narendra project report

7/28/2019 Narendra Project Report

http://slidepdf.com/reader/full/narendra-project-report 1/72

Report on

“Study of Market Scoping & Analysis of

Financial Investment and Loan Products.”

Submitted in the partial fulfillment of degree

Of

MASTER OF MANAGEMENT STUDIES

By

NARENDRA G.CHAURASIYA

Under the guidance of

MR.SANTOSH AHIRE

Branch Manager

SWAYAM SIDDHI COLLEGE OF MANAGEMENT AND RESEARCH

TEMGHAR ROAD, BHIWANDI THANE-421302

1



DECLARATION

I do hereby declare that the Project work entitled “Study of Market Scoping & Analysisof Financial Investment and Loan Products through India Infoline Finance Ltd.”Submit ted for

the par tial ful fi llment for the award of Master ’s Of Management Studies

of Swayam Siddhi College of Management &Research is my original work and has

not previously formed the basis for the award of any degree, diploma, associate ship,

fellowship or other similar title or recognition.

Name: Narendra G.Chaurasiya

Batch: MMS- 2012-2014

Date:

Place: Bhiwandi-Anjurphata

(NARENDRA G.CHAURASIYA)

2



Acknowledgement

I am very much thankful to our Dean of SSCMR Mr. S.K Banarjee because he provides me

for doing the Summer Internship Programmed and it’s only for him I have got the opportunity

to know about the real corporate world with the help of the company India Infoline Finance

Ltd.,

My internal guide Prof. Mr. Sanjeev helped me a lot to prepare my project and I have got all

the important guidelines regarding of my project from him .it’s only because of him I can be

able to know about market a little bit. I take this opportunity, also to express my love and

sincere thanks to my family members and friends for their support and advice during various

stage of work.

I would like to thank further, MR.Santosh Ahire (Branch Manager, India Infoline Finance

Ltd. Branch,bhiwandi-Anjurphata) for her cooperation during this period.

I would also like to thank, Mr.Shreenivas Chintal Vinod Maurya& My friends

Pradnesh and Pritam (Business Development Officers, India Infoline Finance Ltd.) for the

guidance and support during the completion of the Internship.

I end this note by taking responsibility solely for any of the mistakes.

3



CONTENTS

1. Introduction

2. Methodology

3. Company Profile

4. Products of the Company

5. Gold Loan, Home Loan &LAP

6. Different Types of Investment Plan in India Infoline

7. Findings

8. marketing activities photos

9. Results

10. Recommendation and Conclusion

11. Bibliography

4



12. Appendix

1.. INTRODUCTION

The project attempts to estimate the market Scoping and Analyzing of financial investment and

Loan Product. The project is also deals with the competitive analysis of other companies.

Investment Plan and Loan Product offered by various companies.

The study was undertaken for identifying potential customer who will be interested in

Investment Financial Product. Primary research has been conducted to collect data from the

respondents on the basis of questionnaire.

5



OBJECTIVES OF THE PROJECT

• To know how much potentially has India Infoline Finance Ltd of

Investment Plan and Loan Product in Thane.

• To know the current market condition of Investment Plan Competitive

analysis with other company in Thane for this particular segment

• To know the Company Profile

• To study the organizational functions

• To study functions of various departments

• To study internal dependence of these all departments

6



• To know about how company manage to sell and purchase products.

• To get real time exposure of corporate world

2. METHODOLOGY

The project started by approaching India Infoline Finance Ltd to know about the market

potential for Investment Planner in kanjurmarg, with reference to the other companies operating

in the same area. There after same area were according to convenience where in survey

conducted on that area to find out how much market potential of companies Loan product, and

also find out what other facilities and services the target audience wants regarding products.

same area was selected from kanjurmarg, are as under the India Infoline Finance Ltd

kanjurmarg branch.

The study was deal with market potential of Financial Investment and Loan Product offered by

India Infoline Finance Ltd. This will be reflected from the question contained in the

questionnaire discussed later in the project report.

a) Sample:

7



The sample was selected for Existing Customer of Company and Friend; I started

interviewing with Existing Customer of Company and Friends for Investment and Loan

Product.

b) Description of the sample:

The sample for Investment and Loan Product. Existing Customer of Company and

Friends

c) Tools:The tool that was used to conduct the study was questionnaire designed by me, which

was mixture of open ended and close ended question. The questionnaire was designed in

such so as to cover the relating to Investment Plan and Loan Product.

d) Method of data collection:

All the data was collected through one to one interview. The entire question discussed

above were explained to the respondent proper care has been taken to see that

respondent understand the question clearly and answer to in without any hurry. The

entire respondents were interviewed at their convenience so that there is no chance that

the interviewer comprehends. The responses clearly without suffering from any

ambiguity

Limitation of the project

I have collected all the data’s by questioning directly to the customers or the public, so they may

provide wrong information to me.

8



Most of the customers are not interested to give the answer of all the questions, so it generally

creates a huge problem at that time.

INDIAN MARKET AT A GLANCE:

A LOOK AT THE NBFC SECTOR

The Indian NBFC sector can broadly be segregated into:-

1) Infrastructure NBFC segment,

2) The Housing Finance NBFC segment and

3) The Retail or Consumer Finance NBFC segment.

The Indian Non Banking Finance Companies (NBFCs) accounts for a critical part of the

country’s overall financial system. It is estimated that the NBFCs as a whole account for 9.1%

or Rs. 4 trillion of assets of the entire financial system in India

Below are the new sets of rules by RBI:

Gold NBFCs can only lend against gold jewellery. They can no longer consider

against bullion, primary gold and gold coins for gold loans.

The amount of gold loan cannot exceed 60% of the value of gold jewellery.

The banking regulator has directed that companies having half their assets in gold

should have a minimum equity capital, or tier-I capital, of 12% by April 2014.

It is also expected that the Reserve Bank of India may also cap the rates at which they offer gold

loans to customers to minimize the risk in lending at such high rates.

CHALLENGES FACED BY NBFC’s:

The beginning of the last decade was very challenging for NBFC as they had to starve

off issues such as high cost of funds, low asset profile, intense competition, positioning

difficulties, slow economic and industrial growth and a high degree of NPAs.

9



The largely institutionally funded NBFC industry struggled in an era of where credit

confidence was ebbing away. Loss of employment, deterioration in asset quality and

lack of liquidity were some of the standout characteristics of NBFCs during that phase.

The RBI came to the rescue of the NBFCs by providing a range of measures such as

opening up a special repo window under the Liquidity Adjustment Facility, creation of

an SPV for liquidity support, deferring higher CAR norms for NBFCs and reducing risk

weights on bank’s exposure to NBFCs.

3. Company Profile

IIFL was founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director) as an

independent business research and information provider. It gradually evolved into a financial

10

http://en.wikipedia.org/w/index.php?title=Nirmal_Jain&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=Nirmal_Jain&action=edit&redlink=1



services solution provider. IIFL has a network of 3000 business locations spread over more than

500 cities and towns across India.

IIFL is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of

India (NSE) for securities trading; with MCX, NCDEX and DGCX for commodities trading;

and with CDSL and NSDL as depository participants. IIFL is registered as a Category I

merchant banker and is a SEBI registered portfolio manager.

IIFL is a one-stop financial services shop, most respected for quality of its advice, personalized

service and cutting-edge technology. They have come a long way since their inception and

made a mark in the industry. The IIFL group, comprising the holding company, India Infoline

Ltd and its subsidiaries, is one of leading players in the Indian Financial Services Space. IIFL

offers advice and execution platform for the entire range of financial services covering products

ranging from Equities and Derivatives, Commodities, Wealth Management, Asset Management,

Insurance, Fixed Deposit, Investment Banking, Loans(Gold, Home, Mortgage, Commercial

Vehicle). IIFL recently received an in-principle approval for Securities Trading and Clearing

memberships from Singapore Exchange (SGX) paving the way for IIFL to become the First

Indian Brokerage to get a membership of the SGX. IIFL also received membership of the

Colombo Stock Exchange becoming first foreign broker to enter Sri Lanka. IIFL owns and

manages the website, www.indiainfoline.com, which is one of India’s leading online

destinations for personal finance, stock markets, economy and business.

