Biju Patnaik Institute of IT &

Management Studies

MBA

SUMMER INTERNSHIP
REPORT 2018
STUDENT NAME BPUT REGD. NO.
SARFARAZ SHA 1706258032

FACULTY GUIDE CORPORATE GUID

P R O F. BHAGABAN BEHERA MR.TARUN SEN PUHAN

A Study on Unsecured Business Loan Appraisal Process of BAJAJ FINSERV

A Final Report Submitted

To

BIJU PATNAIK UNIVERSITY OF TECHNOLOGY, ODISHA

(In Partial Fulfillment of the Requirement of the Degree of MBA 2017-19)

Submitted By

SARFARAZ SHA

BPUT REGD. NO. : 1706258032

Under the esteemed Guidance of

Tarun sen puhan – Regional Manager

Internal Guide:- Prof. Bhagwan Behera

BIJU PATNAIK INSTITUTION OF IT AND MANAGEMENT STUDIES

( Registered by AICTE, New Delhi & Affiliated by BPUT, Rourkela)

BHUBNESWAR
 CERTIFICATE OF THE GUIDE
WHOM SO EVER IT MAY CONCERN

This is to certify that the Project Work titled ‘A Study on

Unsecured Business Loan Appraisal Process of BAJAJ FINSERV’ is a
bonafide work of SARFARAZ SHA Enroll/Reg. No: 1706258032 carried out
in partial fulfillment for the award of degree of MASTER IN BUSINESS
ADMINISTRATION FOR THE SESSION (2017-2019) of Biju Patnaik
University of Technology , Odisha under my guidance. This project work is
original and not submitted earlier for the award of any degree /diploma or
associate ship of any other University /Institution .The thesis:

 Embodies the work of the candidate himself

 Has duly been completed
 Fulfils the requirements of the rules and regulation to the summer
internship of Institute ,
 Is up to the standard both in respect to content and language for being
referred to the examiner .

Place :
Date: Signature of the Guide
Prof. Bhagwan Behera

(Associate Prof.Finance)
 DECLARATION

I, Sarfaraz sha bearing Registration Number-1706258032 do hereby declare that the

project entitled “A Study on Unsecured Business Loan Appraisal Process of BAJAJ
FINSERV” is the original work done by me and submitted to Biju PatnaikUniversity
of Technology, Odisha in partial fulfillment of requirement for the award of Master in
BusinessAdministration is a record of original work done by me under the supervision
of Prof. Bhagwan Behera.

Regd. No. :-

Date:-

Signature of Student
 ACKNOWLEDGEMENT

“It is not possible to prepare a project report without the assistance &
encouragement of other people. This one is certainly no exception. “On the very
outset of this report, I would like to extend my sincere & heartfelt obligation towards
all the personages who have helped me in this endeavor. Without their active
guidance, help, cooperation & encouragement, I would not have made headway in
the project.

I am extremely thankful and pay my gratitude to my faculty MR. BHAGVAN

BEHERA for his valuable guidance and support.

I extend my Special gratitude to Dr. P. K. Tripathy, Principal of BIJU PATNAIK

INSTITUTE OF IT & MANAGEMENT STUDIES and Prof. Chandra Shekhar,
Placement Manager, for giving me this opportunity..

I also acknowledge with a deep sense of reverence, my gratitude towards my parents

and member of my family, who have always supported me morally as well as
economically.

At last but not least gratitude goes to all of my friends who directly or indirectly
helped me to complete this project report.

Any omission in this brief acknowledgement does not mean lack of gratitude

Thanking You

(SARFARAZ SHA )
 EXECUTIVE SUMMARY

The prime objective for taking up this project is to acquire knowledge of NBFCs and to
take a practical exposure and expertise of loan appraisal process. Loan appraisal process
is a process of the application for loan/funds on credit evaluated on its merits by a
bank/funder/funding institution etc. Among others aspects, the purpose of loan,
genuineness of its need, its quantum, borrowers repayment capacity, security etc are
assessed on some parameters before loan is actually granted.

The project explains the steps of loan appraisal process starting from the loan appraisal to
the loan disbursal in this report. There are two type of cases, one is Financial based and
the second is Non- Financial based consists of documents like KYC,ITR, etc. Then
comes the life of the credit analysis which is Credit Approval Memo (CAM) which is
crucial and most important for making proposal.

Financial Analysis basically arranges the customers financial data in a well-defined

manner so that it becomes easy for the credit analyst or the credit manager to interpret the
financial data of the customer and make the final call whether to give the loan or not.

CAM is maintained to access the risk of the applicant. It contains the history or
background of the applicant and guarantor as well as the customer category. The amount
of loan for how much periodic. tenure & on what rate, banking facility, details of the
collateral security are all mentioned in this CAM report on all this basis credit manager
takes the call.

I have studied the loan policies of Bajaj finserv. This project helps to know about
customer’s perception on Bajaj finserv funding because in today’s world competition it
helps in providing the better services to the customers and increases the efficiency of the
institution.
 CONTENT

CHAPTER-1 INTRODUCTION

SCOPE

OBJECTIVE OF STUDY

METHODOLOGY

LIMITATION

CHAPTER-2 COMPANY PROFILE

CHAPTER-3 BRIEF LITERATURE REVIEW

CHAPTER-4 DATA ANALYSIS and FINDINGS

CHAPTER-5 SUGGESTION AND CONCLUSION

CHAPTER-6 BIBLIOGRAPHY

CHAPTER-7 ANNEXURE: SAMPLE QUESTIONAIRE

 Chapter 1
1.1 INTRODUCTION

1.2 SCOPE

1.3OBJECTIVE OF STUDY

1.4 METHODOLOGY

1.5LIMITATION
 Introduction
Bajaj Finserv

Non Banking Financial Companies (NBFCs) are financial institutions that provide
banking services without meeting the legal definition of a bank i.e. one that doesn’t hold
a banking license. This institutions typically are restricted from taking deposits from the
public depending on the jurisdiction. Nonetheless, operations of this institution are often
still covered under a country’s banking regulations.

