans

5. Existing Market sizing for personal Loans
Loan against FD
36000 cr
~ 500 k
10%-18%
Normal Personal Loan
8000cr
~ 200 k
13% - 28%
Business Loan
6000 cr
15%-25%
Small Ticket Loan
Shut by most of
~ 35 k
30% - 60%
Self Employed Salaried
Marriage Function
Education
Medical Emergency
Household Goods
Buying of Securities
WC Business Reqd
Banks who have FDs
Demat operating Cos.
Self Employed
Salaried
Home Renovation
Travel Vacations
Marriage Functions
Credit Card Bills
Educations
Banks
NBFC
Self Employed
Salaried CD TW
Marriage Functions
Banks
NBFC
Pvt Companies
Self Employed
Salaried
Team Loans
WC/Capex
Banks
NBFC
27-Apr-17

6. Competition :Major Players Strengths and Weaknesses

7. What sets up apart from the rest?
Customized solutions for every financial need
Personal Loans
ESOP Finance
Educational Loans
Travel Loans
Wedding Loans
Loans against shares
Loans against Gold
Gold Loans
Lifestyle Loans
Home Improvement Loans
Each product power packed with value adds

8. Value creators –our products
Customized solutions for all financial needs
Tailor made schemes to choose from
Flexible repayment options
Give the customer what he/she wants –Not what we want
Finance for every financial need
Structured offers for specific needs
Differentiate by leveraging existing group strength
By bringing all Tata Brands under one umbrella and packaged finance
options

9. Customer Insights

10. Customer Segmentation
Personal Loans
Salaried
Self Employed
Non Professional
Non Individuals
Professionals, Doctors,
Architects CAs
Employees of Public/ Pvt. Ltd. Companies, Govt. Institutions , PSUs
Pvt./Public Ltd. Co.
Partnership
Firms
Small enterprises segment consisting of retail and wholesale traders, manufacturers and service providers: Proprietorship/Partnership Firms Pvt. Ltd. Companies & LTD companies (closely held)

11. Market clearly differentiates on trust & customer orientation than IRRs & costs1
SBI leads the chart on ‘trust’, ‘transparency’ and ‘for people like me’. Private banks ( ICICI Bank & HDFC Bank) have better perception than other private & foreign banks
Trust & Transparency 2
ICICI Bank leads on ‘customer friendly staff’, ‘reputation’ & ‘knowledge of staff’
SBI is perceived negatively on these attributes
Flexibility & Customer Orientation 3
GE is perceived to be faster in disbursals & low / hassle free documentation followed by HDFC Bank
Process efficiency 4
Citibank & other foreign banks are perceived to be money lenders only for people with certain income
Empathy 5
SBI perceived to be the lowest. All other banks are perceived in similar bands and are not differentiated
Price

12. Triggers to take Personal Loans
RATIONAL –In Customer’s control
Immediate, unplanned need
illness
marriage
admissions to school, college
travel
Exceeding planned budget
renovation
construction
Assurance of future income
salaried; regular source
availability of other investments to fall back on in case of any problems in repayment

13. Triggers to take Personal Loans
RATIONAL –In Financier’s control
Lower interest rates than other options
Money lenders charge higher rate of interest
Perception that salary would increase in future and hence interest rate may not pinch much
Short processing time
Difficult to generate money from other sources in a short duration
Essential when need is urgent
Long repayment tenure
Flexible repayment options : Can fix repayment as per ones needs –not be embarrassed having borrowed from friends

14. Triggers to take Personal Loans
RATIONAL –Customer & Financier’s control
Desire to not disturb other investments
For a planned, fixed purpose
Returns might be disturbed
Complicated process
Freedom of not revealing the actual purpose for which amount is required
Use money for multiple purposes
Fulfill various requirements in one go
No other borrowing options

15. Triggers to take Personal Loans
EMOTIONAL –In customer’s control
Maintaining secrecy/confidentiality
Does not want others to know that one has taken loan
To not cause tension to family members
Avoid negative tag of being a loan taker
Retain pride
Desire for immediate wish fulfillment
Ambition –NOT luxury
Unwilling to postpone plans