IIFL has been awarded the ‘Best Broker, India’ by Finance Asia and the ‘Most Improved

Brokerage, India’ in the Asia Money Polls. India Infoline was also adjudged as ‘Fastest

Growing Equity Broking House-Large Firms’ by Dun & Bradstreet. A forerunner in the field of

equity research, IIFL’s research is acknowledged by none other than Forbes as ‘Best of Web’

and a must read for investors in Asia. IIFL’s research is available not just over the internet but

also on international wire services like Bloomberg, Thomson First Call and Internet Securities

where it is amongst one of the most read Indian Brokers.

History & Milestones

2011

Launched IIFL Mutual Fund.

11

http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India


http://www.indiainfoline.com/






2010

Received in-principle approval for membership of the Singapore Stock Exchange Receivedmembership of the Colombo Stock Exchange

2009

Acquired registration for Housing Finance SEBI in-principle approval for Mutual

Fund Obtained Venture Capital license

2008

Launched IIFL Wealth Transitioned to insurance broking model

2007

Commenced institutional equities business under IIFL Formed Singapore subsidiary,

IIFL (Asia) Pvt. Ltd.,

2006

Acquired membership of DGCX Commenced the lending business

2004

Acquired commodities broking license Launched Portfolio Management Service

2003

Launched proprietary trading platform Trader Terminal for retail customers

2000

Launched online trading through www.5paisa.com Started distribution of life insurance

and mutual fund

1999

Launched www.indiainfoline.com

1997

Launched research products of leading Indian companies, key sectors and the economyClient included leading FIIs, banks and companies.

1995

Commenced operations as an Equity Research firm

12

http://www.5paisa.com/


http://www.5paisa.com/




IIFL Values- GIFTS

Growth

IIFL believe in setting challenging targets and achieving them.

Once IIFL have set target for any business, they work aggressively to achieve the same.

IIFL has grown from a search firm in 1995 to a leading financial powerhouse in less

than a decade. From research, now the company provides the entire range of services

Integrity

At IIFL they believe all employees to implement things which are legally morally and

ethically correct Integrity is the cornerstone on which business is built. No short cuts – compliance is necessary for business to grow. A cardinal rule – no compromises on

ethics and any wrong act like even fudging a travel bill will mean termination.

Fairness

IIFL give all their people equal opportunities.

Ideas / suggestion are always heard by management irrespective of the hierarchy.

Merit is the sole determinant in the career growth of an IIFL employee. The appraisal

process in IIFL is transparent with the employee being evaluated on clearly defined

parameters. There are internal job postings which are posted at regular intervals. IIFL

always prefer to fill in vacancies by internal promotions and only then recruits from

external source are considered.

Transparency

At IIFL most of the information is available on intranet IWIN (India Infoline Web based

Information Network) via circulars and policies.

13



Employees can also directly communicate with the top management via the IWIN Q&A

(Question & Answer) feature.

Service

Customer service is the backbone of financial services.

We believe in acquiring customers, retaining them and keeping them happy. The essence

of good customer service is in forming a relationship with customers for life.

SWOT ANALYSIS OF IIFL:

SWOT Analysis

Strength

1.Wide Range of financial Products

2.Successful Implementation of “Insurance

broking” model

3.Online portal’s Successful branding as

“5paisa com”

4.Have over 2500 offices in India in over 500

cities

5.First Indian brokerage house to get

membership of Singapore Exchange

6.IIFL has been awarded the ‘Best Broker,

India’ , ‘Most improved

brokerage, India’, ‘Fastest Growing Equity

Broking House’

14



Weakness

1.High Risk Exposure as seen by

conservative population

2.Less emphasis into the growing cities

Opportunity

1.High income Urban families

2.More penetration into the growing cities

Threats

1.stringht Economic measures by

Government and RBI

2.Entry of foreign finance firms in India

Market

Corporate Social Responsibility

Some of the activities undertaken by the IIFL Foundation:

FLAME – Financial Literacy Agenda for Mass Empowerment

IIFL’s initiative FLAME, Financial Literacy Agenda for Mass Empowerment, was launched a

year ago. Since then, IIFL’s financial literacy campaign gathered momentum and has covered

tens of thousands of investors. The initiative has also covered teenage school students,

underprivileged women living in slum areas, and physically challenged people across the

country. The initiative has taken a multi-pronged approach, spreading financial literacy through

newspaper advertisements, literacy workshops, books and publications, a financial literacy help-

line, the FLAME portal, and social media channels.

Blood Donation Camp

A blood donation camp in progress at the IIFL headquarters. Blood donation drive IIFL

organized a blood donation drive via camps at six locations across India. Over 500 employees

Participated in the same

15



Barsana Eye Camp

The IIFL Foundation sponsored an eye and dental camp held in February, 2010 with the support

of expert doctors and surgeons from the Bhaktivedanta Foundation in Barsana near Mathura.

While over 2,600 people underwent eye tests and over 800 were selected for free eye surgery, a

total of over 1,800 dental procedures like extraction, scaling and filling, among others, were

performed. Team IIFL provided its whole-hearted support to this noble cause and will continue

to do so in the future

Pandharpur Medical Camp

We also sponsored the Pandharpur Medical Camp, held by the Bhaktivedanta Hospital in July

2011 at Pandharpur. Free medical treatment and food was given to approximately 60,000

pilgrims who had come to Pandharpur during Ashadi Ekadashi. The pilgrims were treated for

fever, injuries, fractures, gastroenteritis, myalagia, headache, epilepsy, malaria, respiratory

infections etc, during the camp.

Adopt a Village

To expand our initiatives, we are now exploring the best ways to take education in rural and

tribal areas beyond the key basics of ‘abc’. In our ‘Adopt a Village’ scheme we hope to impart

knowledge about water conservation, waste management, sanitation, corruption prevention, and

many other essential fields.

RELIEF FUND (UTTARAKHAND)

IIFL family Contribute to help the needy people who have lost everything due to nature's wrath

16



4. PRODUCT AND SERVICES

IIFL offers advice and execution platform for the entire range of financial services covering products ranging from Equities and derivatives, Commodities, Wealth management, Asset

management, Insurance, Fixed deposits, Loans, Investment Banking, Gold bonds and other

small savings instruments.

Credit and finance

IIFL offers a wide array of secured loan products. Currently, secured loans (mortgage loans,

margin funding, and loans against shares) comprise 94% of the loan book. The Company has

discontinued its unsecured products. It has robust credit processes and collections mechanism

resulting in overall NPAs of less than 1%. The Company has deployed proprietary loan-

processing software to enable stringent credit checks while ensuring fast application processing.

Recently the company has also launched Loans against Gold

Insurance

Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange

for payment. It is a form of risk management primarily used to hedge against the risk of a

contingent, uncertain loss

Types of Insurance

Non-Life Insurance

Life Insurance

Non-Life Insurance (General Insurance)

General Insurance includes insurance of all assets and events other than death of

an individual.

Common Categories of General Insurance include

17



o Health Insurance

o Car Insurance

o Property Insurance

o Travel Insurance

Basic Principles of General Insurance

• In general insurance the value of the assets insured is calculated.

• The maximum amount of Insurance is limited to the value of the asset.

• The maximum benefit payable will be restricted to extent of losses suffered.

Life Insurance

Risk to Human Life

• Death: This risk is covered by Life Insurance.

• Living too long: This risk is covered by Pension.

• Disability: This risk is covered by Health and Disability Insurance.

• Disease: This risk is covered by Health Insurance.

Basic Principles of Life Insurance

• Utmost good faith: A positive duty to voluntarily disclose, accurately and

fully, all facts material to risk being proposed, whether requested or not.

• Insurable Interest: A relationship with the Insured recognized in law and

gives legal right to the person to insure the insured.

How does Insurance work?

Premium charged in Insurance plans can be split into three parts

18



Mortality Expense: This is the amount of premium utilized to provide life cover.

Administrative Expense & Charges: This is the amount charged to cover Administrative

expenses of the insurer.