The specific banking product that can be offered by NBFCs depend on the jurisdiction
and may include services such as loans and credit facilities, savings products, investment
and money transfer services.

A Non Banking Financial Company(NBFC) is a company registered under the

Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition
of shares, stock, bonds hire-purchase, insurance business or chit business but does not
include any institution whose principal business is that includes agriculture or industrial
activity or the sale, purchase or construction of immovable property.

The working and operation of NBFCs are regulated by the Reserve Bank of India(RBI)
within the framework of the RBI Act,1934 (Chapter III B) and the directions issued by it.

SERVICES PROVIDED

NBFCs offer most sorts of banking services, such as loans and credit facilities, private
education funding, retirement planning, trading in money markets, underwriting stocks
and shares. These institutions also provide wealth management such as managing
portfolios of stocks and shares, discounting services e.g. discounting instruments and
advice on merger and acquisition activities. The number of non banking financial
companies has expanded greatly in the last several years as venture capital companies,
retail and industrial companies have entered the lending business. Non banking
institutions also frequently support investments in property and prepare feasibility,
market or industry studies for companies.

However they are typically not allowed to take deposits from the general public and have
to find other means of funding their operations such as issuing debt instruments.
NBFCs registered with the Reserve Bank of India may take part in the insurance agency
business on a free basis and without risk participation or the need to seek the bank’s
approval.

In a notification issued, the RBI said such NBFCs should obtain permission from the
Insurance Regulatory Development Authority and comply with IRDA regulations for
acting as a “Composite Corporate Agent” with insurance companies.

DIFFERENCE BETWEEN NBFCs AND BANKS

NBFCs perform function similar to that of banks but these are a few differences-

 NBFC cannot accept demand deposits

 NBFC is not the part of the payment and settlement system and as such
 NBFC cannot issue cheques drawn on itself , and
 Deposit insurance facility of the Deposit Insurance and Credit Guarantee
Corporation is not available for NBFC depositors, unlike banks.

Why are Non Banking Financial Companies Important?

India’s financial services sector is huge. It is not just comprise of commercial banks, but
also non banking financial companies (NBFCs). These firms offer a wide array of
financial services like loans, chit-funds, and are different from banks. NBFCs are often
small players that largely go unnoticed. However, they are still important to the economy,
especially in a developing country like India where 70% of the population lives in rural
area.

Size of Sector

The NBFC sector has grown considerably in the last few years despite the slowdown in
the economy. As of March 2013, it accounted for 12.5% of the country’s Gross Domestic
Product(GDP)- a measure of the size of the economy. This is up from 8.4% in March
2006. However this only counts NBFCs with assets more than Rs. 100 cr.

Growth
In terms of year-over-year growth rate, the NBFC sector beat the banking sector in most
years between 2006 and 2013. On an average , it grew 22% every year. Even when the
country’s GDP growth slowed to 6.3% in 2011-12 from 10.5% in 2010-11, the NBFC
sector clocked a growth of 25.7%. This shows, it is contributing more to the economy
every year.

Profitability

NBFCs are more profitable than the banking sector because of lower cost. This helps
them offer cheaper loans to customers. As a result, NBFCs’ credit growth – the increase
in the amount of money being lent to customers is higher than that of the banking sector.
Credit grew an average 24.3% per year for NBFCs as against 21.4% for banks. This
shows that more customers are opting for NBFCs.

Infrastructure Lending

NBFCs contribute largely to the economy by lending to infrastructure projects, which are
very important to a developing country like India. But they require large amount of funds,
and earn profits only over a longer time-frame. As a result, these are riskier projects. This
deters a lot of banks from lending to infrastructure projects. In the last few years, NBFCs
have contributed more to infrastructure lending than banks. NBFCs lent over 1/3rd or
35.8% of their total assets infrastructure sector as of March 2013.In contrast banks lent
only 7.6%.

Promoting Inclusive Growth

NBFCs cater to a wide variety of customers both in urban and rural areas. They finance
projects of small-scale companies, which is important for the growth in rural areas. They
also provide small ticket loans for affordable housing projects. All these help promote
inclusive growth in the country.

Scope

Bajaj group Limited is an Indian banking and financial services company headquartered
in Pune, Maharashtra. It has about 76,286 employees including 12,680 women and has a
presence in Bahrain, Hong-Kong and Dubai. Bajaj group is the first largest NBFC in
India as measured by assets.

Subsidiaries

BAJAJ Finserv is engaged in retail asset financing. It is a non-deposit taking non-bank

finance company (NBFC). Apart from leading to individuals, the company grants loans to
micro, small and medium business enterprises. It also runs call centers for collection
services to Bajaj group’s retail products. The company is promoted by Bajaj group Ltd
which has 96.49% shareholding in the company as on 31st March 2012. As of March 31,
2015, BAJAJ FINSERVFS had more than 1400 branches in 23 states and 3 Union
Territories. During the FY 2017-18, BAJAJ FINSERVFS had turnover of Rs. 9977.36
crores and profit after tax of Rs.698.77 crores.
BAJAJ FINSERV Financial Services Limited, a company, incorporated in Ahmedabad,
is a Registered Non- Banking Finance Company engaged in providing loans and other
financial services and governed by the India Companies Act, 1956. The financial
statement have been prepared in accordance with statutory requirement and in accordance
with the Companies Act, 1956. The accounting and reporting policies of BAJAJ
FINSERVFS Ltd used in the preparation of these financial statement conformed to
Generally Accepted Accounting Principles in India (“Indian GAAP”), the guidelines
issued by RBI from time to time and practices generally prevalent in the industry in India.

BAJAJ FINSERV Limited is a subsidiary company.

NBFC REGISTRATION

The Company has been registered as Non- Banking Financial Company (Non Deposit)
i.e. NBFC-ND by the RBI vide their letter dated December 31,2007.