16. Triggers to take Personal Loans
EMOTIONAL –In customer’s control
Social status enhancement
Have access to things –durables, holidays etc… that one would not have otherwise.
Positive attitude
Willing to take risks
Confident &assured of future income
Pride / ego
Does not wish to borrow from others
Dislikes feeling of being indebted to anybody

17. Barriers to take Personal Loans
RATIONAL –In Customer’s control
Negative word of mouth
Negative experience of friends, relatives
Sense of fear
Uncertainty
Uncertainty of regular, future income
Not salaried
Fear of penalties for delays in payment
Lack of awareness
Procedures & processes
Eligibility
Influence of family members
Refusal to support decision
Aggravating negative perceptions

18. Barriers to take Personal Loans
RATIONAL –In Financier’s control :High interest rates
Recurring monthly burden
Feeling of being cheated
Hidden costs Processing fee
Service charge
Penalties for early closure, late payment, cheque bouncing
Interest
Complicated mathematics
Calculating interest rates
Fixing EMIs
No experience of serious banking
Difficulty of paperwork
Need for guarantors
Absence of supporting documents for non salaried

19. Barriers to take Personal Loans
EMOTIONAL- In Customer’s control
Negative attitude to loans per se
Makes you appear ‘needy’
Negative social tag
In Financier & Customer’s control
Sense of burden and responsibility
Paying every month
Inability to manage if other responsibilities crop up
Ego in approaching anybody
Live within means
Make do with existing resources
Fear and insecurity
Inability to repay loan & Unethical recovery process

20. Customer Offerings

21. Eligibility of Salaried Segment
This segment as defined in the policy is an individual working with public ltd or private ltd companies and government institutions
Product Attributes
Tenure1 to 5years.
Loan amount ranging Rs Lacs to Rs. 15 Lacs. ( Min loan amount for corporate salaried segment to be Rs.75K)
Basic Eligibility
Age: 21 to 58 years (Maximum –58 years or retirement age whichever is later -at loan redemption (last month of EMI of loan)
Minimum Income Norms
Rs for all cities – Non TATA
Rs for all TATA Employees
Residence Stability
1 year in current residence or 3 years in same city
If owned and proof available than 1 year

22. Basic Eligibility –Salaried
Employment stability
1 year in current job and Total experience of 2 years
For Insurance 2 years in current job
For IT sector 1 years in current job and 3 years of total employment stability
Banking Parameters
3 Months bank statement of Salary account
No EMI Cheque Bounces in last 3 months
Average bank balance should be 1 time of proposed emi
Eligible Co-Borrowers
Spouse/Father/Son/Mother
Eligible Loan is based on multiplier varying according to tenure and Company category-Super CAT A, TGE, CAT A ,CAT B, CAT C and other
Lending limit is based on Company category-Super CAT A, TGE,CAT A , CAT B, CAT C and other
For loans above Rs. 3 Lacs, personal discussion is mandatory
Specific Additional Documents
2 months salary slip ( out of last 3 months)
Current and total Employment Proof

23. Top up Norms for Existing Customers
Minimum 8 months seasoning required for a 12 months tenor.
Minimum 12 months seasoning required for a 24 months tenor
Minimum 15 months seasoning required for a 36 months tenor.
Minimum 18 months seasoning required for tenors > 36 months.

24. Customer Segment –Self Employed
This segment as defined in the policy is an individual who is earning his livelihood through self employment
Product Attributes
Tenure 12 to 36 Months depending on customer profile
Loan amount 1.50Lakh to 15Lakh
Basic Eligibility
Age between 23 to 65 years
25 yrs for self employed at loan origination
23 years for family owned business.
(Maximum –65 years for Self Employed -at loan redemption (last month of EMI of loan).
Minimum Income is 2 lakh p.a.as per ITR
Last year ITR should not be 12months old
Any 2 consecutive ITR should have at least 6 months difference in filing date
Firm to be profitable for last 2years
Net worth of the firm to be positive
Clubbing of Income is allowed

25. Customer Segment –Self Employed
Residence Stability
1 year in current residence or 3 year in same city
If owned and proof available than 1 year`
Business Vintage of 3 years or business continuity proof of 5years
Minimum 1 year of operation from same premises
Eligible Co-borrower can be spouse/mother/father/son
Loan eligibility is calculated based on multipliers applicable.