Investment Expenses: This is the amount that is invested by the Life Insurance Company

to provide returns to the customers.

Types of Insurance Plans

Type of Life Insurance Basic Features

Term Assurance The term basic feature of term assurance plans is that they

provide death risk-cover. Term assurance policies are only

for a limited time, claim for which is paid to the family of the assured only when he dies. In case the assured

survives the term of policy, no claim is paid to the

assured.

Endowment Insurance In case of endowment assurance, the term of policy is

defined for a specified period say 15, 20, 25 or 30 years.

The insurance company pays the claim to the family of

assured in an event of the assured surviving the policy’s

term.

19



Annuities (Pension Plans) Annuities are just opposite to life insurance. A person

entering into an annuity contract agrees to pay a specified

sum of capital to the insurer. The insurer in return

promises to pay the insured a series of payments until

insured’s death.

There are two types of annuities:

Immediate Annuity: In an immediate annuity, the insured

pays a lump sum amount and in return the insurer

promises to pay him in instalments a specified sum on a

monthly/quarterly/half-yearly/yearly basis.

Deferred Annuity: A deferred annuity can be purchased

by paying a single premium or by way of instalments.

The insured starts receiving annuity payment after a lapseof a selected period.

Money Back Policy Money back policy is a policy opted by people who

wanted periodical payments. A money back policy is

generally issued for a particular period, and the sum

assured is paid through periodical payments to the

insured, spread over this time period.

ULIPsULIPs or United Linked Insurance plans are plans that combine the safety of insurance

protection with wealth creation opportunities.

How do ULIPs work?

ULIPs work on the lines of mutual funds.

The premium paid by the client is used to buy units in various funds floated by the

insurance companies.

Units are bought according to the plan chosen by the policyholder. On every additional

premium, more units are allotted to his fund.

The policy holder can also switch among the funds as and when he desires. While some

companies allow any number of free switches to the policyholder, some restrict the

number to just three or four. If the number is exceeded, a certain charge is levied.

20



Individuals can also make additional investments from time to time to increase the

savings component in their plan. This facility is termed “top-up”

The money parked in a ULIP plan is returned either on the insured’s death or in the

event of maturity of the policy.

Level Death Benefit: In case of the insured person’s untimely death, the amount that the

beneficiary is paid is the higher of the sum assured or the value of the units.

Increasing Death Benefit: In case of the insured person’s untimely death, the amount

that the beneficiary is paid is the sum assured plus the value of the units.

Wealth Management Service

IIFL offers private wealth advisory services to high-net-worth individuals (HNI) and corporate

clients under the ‘IIFL Private Wealth’ brand. The team advises clients across asset classes like

sovereign and quasi-sovereign debt, corporate and collateralized debt, direct equity, ETFs and

mutual funds, third party PMS, derivative strategies, real estate and private equity. It has

developed innovative products structured on the fixed income side. It also has tied up with

Interactive Brokers LLC to strengthen its execution platform and provide investors with a

global investment platform.

Investment banking

IIFL’s investment banking division was launched in 2006. The business leverages upon its

strength of research and placement capabilities of the institutional and retail sales teams. Our

experienced investment banking team possesses the skill-set to manage all kinds of investment

banking transactions. Our close interactions with investors as well as corporate helps us

understand and offer tailor-made solutions to fulfill requirements. The Company possesses

strong placement capabilities across institutional, HNI and retail investors. This makes it

possible for the team to place large issues with marquee investors.

21



Commodities

IIFL offers commodities trading to its customers vide its membership of the MCX and the

NCDEX. Our domain knowledge and data based on in depth research of complex paradigms of

commodity kinetics, offers our customers a unique insight into behavioral patterns of these

markets. Our customers are ideally positioned to make informed investment decisions with a

high probability of success.

Equities

IIFL is a member of BSE and NSE registered with NSDL and CDSL as a depository participant

and provides broking services in the cash, derivatives and currency segments, online and

offline. IIFL is a dominant player in the retail as well as institutional segments of the market.

Over the last five years, India Infoline sharpened its competitive edge through the following

initiatives:

Multi-channel delivery model:

The Company is among the few financial intermediaries in India to offer a complement of

online and offline broking. The Companies network of branches also allows customers to place

orders on phone or visit our branches for trading.

Integrated middle and back office:

The customer can trade on the BSE and NSE, in the cash as well as the derivatives segment all

through the available multiple options of Internet, phone or branch presence.

Multiple-trading options:

The Company harnessed technology to offer services at among the lowest rates in the business.

Service :

Clients can access the customer service team through various media like toll-free lines,

Emails and Internet- messenger chat for instant query resolution.

22



The Companies customer service executives proactively contact customers to inform

them of key changes and initiatives taken by the Company. Business World rated the

Companies. Customer service as Best in their survey of online trading sites carried out

in December 2003.

Key features :

Membership on the Bombay Stock Exchange Limited and the National Stock Exchange

Registered with the NSDL as well as CDSL as a depository participant, providing a one-

stop solution for clients trading in the equities market.

Broking services in cash and derivative segments, online as well as offline.

Presence across 350 cities and towns with a network of over 850 business locations

Equity client base of over 500,000 clients

Provision of free and world-class research to all clients Commodities.

India Infolines extension into commodities trading reconciles its strategic intent to

emerge as a one stop solutions financial intermediary.

Its experience in securities broking has empowered it with requisite skills and

technologies. Increased offering: The Companies commodities business provides a

contra-cyclical alternative to equities broking. The Company was among the first to

offer the facility of commodities trading in India’s young commodities market (the

MCX commenced operations only in 2003).

Average monthly turnover on the commodity exchanges increased from Rs 0.34 bn to Rs

20.02 bn. The commodities market has several products with different and no correlated

cycles. On the whole, the business is fairly insulated against cyclical gyrations in the

business.

India Infoline distinguished its business through the interplay of knowledge and

technology, complete solution. The Company provides a complete - advice to execution

solution facilitated by information and advice on likely commodity trends in the Indian

and international environment.

Technology: The Company has extended the trading terminal to the investors

home/workplace reinforced with real-time commodity information and ledger position.

23



Rates: The Company harnessed technology to offer services at among the lowest rates

in the business. Membership: The Company widened client reach in trading on the

domestic and international exchanges.

Invest online:

India Infoline has made investing in Mutual funds and primary market so Effortless. All you

have to do is register with us and that’s all.

No paperwork no queues and No registration charges.

If you are 5p customer use your existing login ID and Ledger (fund transfer) password.

India infoline offers you a host of mutual fund and IPO choices under one roof; backed by in-

depth information and research to help you invest effortlessly.

Invest in Mutual Fund:India infoline offers you a host of mutual fund choices under one roof, backed by in-depth

Research and advice from research house and tools configured as investor friendly.

Investing in Mutual Funds has never been easier

Apply in IPOs:

You could also invest in Initial Public Offers (IPOs) online without going through the hassles of

filling ANY application form/ paperwork.

5. GOLD

24



Glory of gold is unique. The precious yellow metal is celebrated as ‘Emperor of metals’. Some

people compare this metal with the Almighty God. Gold is called as Swarnam, Aparanji, China,

Sona, Pon, Thangam, Bangaru in various Indian languages. Pure gold is called as Fine Gold in

English.

Gold is taken out from the earth, naturally with silver & cooper. South Africa is the major

supplier of gold (50% of gold). Only in Australia gold is mined in pure state of 99.65%

naturally. India is the top most user of gold in the world. India is consuming 800 tons of gold

per annum approximately.

Now a day’s every country’s currency is based on the reserve of the gold in that Government.

USA, Canada, UK, Australia, China & South Africa governments are economically well off

because of their gold stock.