INCREASE IN SHARE CAPITAL

The Company was incorporated on September 2009 with an initial paid-up share capital
of Rs. 7 Lakhs divided into 70,000 equity shares of Rs.10/- each. During the period
under review, the company has issued and allotted 1048.72 lacs equity shares of the face
value Rs.10/- each whereby it’s paid-up share capital has increased to 10494.20 lacs
divided into 1049.42 lacs equity shares of Rs.10/- each. The aforesaid increase falls
within the existing authorized share capital of the company. During the period under
review, the company has allotted 1000.00 lacs equity shares to Bajaj group Ltd which
constitute 95.29% of the total current paid-up share capital of the company. Thus, the
company has become subsidiary of Bajaj group Ltd.

BUSINESS
Bajaj finserv was incorporated on September,2009 and itreceived its Commencement of
Business Certificate on July 31, 2007. The company applied for registration certificate
with RBI and received the Registration on December 31,2007. The company has put in
place it’s Management Team. The company placed an order with Nucleus for it’s lending
system “Finn One”. The application has since been installed and UAT completed. The
company has also successfully implemented a GL system for it’s Finance Department
and a mail system for the employees. The company also prepared the business plan and
also finalized premises for it’s some of the branches, it’s CPU operations at Hyderabad
and Data Centre at Bangalore. First branch was started as Kodambakkam, Chennaiand
the CPU operations set up at Kukkatpally, Hyderabad. The company commenced
business by placing deposit with a corporate.

Products and Services of BAJAJ FINSERV

Loans– BAJAJ FINSERV offers a range of Loans in the Unsecured and Secured Loans
space that fulfils all the financial needs of its target Segment.

 Unsecured Personal Loans

The Loans are in the range of Rs 5,00,000 to Rs 25, 00,000/- . These loans are offered as
term loans will the maximum tenure at 48 months. Interest rates on these loans will be
higher than the rates on Secured Loans.

 Secured Loans

Secured loans are offered to customers to address larger loan requirements or longer
repayment requirements. Secured Loans are in the range of Rs 100,000 to 300,00,000.
These loans are offered as term loans with the maximum tenure at 120 months. These
loans are normally offered on a floating rate basis.

BAJAJ FINSERV provides loan against the following Collaterals as Security

 Commercial / Residential Property (LAP)

 Cars/Automobiles
 Shares
 Marketable Securities such as Bonds
 Gold Jewellery
 Commercial Vehicle Loans (New and Used Commercial Vehicles)

Objective of the Study

BAJAJ FINSERV is a corporate agent for HDFC Standard Life Insurance Company
Limited and BAJAJ General Insurance Company Limited. BAJAJ FINSERV sells
Insurance bundled with its Loan as a value-add as well as a standalone product. Insurance
in India has been traditionally bought by Mass Affluent segment for “Tax Deferment”
and long term savings. The company believes that its target segment has a huge appetite
for traditional risk cover policies.

Key Strengths of the Company

 Access to Cost Effective Funding:

The Company has access to cost effective funding because of its strong parentage and
conservative risk management policies. The Company maintains relationship with several
banks and financial institutions

 Experienced Management Team:

The Company has an experienced management team which is supported by efficient and
capable employee pool. The board comprises of senior professionals of Bajaj group who
have in depth experience in the financial services Industry and in Banking. The senior
management is composed of professionals who have deep understanding of the industry
and have extensive experience in financial services sector.

 Effective Risk Management policies:

The Company recognizes the importance of Risk management and has accordingly
invested in processes, people and a management structure. The risk committee of the
Company also reviews the asset quality at frequent intervals. Product policy programs are
duly approved before any new product launches and are fine tuned regularly. The asset
quality of the company continues to remain healthy and the Gross NPA of the company is
at 0.10% and Net NPAs are at 0.0.05% as of 31st March 2012.
Methodology

 Primary data ( Direct feedback from the customers)

 Secondary Data ( internet, Books and Journals)
 3C REPORT

OF

BAJAJ FINSERV
1.1 INCEPTION:-

Bajaj Finserv was formed in April 2007 as a result of its demerger from Bajaj Auto
Limited to further the Group’s interests in financial services. This demerger enabled
Bajaj Finserv to independently run the core businesses of Lending, Insurance and Wealth
Advisory. Bajaj Finserv Limited is the holding company for the businesses dealingwith
financial services of the Bajaj Group. Its insurance joint ventures with Allianz SE,
Germany, namely Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz
General Insurance Company Limited are engaged in life and general insurance business
respectively. Its subsidiary Bajaj Finance Limited is a Non-Banking Finance Company
engaged in consumer finance, SME finance and commercial lending and wealth
management.At Bajaj Finserv, we believe that good is the enemy of great. It is this belief
that shapes everything we do. Constantly reducing time and effort for the consumer, our
wide portfolio and innovative solutions are designed to make your life pursuits hassle-
free.

1.2ABOUT BAJAJ FINSERV:-

Bajaj Finserv was formed in April 2007 as a result of its demerger from Bajaj Auto
Limited to further the Group’s interests in financial services. This demerger enabled
Bajaj Finserv to independently run the core businesses of Lending, Insurance and Wealth
Advisory. Bajaj Finserv Limited is the holding company for the businesses dealing with
financial services of the Bajaj Group.
Its insurance joint ventures with Allianz SE, Germany, namely Bajaj Allianz Life
Insurance Company Limited and Bajaj Allianz General Insurance Company Limited are
engaged in life and general insurance business respectively. Its subsidiary Bajaj Finance
Limited is a Non-Banking Finance Company engaged in consumer finance, SME finance
and commercial lending and wealth management.
At Bajaj Finserv, we believe that the good is the enemy of great. It is this belief that
drives us to better our best selves every day. Our unmatched portfolio and innovative
solutions across lending, insurance and wealth advisory bears testimony to this belief.

Finance

Bajaj Finance Limited is the lending and wealth advisory arm of Bajaj Finserv Limited. It
is the most diversified non-bank in the country with 19 product lines across consumer,
commercial and SME finance, making it one of the most profitable companies in the
category.

