Report on Two Wheeler Trends- Pan India

TW report for the months covering June & July

This report studies the two wheeler collection contracts, trends and issues faced by agents across centres in the country.

TABLE OF CONTENTS

S.No Particulars Page Number

1 Introduction – Mission, History & Group Profile

2-4

2 Summary NA

3 Two Wheeler Financing-Operations 5

4 Business structure, features and Examples

6,7

5 Business – Two Wheeler 8,9

6 Analysis 10-16

7 Findings 18

7 Remarks 19

1

HINDUJA LEYLAND FINANCE LIMITED

INTRODUCTION

The mission of the organisation is to grow its business on sound lines to create value for all our stakeholders; via shareholders, customers, employees and society as a whole.

With an aspiration to the best in vehicle financing and Non-Banking Financial corporation in the country apart from which it expects to fulfil the following objectives of –

Preferred financier for all customers and dealers. Forerunner in the market place in terms of profitability,

productivity and efficiency as measured by ROA, ROE, NIM, Cost to Income Ratio and Net NPAs.

Institution where we act ethically, honestly and with transparency in all our dealings, be it with our employees, customers, shareholders, the community we serve, Regulators and the Government.

The institution believes in the use of technology to extend excellent customer service, standardised operating processes at all branches and the exercise of rigorous risk management practices across credit, operational and market risks.

It emphasizes on the empowerment of its employees to deliver consistently superior business results with pride and sense of achievement and in instating sustainable practices and corporate social responsibility aiming at financial inclusion.

2

History

Hinduja Leyland Finance Ltd (HLF) was incorporated in the year 2008 and is

registered as a non-deposit taking NBFC with Reserve Bank of India. It is one

of India’s leading non-banking finance companies spread across 20 states pan-

India with 1100+ locations. Through a vast network of branches, it provides

customized finance for the widest range of utility vehicles, tractors, cars, two

wheeler and other commercial vehicles, focusing on the semi-urban and rural

sector.

Hinduja Leyland finance is a conglomerate of "HINDUJA GROUP" which has

global presence in Automobiles, Energy & Chemicals, IT/ITES, Banking and

Finance, Media/Entertainment and Infrastructure.

HLF aims to enable people fulfil their ambition of owning their own vehicle.

We think of ourselves, not as a simple loan provider, but as a partner in your

quest to fulfil your biggest ambitions in life and in business. We offer an

exhaustive suite of vehicle financial solutions –Commercial vehicle finance,

Personal Vehicle finance, Construction Equipment Finance, Rural finance loans

etc. What’s unique with our business model is that, we provide an easy-to-use

loan calculator with which one can decide on the tenure, interest rate and the

loan amount that best suits you.

HLF’s goal is to be a one stop shop in the space of vehicle and equipment

finance.

3

GROUP PROFILE

4

Privately-owned by the Hinduja Family

Building businesses and serving society for

nearly 100 years

Entered Europe and the US in 1970s

Diversified holdings across 10 industry

verticals

Operations in over 35 countries

Products and services available in more than

100 countries

Employs over 72,000 personnel

The Group has holdings in six publicly-

traded entities with a combined market cap of

~$5 Billion; majority of the Group's holdings

are privately held

OPERATIONS

HLF is into commercial vehicle loan financing business. We offer a wide range of products to suit the customer need’s at affordable cost. HLF has 1100+ locations as on date spread across 20 states in India.HLF put in place a process which is evolved on the principle laid down here in, our enterprise solution seeks to provide a comprehensive understanding of the business process governing the financing of vehicles. Underlying theme or the objective of this application is to enable even a new entrant to the business to understand business risks, his role and the role of other participants in the process. Every activity underscores in its process the role of the maker, checker and reviewer.In order to minimize the time taken for review by three layers in every process, we have, through technology, achieved reduced / minimum flow of documents physically. In many of the processes the checkers role is embedded in the validation mode in the system so that there is no physical verification is necessary for ensuring accuracy.

5

BUSINESS STRUCTURE

The business structure can be seen to be very highly specific and they are segmented as to be:

The chart is a diagrammatic representation of the organisational span of control

They are managed under the possible specific divisions of-

6

State Business Head

State Vertical Manager - TW

(Product Manager)

Branch Vertical Manager - TW

(Product Incharge)

Product Executive

CSA / MA CSA / MA

Risk Management Executive

Product Executive

CAS / MA Location Executive (L1 Location)

Risk Management Executive

FE / CA

State Credit Manager

PE would manage his own location (L3) and in addition manage up to 7 L1 /

L2 locations

Area of operations of these 8 Locations would be within a radius of 100 kms

Each Location would operate within a geo limit of 10 kms

Enquiry Register

The table is a sample which shows the list which represents the customer enquiry records.