Basic Features of Gold

Color : YellowSymbol : Au (Aurum)

Atomic No. : 79

Atomic Weigh : 196.96

Melting temp. : 1064 degree C

Boiling temperature : 2970 degree C

Density : 19.36 gm/cu.cm

Weighing Units

1 Gram : 1000 m.gm

25



1 Sovereign : 8 gm

1 Troy ounce : 31.104 gm

1 Tula : 11.664 gm

10 Tula (Biscuit) : 116.640 gm

Carat & Karat

Purity of gold is measured in terms of Carat in U.K. and as Karat in U.S.A

100% purity is not available, because sometimes other metal particles may be available while

refining. So pure gold is denoted as 24 Karat or 99.99% Gold

ISO Standards of Gold Purity

Karat Percentage (%)

24 99.99

22 91.60

21 87.50

18 75.00

14 58.50

9 37.50

Carat

Generally Karat denotes the purity of Gold and Carat denotes the weight of the Gems and

Diamonds.

Carat Weight

1 Carat 0.200gm (or) 200mg

1 Carat 100 Cents

1 Carat 0.002gm (or) 2mg

26



Checking the quality of Gold through Touch Stone

• Before using the touch stone, it should be cleaned & some drops of coconut oil have to

be applied over the surface evenly.

• While checking the gold in touch stone, the rubbing should be done deeply & repeatedly

rubbing in the same place 8 to 10 times. The rubbing length should not exceed 2cms.

• For knowing the quality of gold, we have to consider 3 points in rubbing.

a) Hardness

b) Blister

c) Color

•

While rubbing the gold, if the rubbing seems to be soft, it shows high percentage of gold(88% to 91.60%).

Where rubbing seems to be hard, it may be below 83% purity.

• When rubbing gold, if blister are found more it may be high percentage & it may look

like dim

• When rubbing gold, if blister are not found, it may be low percentage & it may look like

bright.

27



• Then we have to find the color code of the rubbing.

• With these points, we may come to a conclusion of nearly knowing the percentage of

quality. But for confirming the percentage of gold, we have to use the nitric acid &

sodium chloride (salt).

• If we rub metal other than gold, while applying nitric acid, the rubbing will disappear

quickly.

• If we rub the gold of 50% & below, while applying nitric acid, the rubbing will not

disappear quickly. Only color will change to reddish. After applying salt, the rubbing

will disappear & lustre will form in that place.

Appraising of Jewels for Loan

For appraising the gold jewels we have to consider below points.

1. Gold or not gold.

2. Weight. (Total wt.)

3. Quality. (Skin %)

4. Less in weight for dust, stones, enamels, beats, shellac weight. (Gross wt)

5. Less in skin % for solder. (Melting %)

28



6. Appraisal value. (Value of pure gold) = G. wt. * Melting % * Pure Gold rate.

7. Bank value. (Loan amount) Gross wt. * As per Scheme Rate / gm.

Types of Jewels

I. Casting Jewels:

Coins, Bangles, Rings, Lockets, Necklace, Bracelet & Stud drops

II. Filigree Jewels:

All types of Chains, Necklace, long necklace, Bangles, Rings, lockets, Stud drops, Nose

pins, Jimki, Bracelets, Watch, Watch chain, Coin harum, Mango harum, Ottiyanam,

vanki and other variety of jewels.

III. Open Setting Stone Jewels:

Necklace, Long necklace, Bangles, Rings, Lockets, Stud drops, Nose pins, Jimki,

Bracelets, Watch chain, Coin harum, Mango harum, Ottiyanam, Vanki, and other variety

of jewels.

IV. Closed Setting Stone Jewels:

Necklace, Harum, Bangles, Rings, Lockets, Stud drops, Nose pins, Jimki, Bracelets,

Watch, Watch chain, Coin harum, Mango harum, Ottiyanam, Vanki, and other variety of

jewels.

29



GOLD LOAN SECTOR IN INDIA

RATIONALE BEHIND GOLD LOAN:

As the name suggest its loan against Gold. It’s the most convenient way to receive cash in no

time from any NBFC/Bank by pledging your gold Coins/bars/Exchange traded funds ETFs/ SBI

gold certificates etc., this is one loan product which comes with minimal documentation & no

processing time

Product is designed in a way it ensures hassle free process

for the customer & loan availed can be put to any use.

Loan amount eligibility is evaluated basis on the Gold value

banks usually fund 70-80% of the gold market value & on

repayment of the loan gold deposits are returned back to the

customer.

This loan comes much cheaper than personal loan as it’s a secured product & rate of interest

ranges between 11.5-24% per annum.

Rate of interest is decided on two factors risk criteria-:

1. What % of market value of Gold you are availing loan. (If its 90% of the Gold market value

then interest charged will be higher & vice a versa for lower loan amount as compared to gold

value) &

2. Customer relationship with the bank.

The real value of gold:

The Indian gold market is a market that has grown at an impressive pace and is still currently

brimming with opportunities. While since FY02 till FY10 the gold stock in India is estimated to

have grown at a CAGR (Compounded Annual Growth Rate) of 35-40% (It is estimated that in

FY11 alone the country imported 900-1000 tonnes of gold) there is every reason to believe that

these rates can be sustained or even bettered going forward. The World Gold Council believes

that gold demand in the country will continue to grow at 30% in real terms driven by

urbanization, rapid GDP growth, burgeoning middle class incomes and a sustained and

potentially rising savings rate of 35-40%

30



Gold Price in India – 40 Years History

Gold has always fascinated us Indians but do you know how prices of Gold have varied in

India. I happen to visit RBI website which publishes lots of reports including weekly Gold

prices. So here it is 40 Years price history of Gold.

Gold Loan Sector:

31

http://apnaplan.com/gold-price-in-india-40-years-history/

http://apnaplan.com/gold-price-in-india-40-years-history/



Players in the Gold Loan Industry

The key players in the Indian gold loan market include the unorganized sector, banks –

public/private/cooperatives and NBFCs.

While the unorganized sector, comprising local pawnbrokers and moneylenders, has

traditionally dominated the gold loan market for many decades and still commands

nearly 75% of the market, the organized sector, led by NBFCs, is catching up fast.

The organized sector has grown at a rapid pace of 40% CAGR from 2002 to 2010and is

expected to grow by 33% to 41% CAGR in 2011. And in doing so, these companies are

challenging the dominance of the large unorganized sector.

List of Major NBFCs

Muthoot Finance

Mannapuram Gold loan

Muthoot Fincorp

Karvy Gold Loan

Magama gold loan

Unorganized Sector

Moneylenders

Marwari (Jewelers)

Pawnbrokers

List of Nominated Banks

1. Allahabad Bank 2. Bank of Nova Scotia

3. Bank of India

4. Canara Bank

5. Corporation Bank

6. Dena Bank

32



7. HDFC Bank Ltd.

8. ICICI Bank Ltd.

9. Indian Overseas Bank

10. Induslnd Bank Ltd.

11. Oriental Bank

12. Punjab National Bank

13. State Bank of India

14. Union Bank of India

Gold loan or loan against gold is the easiest and quickest way for servicing you financial needs.

To avail a gold loan, all you need to do is pledge your gold ornaments with us and we would

provide you with a loan amount as per the market value of your gold. Unlike other loans, gold

loan does not require you to provide any income or salary proof. Moreover, it has comparatively

lower interest rates; requires lesser documentation, and hence is processed in lesser time.

IIFL provide maximum loan against your gold at lowest interest rates. They have a strong

presence Pan-India and have serviced a large number of customers in a very short span. They

offer different types of schemes as per your requirement and convenience.

Following are the main features of loans:-

1. Loan amount ranges from min Rs 5,000 to max Rs 10, 00,000

2. Tenor for loans ranges to one year.

3. Interest Rate can be paid on a monthly basis

4. Interest / Loan Amount due can be paid at any of our Gold Loan branches

5. Loan gets processed in as low as 5 minutes

6. Interest Rate is 1.70%. Our Per Gram Rate is Rs.1700/- It changes according to the changesin price of gold

7. Your Gold is insured and secured safely with us in fire and burglary proof vaults

Gold Loan Branch Process

33



As of March 31, 2012, our Gold Loans business is carried out through 1297 branches, which are

supported by our exclusive network of about 6100 branch sales staff in 502 locations across the

country. A typical branch would have four (4) employees, including the branch manager.

Customer Care Executive

• Explains the various scheme.