Insurance

Bajaj Finserv Limited forayed into insurance through a joint venture with Allianz SE,
Germany, and formed Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz
General Insurance Company Limited.

Investment

Bajaj Finserv Wealth Management provides simple and effective long term financial
planning concepts and tools for assisting our customers in making informed decisions for
their saving and investment needs.

1.3 ABOUT BAJAJ GROUP:-

Bajaj Group is an Indian conglomerate founded by Jamnala l Bajaj in Mumbai in

1926. Started around eighty years back with a sugar factory in Lakhimpur Kheri of Uttar
Pradesh, the group has since diversified into a wide variety of business areas. The group's
first sugar plant was one among only 30 sugar mills that pioneered the establishment of
the sugar industry in India Bajaj Group is one of the oldest and largest conglomerates
based in Mumbai, Maharashtra.[4] The group comprises 37 companies and its flagship
company Bajaj Auto is ranked as the world's fourth largest two- and three-wheeler
manufacturer.[5] Some of the notable companies are Bajaj Auto Ltd, Bajaj Finserv Ltd,
Hercules Hoists Ltd, Bajaj Electricals, Mukand Ltd, Bajaj Hindusthan Ltd and Bajaj
Holding & Investment Ltd.[6] The group has involvement in various industries that
include automobiles (2- and 3-wheelers), home appliances, lighting, iron and steel,
insurance, travel and finance.

1.4 PRODUCT DETAILS:-

Bajaj Finserv Lending offers loans for various need. we offer loans for Bajaj Auto Two
wheelers under the Bajaj Auto Finance Ltd. We offer Consumer Durable Loans, Personal
Loan, Loan Against Property, Small Business Loans, Gold Loans, Loan Against
Securities, Housing Loan, Car loans and Insurance Service under the name of Bajaj
Finserv lending. Bajaj Finserv Lending is one of the most diversified NBFCs in the
market catering to more than 5million costumers across the world. Apart from well
recognized organization, they prouds us for holding highest credit rating FAAA/ stable
for any NBFC in the country today. The product offerings includes Consumer Durable
Loans, Personal Loan, Loan Against Property, Small Business Loans, Two wheelers And
Three Wheelers Auto Loans, Gold Loans, Loan Against Securities, Housing Loan, Car
loans, and Insurance Service .

 Organisational structure

 Mr. Sanjiv Bajaj (Chief executive officer, Managing director and Executive
director)
 Mr. S Sreenivasan (chief financial officer)
 Mr. Santosh Gadekar (Head of HR & operation)

 Mr. Kevin D' Sa (Business head)

 Mr. Ajay Sathe (Head of risk)
  Market statistics
 Loan upto 72monts
 Loan upto 40 lacs
 Fastest processing of loan
 Simple documentation
 Partial repayment facility
 Attractive intrest rate

COMPETITORS:

 HDFC
HDFC is a core banking but it offers also small loans and other things like micro
finance . So it makes a ciompetitor with Bajaj Finserv.
 Power finance corporation
Power finance corporation is financial backbone of power sector. It offers services
like financial consulting, Investment banking, loan management, etc
 Reliance capital
Reliance capital is one of 3 private financial services and banking companies in
terms of net worth. It offers services like Asset management, insurance, Broking and
distribution, Commercial finance, Mutual funds, etc
 Infrastructure development and finance compay
IDFC is a non banking financial sector which provides loans like finance foe
infrastructure, coprporate finance, mutual funds, etc
 Rural corporation
Rural electricity corp was listed among forbes magazine for company of the year
2010.It offers services like investment banking and asset management.
 M & M financial
 AS like other companies it provides financial services, micro fiancé, asset
management,etc
 Muthoot Finance
It is one of the largest NBFC in india. It is in number one company for providing of
gold loan.

 CUSTOMERS:
 Financial services for salaried person:
 Personal loan
 New to credit loan
 Gold loan
 Car loan
 Customer durable loan
 Financial service for self- employed
 Personal loan
 Business loan
 Car loan
 Gold loan
 Commercial vehicle loan
 Construction equipment loan
 Financial service for business
 Business loan
 Loans against share & securities
 Loans for construction projects
 Chapter-2
2.1 Company Profile
Company Profile

BAJAJ FINSERV APPRAISAL

Loan Appraisal With Regards to Bajaj Finserv Services
This project is done to understand, analyze and review the “Loan Appraisal System” at
Bajaj Finserv services. The Project is basically done to understand the process carried out
in the institution and the criteria set by the institution for obtaining the loan.

Introduction to loans
Loans are advances for fixed amounts repayable on demand or in installments. They are
normally made in lump sums and interest is paid on the entire amount. The borrower
cannot withdraw funds beyond the amount sanctioned.

A key function of the NBFC is deploying funds for income-yields assets. A major part of
the NBFC is loans and advances. Loans and advances are long term and short term credit
facilities to the various types.

LOANS
In finance, a loan is the lending of money from one individual, organization or entity to
another individual, organization or entity. A loan is a debt provided by an entity
(organization or individual) to another entity at an interest rate, and evidenced by
a promissory note which specifies, among other things, the principal amount of money
borrowed, the interest rate the lender is charging, and date of repayment. A loan entails
the reallocation of the subject asset(s) for a period of time, between the lender and
the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called

the principal, from the lender, and is obligated to pay back or repay an equal amount of
money to the lender at a later time.

The loan is generally provided at a cost, referred to as interest on the debt, which
provides an incentive for the lender to engage in the loan. In a legal loan, each of these
obligations and restrictions is enforced by contract, which can also place the borrower
under additional restrictions known as loan covenants. Although this article focuses on
monetary loans, in practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks for financial institutions such as
banks and credit card companies.

TYPES OF LOANS

Secured
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property)
as collateral.

A mortgage loan is a very common type of loan, used by many individuals to purchase
things. In this arrangement, the money is used to purchase the property. The financial
institution, however, is given security – a lien on the title to the house – until the
mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the
legal right to repossess the house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the
car, in much the same way as a mortgage is secured by housing. The duration of the loan
period is considerably shorter – often corresponding to the useful life of the car. There are
two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the
loan directly to a consumer. An indirect auto loan is where a car dealership acts as an
intermediary between the bank or financial institution and the consumer.