26. Basic Eligibility –Self Employed
Final Loan Eligible is lower of
Multiplier
Average Bank Balance to EMI Ratio
Max Loan Cap
Banking Parameters
Latest 6 months bank statement required
Bank statements can be upto 30 day old (For SEP loan amount up to 5Lacs latest 3 months bank statements required)
No EMI & Non EMI bounce in last 6months
At least 4 Cr & Dr transactions per month
For loans > 3 lacs and upto 5 lacs, RTR of 1 lacs and Loan amt > 5 RTR of 30% of proposed loan amount with 12 months seasoning required
Average Bank Balance to EMI>=1 and not<=0.5 times, in case of CC limit account, the average monthly credit should be >= 2 times of EMI
Other Parameters
Either office or residence to be self owned
Residence should have one landline/WLL or Mobile
Office should have one postpaid Landline/WLL

27. Approved institutions for Repayment Track Record for Self Employed customers; This is applicable for RTR requirements.
All the repayments should be either PDC backed or ECS and should be in the form of Emi’s only. Customer cannot be funded based on cooperative bank tracks. For Personal loans, track should be in the name of individual and not on the company name.
Minimum 2 positive trade references to be taken for all Self employed customers.
Due date of PDC – 3rd & 9th of every month

28. 1.GROSS RECEIPTS PROGRAM FOR DOCTORS
Target group -Self employed doctors
Medical Professionals
M.B.B.S
M.S/MD
M.D.S.
Minimum Loan amount-Rs.3lakhs
Maximum Loan amount--Rs.15lakhs
Tenor months
Minimum Gross Receipts.
MBBS – Rs.15lakhs
MS, MD, MDS – Rs.20lacs for Delhi, Mumbai, Chennai, Hyderabad, Bangalore, Kolkatta
Rs.15lacs for other locations
Note: This program is not applicable to Partnership firm, Private Ltd. Co. & Public Ltd. Co.

29. Minimum Experience:
MBBS 7 years
MD/MS/MS – 5 years completed after Post Graduation
(Qualification certificates to be collected)
Income by gross receipts method = 30% of total gross receipts from audited financials. In case of increase by 50% averaging needs to be done
FOIR--Annual EMI on Proposed TCL + Annual EMI on all other existing loans (as declared in cibil and bank statements)/Annual Income calculated by gross receipts method
Maximum FOIR --MBBS 55%, MD/Ms/MDS-65%
ABB-minimum 1 times of the proposed EMI
Residence stability—1 year

30. 2.UNSECURED LENDING AGAINST RENT RECEIVABLES
Target segment—customers with rental income as the main source of income
Individuals, proprietorships, partnerships, public and pvt ltd co.
Eligible tenants
Reputed public/Pvt companies, MNC’s, embassies, consulate offices of foreign countries, banks, financial institutions, international airlines
Properties given on rent to companies and properties of individuals where rent is paid by companies
Term- Max 3 yrs . Loan tenor to be co-terminus with remaining lease period
Minimum loan amount- 5lakhs
Maximum loan amount- 25lakh

31. Norms Monthly rent of at least Rs.30000
All property owners to be co-applicants
Vintage of lease agreement –more then 6 months
Minimum income as per ITR- Rs.5lakh of business income or rental income or both
Rentals to be credited on same day in last 6 month banking with a max diff of 2 days. No rental delays in last 6 months

32. Loan eligibility calculation
Loan amount up to 15 lakhs—Max TCL EMI to be 70% of monthly net rent receivable within unexpired period of lease + ABB of one time of TCL proposed EMI
Loan amount of 15-25lakhs
Receive rental income from at least 2 different properties
Max TCL EMI to be 50% of monthly net rent receivable
ABB to be twice proposed EMI
Annual maintenance if paid by property owner and other municipal taxes to be excluded from net rentals