Given Below is an reference of major three functions that are present in the Two wheeler segment

7

COLLECTION SYSTEM FOR TWO WHEELERS

Modes of collection involved:

• Presentation of ECS / PDCs :

Uses the ECS Tracker & PDC Tracker reports in ERP and monitor

collections for all cases.

• Cheque Bounce Collection :

Get MIS on Cheque Bounces for every cycle date from HO

Get messages from Call Centre on customer commitments for

payment against cheque bounces – SMS being sent to Collection

Executives while mail sent to PE

Maintain Collection Diary – Executive Wise

8

Lead - Tracking

Field Investigation

Diarise the commitments – Executive Wise

Remind the Executives for collecting as per Customer

Commitment

Ensure all bounces are collected before 20th of the month

Protocol Issued for Collection

• Every Collection Executive should have a Demand List where contracts allocated to him are listed bucket wise – ‘TW Trend Incentive Report’

• This list contains the details of all the borrowers who have to be contacted and money to be collected:

Name and Address of the Borrower

Contact details of the Borrower

Asset Financed

Total Amount to be collected

• Set collection target at the beginning of the month (immediately after the DL is run for the month)

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Target fixing should be based on no of EMIs to be collected in each bucket (Explained in detail separately)

• Review collections on daily basis

Review the collection diary of the Executives for day wise commitment vs actual collections

Also monitor his performance over the past three months using ‘Trend Incentive Report”.

Trend Analysis & ObservationsMaharashtra

Say for E.g.:

5 Locations from each state is been selected and looked into for the purpose of trend analysis and to check for the reasons of their non-collection upon a brief telephonic survey that was conducted. Given below is the table containing the report for the state of Maharashtra.

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Hub Location 01-Jun 02-Jun 05-Jun 07-Jun 10-Jun 14-Jun 15-Jun 16-Jun 17-Jun 18-Jun 22-Jun 23-Jun 24-Jun 25-Jun 26-Jun 28-JunPUNE PUNE 184 177 459 392 316 315 345 287 345 335 296 293 280 270 259 251

AURANGABAD JALNA 39 39 50 50 48 45 45 39 39 39 33 34 34 34 36 36AURANGABAD Waluj 58 58 102 91 71 70 68 45 64 64 55 54 52 51 51 47AURANGABAD Karmad 115 114 180 148 123 120 120 71 117 117 112 113 112 111 111 111AURANGABAD AURANGABAD-MH 195 189 293 272 226 230 220 103 219 219 199 199 193 188 185 185

MUMBAI DHULE 0 0 3 3 3 2 2 2 1 1 1 1 1 1 1 1MUMBAI VIRAR 12 11 26 22 17 17 17 14 16 16 16 16 16 16 16 15MUMBAI SINNAR 16 16 58 23 14 14 14 8 14 14 14 16 16 16 16 16MUMBAI NASHIK 36 35 116 103 48 41 41 40 37 36 31 30 29 28 27 27MUMBAI Niphad 17 16 12 8 23 22 22 22 12 10 8 9 9 9 9 9

AURANGABAD NANDED 46 45 4 3 52 50 51 46 51 51 50 51 50 50 47 47MUMBAI MUMBAI 27 22 53 48 29 28 26 19 25 24 22 21 20 19 19 17

The chart also shows the trends relating to the state of Maharashtra with specifics relating to the regions of Pune, Jalna, Waluj, Karmad, Aurangabad, and Dhule. It shows us the different variations with respect to the specific dates of 4th of June and 16th of June where they rise and fall respectively.

Some of the main reasons for such rise and fall can be specifically drawn towards the reasons of Customer not being traceable and customer’s embezzlement of vehicle and other ancillary issues.