Unsecured
Unsecured loans are monetary loans that are not secured against the borrower's assets.
These may be available from financial institutions under many different guises or
marketing packages:

 credit card debt

 personal loans
 bank overdrafts
 credit facilities or lines of credit
 corporate bonds (may be secured or unsecured)
 peer-to-peer lending
The interest rates applicable to these different forms may vary depending on the lender
and the borrower. These may or may not be regulated by law. In the United Kingdom,
when applied to individuals, these may come under the Consumer Credit Act 1974.

Interest rates on unsecured loans are nearly always higher than for secured loans, because
an unsecured lender's options for recourse against the borrower in the event of default are
severely limited. An unsecured lender must sue the borrower, obtain a money judgment
for breach of contract, and then pursue execution of the judgment against the borrower's
unencumbered assets (that is, the ones not already pledged to secured lenders). In
insolvency proceedings, secured lenders traditionally have priority over unsecured
lenders when a court divides up the borrower's assets. Thus, a higher interest rate reflects
the additional risk that in the event of insolvency, the debt may be uncollectible.

BAJAJ FINSERV

Bajaj Finserv Limited, a non-banking financial company, provides financing, collection,

and insurance services in India. The company operates through Lending Business and
BPO Services segments. It offers unsecured loans, including business and personal loans;
loans against properties, gold jewelry, securities, and shares; loans for ESOPs; and
enterprise business, consumer durables, car, construction equipment, and commercial
vehicle loans. The company also provides various life insurance products; and general
insurance products, such as motor, health, critical illness, travel, home, and personal
accident insurance, as well as end to end collection services through collection call
centers. It operates 1400 branches in 115 cities. The company was incorporated in 2009
and is based in Mumbai, India. Bajaj finserv Limited is a subsidiary of Bajaj Group
Limited.
 Loan against
securities

Loan against
Shares

Secured loans
Loan against
Property

LOANS Loan against

Gold
Unsecured
loans
Bajaj finserv Car Loans

INSURANCE Enterprise
Business Loan

Life Insurance
Equipment
Loans

General
Insurance Personal loans

Business Loans

LOANS (Apply now and live your dreams!)

Whether it is business expansion or a working capital requirement, money for your

children's school admissions, daughter's wedding or a dream vacation – our range of
loans can help you fulfill your needs and dreams alike.

We, at BAJAJ FINSERVFS, have dedicated professionals who work for you and appraise
your exact requirements. Our efforts are directed towards understanding your
requirements, and structuring loan solutions accordingly.

FEATURES AND BENEFITS

  Loans up to Rs. 5 Cr for any purpose.
 Repay in easy EMIs
 Flexible repayment options, ranging from 12 - 120 months
 Hassle-free documentation and speedy loan processing
 Service at your doorstep
 Competitive insurance scheme to protect your loan
 Complete transparency in processing-no hidden costs
 Friendly and high-on-integrity customer service

Bajaj finserv offer:

 Unsecured Loans (Personal Loans, Business Loans)

 Secured Loans (Loan against Property / Auto Refinance)
 Commercial Vehicle Loans
 Loans against ESOP and Shares
 Loans against Securities (NSC / KVP / LIC)
 Loans against Mutual Funds
 Loans against Gold

Advantages of Bajaj finserv:

 One-stop shop for all your loan requirements
 Personalized solutions – we work with you to structure a loan solution based on
your requirements
 Doorstep service – our employees assist you on all documentation, at your
doorstep
 Quick turnaround – loan approvals within 72 hours of receiving the documents
 Single window service – dedicated service for all your loan requirements and
queries

Secured Loans

Investments not only help grow your wealth, they also come in handy when you need
immediate financing solutions. At Bajaj finserv, we value your investments and financial
goals. That is why when you need a quick loan for personal and business needs, you can
turn to us.
While most secured loans in the market need demanding collaterals, our extensive range
gives you the choice to declare a variety of assets. Long and short term investments,
equities, bonds, ESOPs, commercial vehicles, property, gold, and jewellery - we accept
almost all your prized possessions as guarantee. At Bajaj finserv, we make dreams
possible.
 Loan against Securities

At Bajaj finserv , we understand how much you value your investments and want them to
remain as your long term investments. With our Loan against Securities offer, you can
meet immediate cash requirements without having to liquidate the securities.
FEATURES & BENEFITS

If you have any of the following securities, you can avail the loan:

 Mutual Fund units

 Fixed maturity plans
 Exchange traded funds
 Insurance policies
 Bonds
 NSC
 KVP
 Simple and hassle-free loan process
 Loans up to Rs. 50 Lakhs
 No hidden charges

 Loan against ESOPs and Shares

While being part of the Employee Stock Ownership Plan (ESOP) is a definite asset, you
can now utilize it to meet your liquid cash requirements. Avail of our Loan against
ESOPs and Shares without parting with any of the benefits.

FEATURES & BENEFITS

 Loan of up to 70% of the value of shares

 Option of EMI-based repayment or interest only payment
 Instant credit
 Attractive interest rates
 Shares can be pledged from any Depository participant across the country
  Simple and hassle-free

 Loan against Property

Loan against Property is an ideal way to utilize and leverage your property to its full
potential. It will help you fulfill your dream of taking your business to the next level. You
can mortgage your Residential or Commercial property to meet your financial
requirements.