33. Documentation 2 yrs ITR, P&L and balance sheet 6 months bank statement
Copy of lease agreement
KYC
Property ownership doc (Title deed copy)
Verifications ---CIBIL, FI, Dedupe, TVR, PD

34. Mode Of Repayment Up to 10lakhs
A letter from lessee mentioning acceptance to credit rentals on account of applicant
Lien of customer bank account where rentals are credited in favour of TCL
1 SPDC per 6 months( blank and undated) from customer bank a/c
Above 10lakhs
Irrevocable POA shall be executed by borrower in favor of TCL to collect monthly rentals from lesser on behalf of borrower
Escrow A/C to be operational for all rental receipt and standing instruction for the same A/C
Undertaking from customer that he will not avail any LAP from which rentals are assigned and to take NOC if intends so

35. 3. Insurance Sector - Salaried
Existing norms have been revised for the Insurance sector looking at the increasing delinquency
Sr.No
Parameters
Existing Norms
Revised Norms 1.
Current employment stability
1year
2years 2.
Minimum Income Norms
Net salary of Rs.20K
Net salary of Rs.50K

36. Additional Norms apart from PL salaried
Online PL Program
Additional Norms apart from PL salaried
Min Age: 21 & Max age 58 yrs. or retirement age whichever is earlier.
Minimum Rs for TGE and Minimum Rs for Super Cat A companies
Maximum tenure of 60 months
Maximum FOIR up to 70% including proposed EMI
CIBIL Transunion Score >=700
Documentation: All documents (Income, Bank statement & KYC, However in case applicant chooses the upload option then documents required will be two months salary slip, PAN Card, Bank statement
27-Apr-17

37. Pre-Qualified offer for Personal Loans
Existng Loan
Auto Loans
HL/HE
Minimum loan amount
Rs. 1 lac
Rs. 1.5 lacs
Maximum loan amount
Rs 3.00 lakh for Salaried & Rs 5.00
lakh for Self Employed Customers
Rs 5.00 lakh for Salaried & Rs 7.5
Eligibility
Calculation
EMI* No. of EMIs paid *1.2
Min tenor
12 months
Max tenor
36 months
Existing exposure
Norms
Should not have availed more than
one unsecured loan or a Home Equity
loan in the last 6 months/ Should not have availed 'Car n Cash'
or 'Innovative Car n Cash' loan in last
6 months.
Should not have availed Preapproved
offer under HL/ HE in last 6
months.
Qualifying criteria for Existing Track
Min Seasoning
Bounces
Never bounced in last 12 months
Docs Required
KYC & Cibil
FI for Residence or office to be initiated in case the address in application form is different from that of existing records.
Negative Profiles as per the existing policy will be excluded from this offering
27-Apr-17

38. Processes 38

39. Product Flow

40. Business Sourcing Strategy

41. Lead Management & Sales Process

42. Credit Sanction Process

43. PL Contact Creation Process

44. PL A/c Closure

45. Credit Work Flow CREDIT CHECKING AND ANALYSIS Document verification
De-dupe and customer details verification
CREDIT APPROVAL
Approval as per policy and authorization matrix
ANALYSIS
Delinquency
Business Trend 45

46. Verifications Residence Verification Office Verification
Residence Telephone Verification
Office Telephone Verification
CD ROM check
Internal De-Dupe
External De-Dupe
CIBIL
RCU ( Fraud Containment Unit)
Document Verification
Personal Discussion
Geo-limit & Approved Location Verification 46

47. Collections

48. Collection Play a vital role in personal loan
DELINQUECNY IS EXPENSIVE FOR ORGANISATION AND AFFECTS BY :
Slowing Rotation of Portfolio
Delayed Earning
Increasing Collection Cost
Decreasing Operating Spreads
Leading to increased collection problem
Threatening long term institutional viability
Financial Loss
Loan Loss provisions reduce surpluses
Reduction of Capital
Reduced recoverable loan outstanding amount 48