01-Jun03-Ju

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500 PUNE 8975897400 SANJAY MOREJALNA 9764364232 MANOJ DAHIHANDEWaluj 9225328747 SUMIT WASKARKarmad 9764364232 MANOJ DAHIHANDEAURANGABAD-MH 9423185445 SHASHANK DANIDHULE 9823985010 NITIN VARMAVIRAR 9820167533 SAMEER PALAVSINNAR 8237009908 VINOD GAIKWADNASHIK 8237009908 VINOD GAIKWAD

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The following chart represents the trends for no payment collection contracts in the area of Punjab.

Punjab

The table below shows for the No payment contracts that are due over a period

of one month. This chart represents the trends which follow the designated

regions of Chandigarh, Ludhiana & Jalandhar. It also shows us the trends spread

across the month of June. Levels are held steady and there are no seemingly

alarming variations witnessed. The No payment contracts possibly come from

reasons arising from Shortage of Manpower, market slump, wrong credit and

other ancillary issues associated along with. The trends are pretty much similar

in terms of their observance. The contracts levels are steady hence prove that

the specific variations arise due to reasons of extraordinary conditions such as

customer shifts and vehicle embezzlement.

PE Hub 01-Jun 02-Jun 05-Jun 07-Jun 10-Jun 14-Jun 15-Jun 16-Jun 17-Jun 18-Jun 22-Jun 23-Jun 24-Jun 25-Jun 26-Jun 28-JunANKUSH KOUNDAL CHANDIGARH 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

CHETAN MALHOTRA LUDHIANA 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4KULDEEP SHAMA JALANDHAR 2 2 3 3 3 4 4 4 4 4 4 4 4 4 4 4MANISH KASHYAP CHANDIGARH 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4RAKESH SHARMA LUDHIANA 3 3 5 6 6 6 6 6 6 6 7 7 7 7 7 7

SANBIR SINGH GILL JALANDHAR 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4SUMIT KAUSHAL CHANDIGARH 5 5 6 6 6 5 5 5 5 5 5 5 5 5 5 5

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01-Jun03-Ju

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ANKUSH KOUNDAL CHANDIGARHCHETAN MALHOTRA LUDHIANAKULDEEP SHAMA JALANDHARMANISH KASHYAP CHANDIGARHRAKESH SHARMA LUDHIANASANBIR SINGH GILL JALANDHARSUMIT KAUSHAL CHANDIGARH

Rajasthan:

Given below is the table showing the No-Payment collection for the specific

time period of 1 month (June), it also shows us the pattern of collectibles that

fall over this time frame. We can also find that the respective fall occurs due to

said reasons of -

BIKANER 231 225 459 306 287 285 281 235 266 304 250 244 243 235 234 231ANOOPGARH 5 4 9 9 9 7 7 7 7 6 6 5 5 4 4 4

BAJJU 58 56 76 52 58 58 58 42 57 57 57 58 57 55 54 54CHITTORGARH 34 34 75 42 47 46 46 37 42 40 37 36 35 34 34 34

BALOTRA 54 54 48 18 57 55 55 45 55 55 55 57 57 56 56 56BARMER 13 12 12 9 9 9 9 6 9 9 9 10 9 9 9 9AJMER 92 90 177 129 131 124 123 106 122 121 109 108 107 106 104 100

JHUNJUNU 110 110 75 60 135 133 132 104 126 122 110 112 110 109 105 104

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The chart below helps us study the trends occurring over the month of June.

There is a general rise noted during the time period of 4th of June and a fall

during the 16th of June. They could largely be due to the reasons of

01-Jun06-Ju

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50100150200250300350400450500

BIKANER Ashok KumarANOOPGARH Ashok Kumar BAJJU Ashok KumarCHITTORGARH Ajay Singh Shaktawat

BALOTRA Kapil Joshi

BARMER Kapil Joshi AJMER Rajkumar SisodiaJHUNJUNU Devendra Kumar

UTTARAKHAND & ORISSA:

The following table represents the trend for the regions of Cuttack, Jajpur, Nimapara, Bhubaneswar and Puri belonging to the state of Orissa. The trends are being plotted in a chart which follows below. The region of Uttarakhand is represented by the area of Haldwani.