• If customer is convinced to pledge, collects KYC documents & gold.

• Verification of KYC documents done & passed on to BM for further verification.

• BM – ID & Address Proof Verification.

Valuer 1

• Confirms the count and gross weight.

• Check gold for its purity.

• Brief the customer about their requirement and other features.

Valuer 2

• Confirms the purity by testing.

• Passes the appraisal sheet to BM.

Branch Manager (BM)

• Confirms the purity, loan amount & passes the same to CCE.

• CCE – At the same time, CCE and valuers does system entry. Signature of customer,

valuers & BM done in the loan docs. Paper passed on to Cashier.

Cashier

Disbursement of cash along with denomination noting in cash register

34



Roles of Staff engaged in Normal branch process

Role of a Customer Care Executive:

Handling inquiries from customers regarding loans against gold.

Helping customer to solve his/her all queries.

Explaining terms and conditions of the product to the customer.

Counting jewel items in front of customer & taking his/her signature.

Ensuring all the KYC documents are verified with original.

Ensuring all the details are filled up in Customer Detail Form.

Role of Valuer 1 & 2:

Checking the jewelry with accuracy

Testing gold with two methods which include, Skin Test & Salt Test.

Finding out the purity & making appraisal sheet.

Working out on loan amount with mutual conversation.

Every gold jewelry item must be counted and matched with the appraisal sheet before

inserting it in gold packet.

Each & every details mention on packet must be filled in with accuracy.

It is important to keep gold packet in serial order in vault.

Role of Cashier:

To make sure that cash is taken from vault strictly as per cash denomination entered in

the system.

Ensuring that cash is counted twice before giving it to customer.

To make sure that cash transaction is done in front of CCTV camera.

35



Role of Branch Manager:

Branch Manager has to explain customer about RTGS process.

Convince customer to opt for RTGS/NEFT mode of cash transfer.

Explain customer about the advantages of RTGS/NEFT process.

Make sure that address verification is done by BM before disbursal of loan.

Steps to be followed while Appraising Gold

Sort gold items according to Solid, Chain & Others.

Check the Hallmark (if any)

Confirm the purity with the help of Touch Stone & Acid Test.

Note down result in following format:

Name of Item Gross Weight Net Weight Per Gram Rate Amount (Net

wt.*Per gm rate)

Pass out gold to Valuer 2 for re-valuation.

Suggest lower loan amount to BM.

Steps to be followed while Sealing of Gold

Fill in the details on the packet.

Insert the gold & appraisal sheet in the packet.

Fix the sticker.

Sign on the sticker (Branch Manager & Valuer 1)

Affix the seal on sticker.

Keeps the gold packet in vault in serial order mentioning the GL number (to & from).

36



Steps to be followed at the time of Cash Handling

Joint Custodians open the vault room.

Take cash as per cash denomination entered in system.

Pass out the same to cashier to re-count.

Handover the cash to customer in front of CCTV camera.

MAJOR COMPETITOR FOR IIFL:

Company IIFL MANAPURAM KARVY MAGMA MUTHOT

FINCORP

Bank

Loan Limit. 5k to

No limit

1k to 10 lace 3k to

10crore

1.5k to

1crore

Loan Tenures 12 Month 1 Month 12 Month 12 Month 12 Month 90 to100

days

Disbursal times Few

Minutes

Few Minutes Few

Minutes

Few

Minutes

Few

Minutes

Few days

High loan to

value

(LTV)ratios

88% 88% for 20ct

94% for 22ct

99% 96%

98%

100% 90%

37



Name Scheme

& ROI

Fast track

20.4%

0-

365days

A+ : 21% 0-

90days

24% 91-

365days

A2 : 19% 0-

90days

22% 91-

180days

25% 181-

365days

B2 : 20% 0-

90days

23% 91-

180days

25% 181-

365days

C1 : 23% 0-

365days

D1 : 12% 0-

30days

16% 31-

60days

20% 61-

90days

24% 91-

180days

25% 180-

365days

23.04%P.A

21% P.A

15% P.A

18% P.A

21% P.A

24% P.A

24% P.A 12% P.A

to

18% P.A

Processing fees No No Low No No High

Documentation

Required

Minimum Minimum Minimum Minimum Minimum Maximum

38



Interest

Payment

Monthly Monthly Monthly &

Quarterly

Monthly Quarterly Lump

sum End

of the

Period

Repayment

Option

Part

payment

Available

Part payment

Available

Part

payment

Available

Part

payment

Available

Part

payment

Available

End of

the

PeriodLump

sum

Per Gram Rate

(Rs)

1700/- 1650/-

1400/-

1550/-

1750/-

1050/-

1700/-

1650/-

1456/-

1626/-

1798/-

1884/-

1650/-

Muthoot Finance Gold Loan:

Muthoot is a Kerala originated association set up by Muthoot Ninan Mathai in 1887 at

Kozhencherry in Travancore district which was later being adopted by M George Muthoot.

Loan is received within a time period of 5 min. It ranges from Rs 1500 to 1 crore. 0%

processing fees. Interest rate of 1%per month

Mannapuram Finance Gold Loan:

Mannapuram Finance also facilitates gold loan within 5 minutes. It helps to draw instant Cash

by subscribing gold ornaments and Jewellery. It provides loan at higher points, based on purity,

net weight of gold. The candidate must have one recent ID—Voter ID/ Ration Card/ Driving

License/ Passport. No time-consuming formalities involved.

Union Gold Loan:

Union gold loan provides credit facility to needy farmers. The lending rate is Rs 1800 per gram

gold ornaments. Based priority sector like agricultural purposes. Under non priority sector for

39



basic necessities for unforeseen expenses Loan amount consumption purposes is up to

Rs.2000/-. The Non-Priority Sector loan amount is max.Rs.5 lacs.

HDFC Gold loan:

HDFC gold loan term loan provides instant loans. Regular interest on loan is being granted.

Identity Proof like Passport Copy/ Voters ID card/ Driving License along with proof like Ration

card/ Telephone Bill/ Electricity Bill/ Rental Agreement/ Passport copy/Trade license /Shop &

Establishment License / Sales Tax certificate, 2 pass port size photographs.

SBI Gold loan:

SBI gold loan is loan which satisfies as a biggest advantage to overcome crisis and is a personalloan phenomena. It has low interest rate. The loan amount of Rs 10 lakh is attained by the

customer. It also provides gold loan for farmers for agricultural necessities. The main

documents required for applying gold loans are

Letter of witness in case of illiterate borrowers.

Two passport size photographs of the borrower.

DP Note delivery.

All the gold ornaments that are to be kept as mortgage for the loan.

Gold Loan application.

40



A new home brings with it new hopes, joys and emotions. At IIFL, we have shared new hopes,

joys and emotions with our customers. Every customer has a specific and unique concern and

our home loan product is customized to provide them solutions for their unique concern. IIFL

group has set up India Infoline Housing Finance Ltd. (IIHFL) to offer highly customizedfacilities of availing Home Loans.

They believe that in order to succeed, there need to offer not only competitive products, but also

the best possible service and value-added features and benefits. In a market where the basic

product is largely similar, the differentiator is our ability to understand the customer's need

completely and structure the value-adds appropriately.

Mortgage Loans

As of March 31, 2012, our Mortgage Loans distribution network consists of 34

branches of which 32 branches are co-located with the branch network of IIFL

Group. In addition we have access to about 79 relationship managers. We also

source our Mortgage Loans sales leads from our network of 208 DSAs, 19 FOS

and other alternate channels.

Mortgage Loans include Retail Mortgage Loans and Corporate Mortgage Loans.

These loans are bifurcated into Housing Loans and Loans Against Property.

As on March 31, 2012 our Mortgage Loans accounted for 44.7% of the

consolidated Loan Book.

41



Mortgage Loans portfolio includes Housing Loans and Loans Against Property in

the range of ` 0.5 million to ` 250 million categorized as retail and above ` 250

categorized as corporate as per the policy followed by our Company.

Housing Loans includes finance for purchase of flats, construction of

houses, extension and for improvement in the flats/homes and for acquiring plots of land.