FEATURES & BENEFITS

 Loans up to Rs. 8 Crore

 Loan up to 60% of the market value of the property
 Tenor up to 180 months
 Attractive interest rates
 Simple and speedy processing
 Balance transfer facility - Lets you retire your high cost debt
 Loan against Rent Receivables - Lease rental discounting
 Loans to purchase a new shop or office for your business

 Loan against Gold

Gold is a prized possession and this prized possession can yield you great returns without
having to liquidate it. Avail Loan against Gold from Bajaj finserv and reap huge benefits.
FEATURES & BENEFITS

 Tenor up to 48 months
 Loan up to Rs. 20 Lakhs
 Loan up to 75% the value of gold.
 Attractive interest rates
 Safety and security of your gold jewellery
 Flexible repayment options
 No hidden charges

 Commercial Vehicle Loans

At Bajaj finserv, we understand our customers’ requirements and provide Commercial

Vehicle loans which help him grow his business. Our loan process is simple and hassle
free. Our plans are easy to understand minus any hidden costs.
Company provides finance to a broad spectrum of customers, which include:
 Large, medium and small-size fleet owners
 Individuals
 First time users
 Partnership firms and proprietorship firms.
 Private and public limited companies

FEATURES & BENEFITS

 Tenure up to 60 months
 Financing for bus, trucks, light commercial vehicles and small commercial
vehicles
 Finance for used vehicles
 Top-up on existing vehicle loans
 Customized financing solutions to meet individual requirements
 Simple documentation and easy processing
 Assistance for purchasing the vehicle

 Construction Equipment Loans

At Bajaj finserv, we understand our customers’ requirements and provide Commercial

Equipment loans which help him to pursue his own path to success. With greater thrust
on Infrastructure development in India, we cater to the growing needs of our customers
with an array of attractive finance schemes to suit their varying requirements.
Company provides finance to a broad spectrum of customers, which include:
 First time users
 Hirers of construction, earthmoving and material handling equipments& plant
hirers
 Small and medium contractors of government and private agencies, i.e., irrigation,
public works department, national and state highways etc
 Small and medium quarry/mine owners/operators
 Contractors of various civic and municipal bodies
 Waste management contractors
 Small and medium industries requiring construction and material handling
equipments for captive usages

FEATURES &BENEFITS
  Tenor up to 48 months
 Financing for a whole range of construction equipment, such as loader backhoe,
excavators, wheeled loaders, cranes, fork lift trucks, concrete machineries and
road equipments
 Up to 100% finance on asset cost
 Finance for used vehicles (Re-finance & Re-purchase)
 Top-up on existing vehicle loans
 Customized financing solutions to meet individual requirements
 Simple documentation and easy processing

Unsecured Loans

BAJAJ FINSERV Financial Services offers unsecured loans for personal and business
needs. With just a few documents that you need to submit, basic eligibility criteria that
you need to meet, you could get a loan without collateral or a guarantor.

With competitive interest rates, doorstep service, and loan limits of up to Rs. 40 lakh,
there is nothing that can come in the way of your dreams.

 Personal Loans

With BAJAJ FINSERV Financial Services Personal Loan, get a step closer to planning
your dream wedding, a dream vacation, renovating your home or funding your child's
education. We have an ideal solution that lets you dream big.

FEATURES & BENEFITS

 Loans up to Rs. 20 Lakhs

 Tenor ranging from 12 to 60 months
 No guarantor/security required
 Convenience of doorstep service
 Quick and Speedy processing
 Attractive Rate of Interest
 Minimum/Hassle free Documentation
 Special offer for employees of select companies

 Business Loans
Do you own a business that is in need of funds for expansion? Or do you have a big
business order in hand and require funds for some working capital?

If you can relate to any of the above situations, then a Business Loan is the right solution
for you. Our team of dedicated professionals helps you determine your requirements,
especially for small businesses; and you can get started within the shortest possible time.

FEATURES & BENEFITS

 Loans up to Rs. 30 Lakhs

 Tenor ranging from 12 to 60 months
 No guarantor/security required
 Convenience of doorstep service
 Attractive Rate of Interest
 Minimum/Hassle free Documentation
 Special offer for self employed Doctors

Insurance

Life is but a sum total of hopes, promises, dreams and achievements. While we work
towards fulfilling these aspirations, we must also prepare for situations that are
unplanned, which may leave those we love with an uncertain future. To tide over such
predicaments, BAJAJ FINSERVFS offers you a wide range of insurance solutions.

Serving 3 major purposes of protection, investment and tax-saving, we have a plan to suit
each of your needs. Life insurance plans help you progress through each step of your life
with complete security, and general insurance plans help you take care of the things you
hold dear.

With the BAJAJ FINSERVFS advantage on your side, be assured that you will always be
ready for life's challenges.

Life Insurance

Life insurance has changed enormously over the years. In addition to conventional life
insurance, today's uncertain world requires a wider range of solutions that don't just cover
your life, but also give excellent investment options with higher returns in the short and
long terms.

At BAJAJ FINSERV Financial Services, we have child plans to secure the future of your
child, pension plans that help you retire in style and live the life you always lived, growth
 plans, and stable plans. Our comprehensive list of life insurance solutions is everything
you ever wanted.

General Insurance

At BAJAJ Financial Services, we have solutions for almost every emergency life may
throw at you. Whether it is insuring your vehicle against accidental damage, providing
strong financial support during a medical crisis, or being with you wherever you travel –
we do it all.

With no-claim bonuses, multiple premium payment options, affordable solutions, and
24x7 assistance, general insurance doesn't get better than this.

Financial Highlights:

Particulars 2013-14 2014-15 2015-16 2016-17

Total revenue 1,688.27 2,527.26 3,302.02 5,714.54
Profit before tax 318.07 530.28 817.81 1058.59
Profit after tax 209.24 349.45 534.41 698.77
Assets under 13,560 19,290 25,906 34,277
Management
Shareholders’ 1,628.50 3,125.13 3,561.80 5,362.90
funds
Borrowings 11,075.00 15,277.97 19,612.15 25,287.05
Earnings per share 4.32 6.63 7.64 9.64
(`)
Book value per 31.70 44.68 50.87 68.73
share (`)

FINANCIAL ANALYSIS:

Company posted total income and net profit of 3,302.02 crores and 534.41 crores,
respectively, for the financial year ended March 31, 2016, as against 2,527.26 crores and
349.45 crores, respectively, in the preceeding year.