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We could witness a steady flow between the periods of 6th June to the 16th of June. Hence we could also look for the needed rate

Hub Location 01-Jun 02-Jun 05-Jun 07-Jun 10-Jun 14-Jun 15-Jun 16-Jun 17-Jun 18-Jun 22-Jun 23-Jun 24-Jun 25-Jun 26-Jun 28-JunCUTTACK CUTTACK TW 48 48 174 166 163 160 160 157 160 158 114 99 91 84 84 76CUTTACK JAJPUR TW 62 62 226 215 211 204 204 201 204 204 152 140 140 120 118 115

BHUBANESWAR NIMAPARA TW 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0BHUBANESWAR BHUBANESWAR 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0BHUBANESWAR BHUBANESWAR TW 105 101 234 218 212 196 192 185 184 184 161 152 142 135 133 118BHUBANESWAR PURI TW 1 1 16 16 17 0 0 0 0 0 0 0 0 0 0 0

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CUTTACK TW NISITHA KUMAR NANDAJAJPUR TW NISITHA KUMAR NANDANIMAPARA TW SANTOSH DASBHUBANESWAR SANTOSH DASBHUBANESWAR TW SANTOSH DASPURI TW SANTOSH DAS

In the following tables we can note that the trends could primarily be due to reasons of Mismatch in the location

15

handling, discrepancy caused due to factors of shortage of collections Agents and manpower.

GUJARAT:

The table below represents the following set of values for the purpose of trend assessment over the period of June. The chart is also given below for the purpose of looking into the reasons for fall and rise of the No-Payment in the month of June. This would also show for reasons of rise and fall of the values ranging in between the dates of 4th of June and 16th of the month.

16

State Hub Location Current PE Name Mobile NO. 01-Jun 02-Jun 05-Jun 07-Jun 10-Jun 14-Jun 15-Jun 16-Jun 17-Jun 18-Jun 22-Jun 23-Jun 24-Jun 25-Jun 26-Jun 28-JunGUJARAT OLD PADRA ROAD TW ALKAPURI TW Nayan Dave 9924430825 4 4 12 9 6 6 6 5 6 6 6 6 6 6 6 6GUJARAT GODHARA TW LUNAVADA TW Chirag Bhavsar 7874539610 7 7 5 2 4 4 4 3 4 4 7 14 14 14 14 14GUJARAT MORBI TW MAHENDRA NAGAR TW Vacant 9727707576 0 0 1 1 1 1 1 1 1 1 2 2 2 2 2 2GUJARAT SURAT TW SURAT TW Mittul Patel 9099950460 418 414 996 699 533 507 496 424 464 459 433 440 439 427 426 417GUJARAT RAJKOT TW RAJKOT TW Rahul Manwar 9825108084 127 124 252 169 116 116 116 95 113 112 116 115 115 113 111 110GUJARAT AHMEDABAD EAST TW AHMEDABAD TW Sunil Ajagiya 7096100996 464 456 1357 960 690 662 657 547 637 630 591 590 584 569 558 546GUJARAT ANAND EAST TW ANAND TW Sagar Nair 9898509707 138 136 223 172 155 153 153 111 152 152 163 165 165 165 165 284GUJARAT Jamnagar TW JAMNAGAR TW Suhag Aghera 9879553700 11 11 20 11 9 9 9 8 9 9 11 16 15 15 15 15

The chart below shows for the variations which are captured as a pictorial, hence we are able to collate the following as a group whole.

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200400600800

1000120014001600

ALKAPURI TW Nayan Dave LUNAVADA TW Chirag BhavsarMAHENDRA NAGAR TW Vacant

SURAT TW Mittul Patel

RAJKOT TW Rahul Manwar AHMEDABAD TW Sunil AjagiyaANAND TW Sagar Nair JAMNAGAR TW Suhag Aghera

Findings

The prime reasons for the No-Payment collection contracts would be as follows:

Shortage in the number of collection agents due to inability to attend to the high contract to agent ratio. Cross overs of agents of cases ranging from location shifts

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PDC, ECS issues are largely faced which leads up to the reasons of wrong credit of the customer accounts, utility codes changes in the customer codes as well as the non-receipt of the ECS mandate.

Auto Clearing House issues which includes PDC, apart from facing legal issues that include certain extraordinary cases of –

Accidents, customer absconded, Unlawful mortgage and intentional defaults as well. A very minor level of ERP operating issue to also be noted.

Some of the extraordinary cases would range from banking discrepancies and other ancillary issues along with.

After having conversations with the product executives across the state it has been observed that a majority of the cases have been under the process of collection with a specific rise during the time periods of 4th June and 16th of June.

No-Payment contracts are segregated into two segments of Hard Bucket and soft bucket based on the extent of their accrual. This segmentation occurs at the end of March every year.

Remarks

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