Loan Against Property (“LAPs”) is availed for, working capital

requirements, for business use or acquisition of new property and for

financing construction projects.

Housing Loans and LAPs are secured by equitable mortgage or a registered

mortgage of the residential property, land, under construction residential/

commercial properties and fully constructed properties, as applicable. We also

obtain personal guarantees from all property owners. As a policy for the retail

segment

we lend up to 65% of value of property for Loan Against Property and upto 80%

against value of property for Housing Loans. For the corporate segment we lend

up to 50% of the value of the property. Additionally we also obtain personal

guarantees from promoters, key shareholders and directors and all property

owners including corporate guarantee of company, charge on sales receivables on

the project, pledge of shares (in case of private limited/limited companies) from

all property owners. The Corporate Mortgage Loans are availed by real estate

developers and large corporates.

Pricing of Retail Mortgage Loans is driven by the risk profile of the borrower, the

product and the market demand. Loan applications are sourced through directsourcing model, DSA network & other alternate channels.

The pricing in case of Corporate Mortgage Loans is driven by the risk profile of

the borrower, the product and the market demand.

42



End to end processing time for loan applications is typically within 20 working

days from date of receipt of complete application.

The maximum tenure for Housing Loans is 240 months while the average

sanction tenure is 153 months. The maximum tenure of Loans Against Property is

180 months while the average sanction tenure is 120 months.

Home Loan Features

• Home loan amount suited to your needs

• Home loan tenure upto 20 years

• Simplified documentation

• Purpose:

• Purchase of residential units (apartment/row-house/bungalow),

purchase of plots, purchase of under-construction residential property

(apartment/row-house/bungalow) by approved builders, buyout, self-

construction of residential property, Commercial, Mixed use ready

property

•

Loan against security of residential/commercial/mixed use property

• Purchase of DDA (Delhi Development Authority) & Society Ready

Flats on 1st POA in Delhi.

• Self-construction on a plot

• Refinancing of purchase or construction (self construction - currently

under construction) within 6 months (refinance of amount mentioned

in registered sale deed)• Take-over of ready property

Insurance options for your Home loan at attractive premium

43



No matter what the requirement, we have an appropriate plan for

you. Get the best deals, and finance your perfect home, only

from IIHFL

Key Customer segments

• Salaried class: Corporate salaried employees, Government employees &

salaried consultants.

• Self employed: Proprietorship, Partnership, Companies & Professionals.

Eligibility Income criteria

Salaried Gross salary of Rs. 2.5 Lacs p.a.Self Employed Min. Profit after tax of Rs. 2 Lacs p.a.

Mandatory Rule The minimum income shall be computed by

taking the income of applicant and one co-

applicant.

Where a guarantor is taken, the guarantor

should also meet the minimum income criteria

Documentation - Salaried Customer

44



Documentation – Self Employed Customers

Objectives :

1. To promote good and fair practices by setting minimum standards in dealing with

customers;

2. To increase transparency so that the customer can have a better understanding of what

they can reasonably expect of the services;

3. To encourage market forces, through competition, to achieve higher operating standards;

4. To promote a fair and cordial relationship between customer and IIHFL; and to foster

confidence in the housing finance system.

Application of the code :

This code shall apply to all employees of IIHFL and other persons authorized to represent it in

the course of its business, whether the products and services are provided across the counter,

over the phone, by post, through interactive electronic device, on the internet or by any other

method.

45



Commitments :

IIHFL shall adhere to this code to act fairly and reasonably in all dealings, on the ethical

principle of integrity and transparency, to meet the standard practices prevalent in the housing

finance industry.

IIHFL would provide clear information, without any ambiguity, to the customer in

understanding:

1. Products and services together with its terms and conditions including interest and

service charges.

2. Benefits available to customer.

IIHFL will deal quickly and sympathetically in correcting mistakes if any, and attend to

customer's complaints in light of the objectives of this code.

IIHFL shall treat all personal information of customers as private and confidential and shall not

divulge any information to third person unless required by any law or Government authorities

including Regulators or Credit agency or where the sharing of information is permitted by the

customer.

IIHFL would provide, on request, copy of the Code to the existing borrowers and new customer

prior to commencement of business transaction.

IIHFL shall not discriminate its customers on the basis of race, caste, gender, marital status,

religion or disability. However the restrictions, if any, as mentioned in the loan products shall

continue to apply.

Disclosure and Transparency :

IIHFL would provide information on interest rates, common fees and charges through:

a. Putting up notices in branches;

b. Through telephones or help lines

c. Through designated staff/help desk

d. Providing service guide/tariff schedule.

e. Providing Fees/charges payable for processing the loan application

f. Providing amount of fees refundable if amount is not sanctioned or disbursed.

g. Providing structure of prepayment options and charges.

h. Providing details of penalty payable on delayed repayment.

46



i. Providing details on conversion charges for switching loan from Fixed to Floating rates

and vice versa.

j. Provide details on Interest reset clause.

k. Disclose “all in cost” to the client which shall include charges involved in processing

and sanctioning of Loan Applications.

IIHFL shall provide payment of Charges which shall be non discriminatory to its customers.

Advertising, Marketing and Sales :

IIHFL shall ensure that all advertising and promotional material is clear and not misleading. The

Fair Practice Code shall also apply to sales Associates / representatives of the company to the

extent of their identification when they approach the customer for selling products personally.

In case of any advertisement in any media and promotional literature that draws attention to a

service/product and its interest rate IIHFL shall also provide the details of other fees or charges,

if any. Further on the request of the customer IIHFL shall provide the details of relevant terms

and conditions.

Credit Reference Agencies :

IIHFL would give information about customers to credit reference agencies on:-

a. Opening of an account

b. The customer fallen behind with his/her payments and the performance of loan account

which includes how much loan has been sanctioned and the subsequent performance

c. Legal proceedings have been initiated against the customer to recover the dues.

d. Debts settled through legal recourses against the customer

IIHFL may give credit reference agencies other information about the customer's account if law

requires it or the customer has given them his/her permission to do so.

Collection of Dues :

Whenever loans are given, IIHFL would explain to the customer the repayment process by way

of amount, tenure and periodicity of repayment. However if the customer does not adhere to

47



repayment schedule, a defined process in accordance with the laws of the land shall be followed

for recovery of dues. The process will involve reminding the customer by sending him/her

notice or by making personal visits and / or repossession of security, if any.

IIHFL staff or any person authorized to represent the company in collection of dues or/and

security repossession shall identify himself / herself and display the authority letter issued by

the IIHFL and upon request, display his/her identity card issued by the IIHFL or under authority

of the IIHFL. IIHFL shall provide the customers with all the information regarding overdue.

All assistance shall be given to resolve disputes or differences regarding dues in a mutually

acceptable and in an orderly manner.

During visits to customer's place by the person authorised by IIHFL for dues collection or/and

security possession/repossession the following guidelines shall be followed:

1. Customer would be contacted ordinarily at the place of his / her choice absence of any

specified place at the place of his / her residence and if at his / her residence, at the place

of business / occupation.

2. Identity and authority to represent the Company shall be made known at the first

instance.

3. Customer's privacy should be respected.

4. Interaction with the customer shall be in a civil manner.

5. The Company representatives shall contact the customers between 0700 hrs and 1900

hrs unless the special circumstances of the customer’s business or occupation otherwise.

6. Customer’s request to avoid calls at a particular time or at a particular place honored as

far as possible.

7. Time and number of calls and contents of conversation would be documented.

8. All assistance should be given to resolve disputes or differences regarding mutually

acceptable and in an orderly manner.

9. During visits to customer’s place for dues collection, decency and decorum be

maintained.10. Inappropriate occasions such as bereavement in the family or such other occasions

should be avoided for making calls/visits to collect dues.

48



Know Your Customer (KYC) Guidelines :

IIHFL shall explain the requirements of KYC guidelines to its customers and inform them about

the documents required for establishing the identity of the customer before loan sanctioning,

account opening and operation.

IIHFL would obtain only such information to meet with company's KYC, Anti-Money

Laundering or any other statutory requirements. In case any additional information is asked for,

it will be sought separately and shall specify the objective of obtaining such additional

information.