49. Collection
Collection phase begins on failure of account to meet one or more contractual payments.
Lets understand :
Objective & Strategic Actions
Roles & Responsibilities
Collection follow-up matrix
Skip Cases
Work Flow

50. Objective & Strategic Action
Minimum Credit Loss
Minimum Collection Expenses
Educate customer about need of timely payments.
Feedback on credit policy based on collection experience.
Balance between customer service and credit risk
STRATEGIC ACTION
Awareness Calling
Collection Calling
Dunning of Letter
Field Collection
Review Mechanism
Legal Action

51. Roles & Responsibilities
Welcome Calling
Delinquency Management
Appointment of Vendor
Fixing Geo-Limit
Agency Management
Regular Capacity Planning
Process Compliance
MIS & Reconciliation
Delivery of Collection Targets
Market information on defaulter & fraudsters.

52. Collection Follow up Matrix

53. Work Flow 1.CALL CENTRE ACTIVITY Welcome calling Gross Bounce Calling
Bucket X calling
2. COLLECTION FOLLOWUP ACTIVITY
Calls are made at different stages as shown in collection follow-up matrix.
3. NON STARTERS & SKIPS
Non starter cases are 1st priority for collection
Skip cases are handed over to skip tracer agency

54. 4. SPECIALISED COLLECTION TOOLS
Sharing of database
Letter to employers
Paper Ads/ public notice
Conducting Lok Adalat
5.LOAN RE-CALL NOTICE
Letter to bucket 3 + customers
6. LEGAL CASES
Dunning letter to customers
Civil & criminal litigations filed

55. Skip Cases SKIP CASES WOULD BE IDENTIFIED ON : Non Payment of EMI
Borrower nor his family available on address
Shop / office closed
Trade reference / Personal reference unable to provide borrowers details
Collection agency / FI agency / Collection Manager / Regional Collection manager needs to certify the above facts after visit
INTENTIONAL
Purposefully move
Avoid TCL representative
UNINTENTIONAL
Inadvertently failed to notify TCL about changes

56. IDENTIFICATION PROCESS
Due-Diligence to be done
Non Payment of EMI
Agency / Collection categorizing applicant as SKIP
Copy of Complete Loan file of applicant to be retrieved
Collection and Regional Collection manager needs to validate
TRACING PROCESS
Internal collection team efforts to trace customers
External experience SKIP tracers to be used
Evaluate application form in detail to identify source of information
Phone inquiries, financial institution , card companies
Contact family members, neighbours, references
Avoid asking discreet question and express intention
Check Introducers, PDC etc.

57. STEPS AFTER IDENTIFICATION
Collection staff to verify account information
TCL records to be updated with correct information
Allocation of accounts to Specialized SKIP tracing agency
Allocation to be approved by Unit collection manager or RCM
SKIP tracing efforts to be documented
CREDIT RUNAWAYS / SKIP CASES ARE CUSTOMERS THAT FAIL TO HONOUR THEIR OBLIGATIONS AND DISAPPEARS , NEEDS TO BE HANDLED WITH DUE CARE AND UNDER SPECIAL EXPERTS GUIDANCE FOR FUTURE RECOVER ACTIONS

58. Customer FAQs

59. Customer FAQ How do I repay my Personal Loan ?
Loan is to be paid in Equal Monthly Installment through PDC or ECS
What Security do I need to Provide?
There is no security required as it is unsecured lending
What are the loan Tenure Option ?
It is 12 to 60 months
Can I repay the loan earlier ?
Yes loan can be pre-paid earlier at maximum pre-payment penalty of on principal outstanding of the loan.

60. …Customer FAQ How much I can avail as Personal Loan?
You can avail loan ranging from 1.5 lakh to 15 lakh depending on the loan repayment capacity.
Is there any additional charges?
A processing fees of to be paid upfront.
How much time it takes to get the loan sanctioned?
After completion of necessary documents it is sanctioned very quickly.
Can I use the Personal Loan for anything?
You can use personal loan for any legal purpose only need to declare the same in application form.

61. Application form

62. Sample PD visit form
Annexures – 21

63. Thank You