Company has achieved robust growth during the preceding years and particularly in the
financial year2015 -16. Keeping this in mind, your Directors had declared an ‘interim
dividend’ of Re. 0.60 (Paise Sixty only)per equity share i.e. 6% (Six percent) on each
Equity Share of ` 10/- (Rupees Ten only), entailing a payout of50.56 crores, including
dividend distribution tax. The ‘interim dividend’ was paid to all the shareholders of the
Company.

Further your directors are pleased to recommend a final dividend of Re. 0.60 (Paise Sixty
only) per equity sharei.e. 6 % (Six percent) on each Equity Share of ` 10/- (Rupees Ten
only), entailing a payout of ` 50.56 crores,including dividend distribution tax. The
dividend would be paid to all the shareholders, whose names appear onthe Register of
Members / Beneficial Holders as on the Book Closure date.
Process of Credit Appraisal
Reciept of application from the applicant

Receipt of documents (Balance sheet, KYC, Gas receipt,Bank balances, Stability proof)

Pre sanction visit by the credit officer (Personel Discussion)

Check for the RBI defaulter list, CIBIL check, POSIDEX, ITR check

Preparation of CAM (credit approval memo)

Preparing the financial data

Assessment of thr proposal (ABB bank balance, gross income)

Sanction/Approval of proposal by concerned authority

Final assessment of documentations,mortgages,agreemebts

Disbursement of loan

Post sanction activities such as bank account review

 Chapter 3
3.1 Literature Review
Literature Review

Catholic Syrian BankWith the Swadeshi Movement of early 20th century as its base,
Catholic Syrian Bank was incorporated on 26th November 1920, in the Thrissur district
of Kerala. The bank commenced its operations on 1st January 1921, with an authorized
capital of Rs. 5 lakhs and a paid up capital of Rs. 45270

. Dhanalakshmi Bank The foundation of Dhanalakshmi Bank Limited was laid down
on 14th November 1927, in the Thrissur district of Kerala. A group of innovative
entrepreneurs had started the bank with a capital of Rs.11,000 and only 7 employees.

Federal Bank Federal Bank Limited was founded as Travancore Federal Bank
Limited in the year 1931, with an authorized capital of Rs. 5000. It was established at
Nedumpuram, a place near Tiruvalla, in Central Travancore (a princely state later merged
into Kerala), under Travancore Company's Act.

Bajaj group Housing Development Finance Corporation Limited, more popularly

known as Bajaj group Ltd, was established in the year 1994, as a part of the liberalization
of the Indian Banking Industry by Reserve Bank of India (RBI). It was one of the first
banks to receive an 'in principle' approval from RBI, for setting up a bank in the private
sector.

ICICI Bank ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an
Indian financial institution, in 1994. Four years later, when the company offered ICICI
Bank's shares to the public, ICICI's shareholding was reduced to 46%. In the year 2000,
ICICI Bank offered made an equity offering in the form of ADRs on the New York Stock
Exchange (NYSE). CHAPTER 1: PROBLEM DEFINITION & APPROACH TO THE
PROBLEM Brand Management in Banking Industry with Special Focus on Corporate
Branding of Banks: A Case Study of Corporate Banks Operating in Gujarat State Page14

ING Vysya Bank ING Vysya Bank Ltd came into being in October 2002, when
erstwhile Vysya Bank Ltd was merged with ING, a global financial powerhouse boasting
of Dutch origin. Vysya Bank Ltd, one of initial banks to be set up in the private sector of
India.

Jammu & Kashmir Bank The origin of Jammu and Kashmir Bank Limited, more
commonly referred to as J&K Bank, can be traced back to the year 1938, when it was
established as the first state-owned bank in India. The bank was incorporated on 1st
October 1938 and it was in the following year (more precisely on 4th July 1939) that it
commenced its business, in Kashmir (India).
 Chapter 4
4.1 DATA ANALYSIS & FINDINGS
Research Methodology
 Data collected:- Primary data
 Analysis :- Trend Analysis, Ratio Analysis
 Sample Size :- 50 Random Samples

Data Analysis
“A Study on customer perception towards BAJAJ FINSERV funding”
 To study the demographics of BAJAJ FINSERV financial services
 AGE

Age
Below 25 25-35 35-45 45-55

45-55 7
35-45 20
25-35 18
Below 25 5

So, as I have taken the survey by the structured questionnaire i.e. primary data, personally
interviewed the customers and come to know that the customers who is taken loan or who
is applying for the loan is of the age of mainly 35-45 years the reason behind this as they
want to expand their business, they want to add some new products or they require it for
the smooth working capital of the business.
 GENDER

Gender
Male Female
4%

96%

It is clearly visible from the pie chart that the mostly or the maximum who applied for the
loan or who want the loan is male as they are those who are running their business. There
are only 4 percent of females who want credit or they are the main applicant of their
husband’s loans.

 Model of the Customer

Model of the Customer

Professional Salaried Self-Employed Others

Others 2

Self-Employed 12

Salaried 33

Professional 3

0 10 20 30 40
As I have done my summer training in BAJAJ FINSERV financial where the applicant
have their own business or self-employed, salaried mainlyGovernment Employees, few
were professionals.They are applying for the loan as they have different needs for the
money.

 Acquirement of Loan

Acquirement of Loan
Other 2
Personal Loan
Gold Loan 1
Business Loan
Loan Against Property 3
Car Loan Car Loan
8
Business Loan 12 Loan Against Property

Personal Loan 24 Gold Loan

Other
0 10 20 30

Acquirement of loans here shows that the number of person from the sample of 50 has
been taken different loans as per their requirement. About 48% of sample has taken
personal loan, 24% business loan, 16% car loan and rest 12% acquired other loans.

 Accommodation of Loan by Banks

Accomodation of Loan
Other 2 SBI
Axis 4 HDFC
ICICI 7 ICICI
HDFC 11 Axis
SBI 26 Other

0 5 10 15 20 25 30
The above chart shows the number of person who has taken loan from different banks.
The 26 customer out of 50 were taken loan from SBI, 11 from HDFC, 7 from ICICI, and
other. The loan which has been taken by SBI are mostly Government Employees.