Loans :

Assessment of Loan Repayment Capacity by IIHFL :

All loan application received by IIHFL will be processed inline with the internal policies and

criteria’s. If IIHFL cannot provide the loan to the customer, it shall communicate the same to the

customer through its appointed representatives or directly to the customer verbally. In case

customer requires the same in writing the reason(s) for rejection can be provided

Applications for Loans and its Processing :

a. At the time of sourcing a loan product, IIHFL shall provide information about interest

rates applicable, as also the fees/charges, if any, payable for processing, pre-payment

options and charges, if any, and any other matter which affects the interest of the

borrower.

b. All particulars required for processing the loan application shall be submitted to IIHFL

at the time of application. In case it needs any additional information, IIHFL would

contact the customer.

c. IIHFL shall convey to the customer the loan sanction along with the terms and

conditions thereof.

d. The customer is entitled to one set of authenticated loan documents on execution of the

same.

e. IIHFL shall not discriminate on grounds of sex, caste and religion in the matter of

lending. However, this does not preclude IIHFL form instituting or participating in

schemes framed for different sections of the society.

49



f. IIHFL at its discretion shall process requests for transfer of a loan account, either form

the borrower or from a bank/financial institution, in the normal course.

g. Before taking a decision to change any terms and conditions including disbursement

schedule, interest rate, service charges, recall/accelerate payment or performance under

the agreement or seeking additional securities or any other charges, IIHFL shall give

notice to borrowers in consonance with the loan agreement.

h. IIHFL shall release all securities on repayment of all dues or on realization of the

outstanding amount of loan subject to any legitimate right or lien for any other claim

that IIHFL may have against borrower. If such right of set off is to be exercised, the

borrower shall be given notice about the same with full particulars about the remaining

claims and the conditions under which the company is entitled to retain the securities till

the relevant claim is settled/paid.

Guarantors:

When a person is considered to be a guarantor to a loan, IIHFL shall inform him/her the

following under acknowledgment-

a. Letter/ Deed of Guarantee stating the terms of liability as guarantor.

b. IIHFL shall keep him/her informed of any default in servicing of the loan by the

borrower to whom he/she stands as a guarantor.

Branch Closure/ Shifting:

IIHFL shall inform the customer in the event of closure/shifting of its branch office.

Communication with the customer:

Customers should be able to access the Company through any of the following means:

1. Walk In to branches (as mentioned in Company brochure/website/any other leaflet)

2. Telephone, Fax and Email ID (as mentioned in Company brochure/website/any other

leaflet)

Complaints :

IIHFL would strive for customer satisfaction within the framework of law, adopted policies and

procedures.

50



In case of any grievance, the customer may approach the In-Charge of the business location

where he / she had his / her account and register the complaint in the 'Complaint Register'

available with the In-Charge.

On registering the complaint, the customer should obtain complaint number and date for future

reference.

Customer may also write / communicate with the concerned location for redressal of the

grievance to [email protected].

The credit score for housing loans are calculated using 18 parameters namely :

1. Age

2. No. Of Earning Applicants

3. Net Salary4. Cash Profit & Other Income

5. DBR

6. LTV

7. Loan Amount

8. Net Sales

51

mailto:[email protected]

mailto:[email protected]



9. Type Of Constitution

10. Method for Calculating Net Income

11. CIBIL Score

12. Cheque Return

13. Builder/Plot Category

14. Construction Status

15. 1st Home/ 2nd Home

16. Base Repo Rate

17. Loan Tenure

18. Severity Deviation

This credit score will be used to decide the risk profile of the borrower and hence the interest

rate to be charged.

For an individual home loan (residential collateral) rate of interest ranges from 11.50% to

14.00%.

EMI

EMI (Equated Monthly Installment) is the amount payable to the lending institution every

month, till the loan is paid back in full. It consists of a portion of the interest as well as the

principal.

Tax Benefit

Resident Indians are eligible for certain tax benefits on principal and interest components of a

loan under the Income Tax Act, 1961. Interest repayment of Rs. 1, 50,000 p.a. can get you a tax

saving upto about Rs. 50,490 p.a. Moreover, you can get added tax benefits under Sec 80 C on

repayment of principal amount upto Rs. 1, 00, 000 p.a. that can further reduce your tax liability

by about Rs. 33,660 p.a.

Securities Required

In most cases, the property to be purchased itself becomes the security and is mortgaged to the

lending institution till the entire loan is repaid.

Loan Amount

52



One can take minimum of 5 Lac & maximum of 10 Cr subject to your income eligibility as

well.

Repayment of Loan

One can pay either by way for Electronic Clearing System (ECS) or by way of Postdated

cheques (PDC)

Loan against property

Loan against property is a secured avenue for lending to small businesses against their working

capital and or project finance needs. The opportunity landscape is very large given that small

businesses do not get adequate flow of credit from the commercial banks but make a significant

contribution to the economic growth.

Loan Features

Loans to expand your business or to meet any personal need.

Loans available against residential, commercial and industrial property.

Maximum loan to value available.

Repayment through monthly installment.

High tenure loans for ease of repayment

Attractive interest rates

Specially designed products for self employed

Hassle free process / Door step service.

Minimum documentation

Loan transfer- You can also transfer your existing loan against property or home loan

from another institution at attractive rate of interest for personal or business purpose.

53



Key Customer segments

Salaried class: Corporate salaries employees, Government employees & salaried

consultants.

Self-employed: Proprietorship, Partnership, and Companies & Professionals.

Eligibility Income criteria

Non-Prime Home Loans –LAP Salaried:

Rs. 1 Lac per annum (after adjustment of tax)

Self Employed:

Profit after tax Rs 1 lac p.a.

Loan Amount

One can take minimum of 10 Lac & maximum of 10 Cr subject to your income eligibility as

well.

Co-applicant Requirement

All the co-owners of your property will have to sign up as co-applicants. All the persons whose

income has been considered must be co-applicants to the loan.

Rate of Interest

The rate of interest varies depending upon market rates & your loan amount, property type,

income etc. and this will be communicated to you by our sales representatives.

54



Mortgage Loans and Healthcare Finance

Initial Evaluation

In accordance with our credit policy, once a customer has been identified and has completed an

application, the loan proposal is evaluated on the prescribed parameters like:

Past history of borrowing with us.

Credit appraisal note is completed and signed by all required to approve.

Completion of the prescribed loan documents, KYC documents as prescribed by RBI.

55



As a part of the verification process, our officers undertake the prescribed checks. The checks

include document verification and personal discussion. We also undertake independent fraud

control checks.

In addition to the aforesaid we also undertake credit and financial background check on each

borrower and provide legal and technical evaluation of security. We also obtain a title search

report. We also rely on external appraisals of all properties including valuations by international

property consultants for large ticket Mortgage Loans. Title search is conducted by empanelled

lawyers.

Credit Controls

Credit Control policies & procedures are laid down in product policies approved by the board of

directors, other senior management and risk Only senior resources with relevant work

experience are allocated authorities for transaction approvals.

External agencies for credit operations are appointed based on past experience, reputation and

reference checks. High ticket loans move through a centralized underwriting process &

committee approvals in addition to the local process. Dual underwriting helps in enhancing

controls further.

Audit

The audit function reports independently to the Board of Directors. All loans go through an

audit process at a transaction level. Final disbursal authority for all cases rests with the audit

function. Loan disbursals require a case level sign off from audit in addition to approvals from

the authorized signatories.

Operational controls

This is an independent & centralized function and additionally checks loans for adherence to

policy parameters.

For every loan proposal, disbursals are approved by the central operations and audit. Upon loan

disbursement approval, cheques instructions are issued centrally while printing is done at the

respective locations.

Credit Score & Portfolio tracking reports

56



The credit score is utilized in the underwriting process for risk containment. A minimum score

cut off is used and all cases below cut off are reviewed by senior credit members. The score

predicts the likelihood of more than 91+ days delinquency on one or more trades in the next

twelve months. It uses attributes based on credit behavior information, delinquency measures,

days past due, amount past due, inquiries, trade attributes, age, type, mixture.