 Already financed by BAJAJ FINSERV Financial services

Finance from bajaj finserv

Yes No

28%

72%

About 72% of person out of sample were not financed by BAJAJ FINSERV Financial
Services. The reason of non-finance is the lack of awareness about the BAJAJ FINSERV.
The 28% of people know about the bank through friends, and as a part of Bajaj group.

 Services provided by BAJAJ FINSERV financial services

Services provided by Bajaj finserv

Excellent Good Satisfactory Bad Very Bad

Very Bad 1
Bad 7
Satisfactory 22
Good 19
Excellent 1
Services provided by BAJAJ FINSERV shows here how the customers feels about the
services or the facilities provided by BAJAJ FINSERV so 22customers out of 50 feels
that the services provided by the financial institution is satisfactory and 19 shows trends
towards good so maximum of customers are on this side so it is good for the BAJAJ
FINSERV that the customers are happy which their services like the documentation
facilities, the rate of interest provided, reimbursement of loan etc so these are the services
or the facilities provided by the financial institution.

 ROI provide by BAJAJ FINSERV

ROI By Bajaj finserv

Strongly… 31 Strongly Agree
Disagree 6 Agree

Neutral 4 Neutral
Disagree
Agree 7
Strongly Disagree
Strongly Agree 2

0 10 20 30 40

ROI (Rate of interest) is the rate of interest which is charged by the financial institution
for the amount or loan given by them. So the interest charged by the BAJAJ FINSERV is
not satisfied by customers as 31 out of 50 customers say that the ROI is high because
they were getting at a low interest rate mostly by SBI.
FINDINGS

 Provision of Loan is a very important side of the coin for both the borrower
and the institution as borrower needs money for their working capital or for
their business expansion and for the institution it is a medium to earn in terms
of interest.
 Credit in NBFC in comparison with the banks works or deals on high risk high
return concept.
 Credit appraisal is the main part of the whole NBFC on which they works so it
is an important task for credit team as well as all otherwise it make a issue in
the work of collection.
 Credit and risk go hand in hand.
 For each type of loan, there are different types of parameters.
 After studying few cases, I found that in some cases, loan is sanctioned due to
strong financial statements.
 After studying, it has been found that the loan taken by people belong to a
Government Salaried.
 There is a high interest rate for personal loan as compare to other nationalized
banks.
 There is lackof awareness about the BAJAJ FINSERV Financial Services
among people.
 Peoples are more interested to finance through government sector banks rather
than private.
 Some of the people were interested on car loans as the interest rate is 6%.
 Government job holders are preferring to SBI bank as they are getting loan at a
low interest rate i.e. 8%.
 Chapter 5
5.1 Suggestion and Conclusion
SUGGESTION

 Must conduct awareness campaign

 According to people BAJAJ FINSERV has to reduce its interest rate in
some cases like, personal loan.
 Documentation process for some cases like business loan have to make
simple.
 To open more branches as people required loan from other areas where
Bajaj finserv is not present

CONCLUSION

After 45 days of working in this I can conclude that credit appraisal is most important
aspect of NBFCs as it is the blood of the organization. Different type of customers comes
with their different types of needs of money or loan but it is not possible to give loan to
everyone so for that credit team checks each and every legal aspect or norms and
guidance provided by the company. But anyways company is more focusing in doing the
business which includes the concept of high risk and high returns so; sometimes it is
good for the company, sometimes not as it also depends on the market situation. Working
with the credit department in this NBFC is a great learning for me many things learnt
from this experience like preparing the portfolio of the applicant before giving the loan
make sure from the company side that the customer is loyal and will not default in future,
preparing the financial data and assessment of that financials as the case is on normal
income or banking surrogate. So it’s a great experience for me to work here.
 Chapter 6
5.1 Bibliography
Bibliography

4 http://www.iloveindia.com/finance/bank/nationalised-banks/index.html

4 http://www.iloveindia.com/finance/bank/nationalised-banks/index.html

5 http://www.iloveindia.com/finance/bank/foreign-banks/index.htmhttp

6 http://www.moneycontrol.com/stocks/company_info/company_history.
 Chapter 7
7.1 Annexure
Annexure

I am Sarfaraz sha , doing MBA from BIITM; BBSR. I am preparing a project report on
‘A Study on Loan Appraisal Process of BAJAJ FINSERV. For this I have designed a
questionnaire to know your views. Please fill the given as per your thinking and
experiences.

1) Name: __________________________________

2. Age:
□ Below 25
□ 25-35
□ 35-45
□ 45-55
3. Gender:
□ Male
□ Female
4. Occupation:
□ Professional
□ Self-employed
□ Salaried
□ Others
5. Which income group do you belong? (Per annum)
□ Below 2 lakhs
□ 2-4 lakhs
□ 4-6 lakhs
□ 6 lakhs and above
6. Have you taken any loan?
□ Yes
□ No
7. What type of loan has been taken?
□ Personal Loan
□ Business Loan
□ Car Loan
□ LAP
□ Gold Loan
□ Other
8. If yes, from which bank the loan has been taken?
 □ SBI
□ HDFC
□ ICICI
□ Axis
□ Bajaj finserv
□ Other
9. Why did you prefer this bank?
□ Low interest rate
□ Ease of repayment
□ Ease of processing
□ Others
10. Currently do you have any requirement of loan?
□ Yes
□ No
11. Are you aware of Bajaj finserv?
□ Yes
□ No
12. How do you come to Know about Bajaj finserv?
□ Advertisement
□Friends
□ BAJAJ FINSERVFS website
□ Others
13. In near future would you be interested to take loan from Bajaj finserv?
□ Strongly Agree
□ Agree
□Disagree
□ Strongly Disagree
14.The ROI provided by Bajaj finserv
is very high :
□Strongly Agree
□Agree
□Neutral
□Disagree
□Strongly Disagree