In addition, monthly portfolio quality reports are used for risk management. Performance is

reviewed & TTD (Through-The-Door) population is monitored based on these reports.

Extensive MISs by segments (salaried/self employed, commercial/residential, sourcing channels

etc.) are used to monitor & review approval rates, delinquencies, performance etc. Thrust of

business is monitored through sales reports. Underwriting efficiency is measured through

application status reports that provide approval/rejection rates and work-in-progress.

India Infoline Finance Limited

Collections

Collections are done through in-house managers & agencies. External agencies are selected

based on their prior experience, reputation & market references. These are managed by

collection managers employed by our Company. The collections function is further

complimented & strengthened by the involvement of the sales mangers & credit underwriters.

These are resources that interact closely with the customer at the time of loan disbursal. Their

involvement in the collection process ensures higher collection efficiency & better customer

relationships.

Taking a Housing Loan? Check how much will be your EMI

Loan Amount (Rs.)

Interest rate %

Tenure Years

57



Result

Your housing loan EMI comes to Rs.13167.90 p.m.

Explanation

The EMI (Equated Monthly Installment) is fixed for the tenure of loan. Your EMI has two

components: principal and interest.

In the initial years, the interest component is higher which decreases with time and the

principal component increases with time. EMI depends on the loan amount, interest rate and

tenure of loan.

Healthcare Finance

As of March 31, 2012 our Healthcare Finance distribution network consists of 34 branches of

which are collocated with the branch network of IIFL Group. In addition, we have expanded the

team of relationship managers because of tie ups with healthcare manufacturers. The health care

business also has association with direct sales agents and alternate channel partners for sourcing

the business. Further, the business now has the capability to source from all IIFL locations,

including the Gold branches thus significantly increasing the distribution capability.

Healthcare Finance is a business vertical dedicated at offering a customized financial solutions

to Doctor, Diagnostics Centre, Hospitals, Nursing home etc. for their funding needs.

With 1.2 beds per 1000 population there is immense growth potential in this segment. Growing

incomes, literacy and awareness bode well for the Indian healthcare services market.

Considering that 80% of future Investment in Healthcare is expected to come from Quick &

Hassle free loan

58



Features

Loan amount ranging from Rs 5,00,000/- onward

Tenor ranging from 12 to 84 Months

Flexible Loan to Value

Funding for Ancillary equipment

Flexible EMI options

No Additional Collateral *

Minimum Turn Around TimePvt Sector, we at IIFL see a lot of synergies between the

Healthcare fraternity and IIFL for mutual growth opportunities.

IIFL is extremely delighted to share that it is present in Healthcare Finance Business.

Customer Key segment

Medium & Large Private Hospitals, Nursing Homes, Medical & Dental Colleges

Diagnostics Centre and Pathology Laboratories

Eye Centres

Small and Medium size Specialty Clients likes skin Clinics, Dental Clinics etc

Medical Practitioners

Public Private Partnership Venture's

Facilities available

New Medical Equipment Finance

Ancillary Equipment finance (AC’s, Lifts etc.)

Re-finance on existing / used equipment

Project financing for brown field expansion

59



Balance Transfer / Switch for existing term loans

Hospital Infrastructure Finance

Receivable Financing

Leasing of Medical Equipments

Professional loans to Doctors

Advisory services

- Public Private Participation - Acquisition – Valuation

Eligibility

Indian Citizen

Minimum age of 24

Minimum Qualification MBBS (Applicant / Guarantor)

Minimum Experience of 3 Years*

Good Repayment history

Interest Rate

60



Interest rates offered to a loan borrower are arrived at after consideration of various parameters.

Typical metrics used for arriving at the final rate of interest which will be charged involves the

following:

Type of Equipment / Manufacturer

Tenor of Loan

Financial Strength of Applicant

Applicant's Experience in similar field.

ROI range

Pricing ranges from 13.5% - 15 % per annum

Person Eligible

-Any Self-employed doctor with minimum experience of 3 years

-Any Partnership, Trust, Society & Pvt Ltd company in Healthcare Services

Loan Amount

A maximum of 85% of Equipment Cost, depending upon the financial strength of the customer

Tenure

Tenure can vary from minimum of 12 months to maximum of 84 Months

Capital Market Finance

As of March 31 2012 our Capital Market Finance accounted for 11.86% of our Loan Book on a

consolidated basis.

Capital Market Finance includes

Loan against Securities

Margin funding for broking clients

IPO financing

Promoter Financing

Open offer financing

61



Our Capital Market Finance products are secured by pledge of listed equity shares, vested

ESOPs, mutual fund units, structured notes bonds, debentures and collaterals approved by the

Credit Policy (“Approved Securities”) and in appropriate cases by mortgage of real estate

along-with Approved Securities. Depending on the quality of the security, we lend up to 90 %

value of the Approved Security except in case of IPO

Financing where margins are dependent on Over Subscription of the Issue. The maximum

tenure for Capital Market Finance is 12 months while the average tenure is three to four months.

The target customers are promoters, high net worth individuals, corporate & NBFCs,

individuals, proprietary firms, corporate entities, private trusts or partnership of individuals and

limited liability partnership. We provide single party loan exposure upto `1,800 million and

group exposure upto `3,000 million, subject to RBI credit concentration norms.

We believe we have a competitive edge with respect to our Capital Market Finance business

considering our margins, our ability to execute structured and unique transactions with quick

turnaround, higher single party and group exposure as compared to peers, competitive rate of

interest, and best in the class loan management system for superior client experience.

Capital Market Finance

Capital market loan origination is sourced through direct sales, branch network, retails and

wealth teams of IIFL. As of March 31, 2012, we have access to 2,900 sales executives from the

retail teams and 120 salesexecutive from the wealth teams of IIFL.

Initial Evaluation

The sourcing of the client is done either by the direct sales team, wealth management RMs or

the retail RMs. Most of the clients are already clients of the Broking and Wealth divisions of

IIFL and hence have a track record of doing business with the IIFL Group.

In accordance with our credit norms, once a client has agreed to our commercial terms and has

acceptable collateral for the loan, the evaluation is done following parameters:

Past history of borrowing with us.

Market intelligence on the borrower.

Credit appraisal note is completed and signed by all required to approve.

Various credit checks viz. SEBI, Watchoutinvestors, CIBIL, search engines, etc. on

borrowers/ directors of the borrowing entity.

62



Completion of the prescribed loan and KYC documents.

Pre-disbursement Audit and Operational Controls

This is an independent & centralized function and additionally checks loans for adherence to

policy parameters. The documents are vetted and verified by an independent pre-audit team on

their completeness and adherence to credit policy. Any kind of discrepancies are highlighted to

the business team who then gets them rectified. Only upon satisfactory completion of pre-

disbursement audit, the audit team authorizes the credit limit in the loan management system.

Collateral and Risk management

The prices of the securities are updated on a daily basis on the basis of end of day file received

from the stock exchanges. On volatile days price files are uploaded on a realtime basis. The

clients are then intimated of the margin shortfalls on phones/ emails/ letters.

The collateral in the loan management system is matched with the securities lying with the

depositories on a daily basis through an automated process by the operations team.

Margins on each of the loans are monitored on real time basis and further margin is called for as

and when the need arises. This helps us to maintain comfortable margins and enables us to

mitigate risks against potential defaults. Margin calls are sent to client on daily basis and in case

of a shortfall when the client is unable to maintain the margin, the loan value is realised through

the sale of the securities at the earliest. Our

centralized risk management system helps us to monitor our client’s credit exposure on a real

time basis, enabling us to do margin calls on a dynamic basis and square-offs in a volatile

environment.

Interest and principal repayments

Interest debit notes are issued to the clients on a monthly/ quarterly basis and follow-up is done

by the business team for the collections. Penal interest is charged on delayed payment of

interest. Ageing analysisis done on the interest receivables and incase interest is not received

upto a certain period; securities are sold to recover the same.

National Pension System

63



The government has declared an additional benefit called SWAVALAMBAN which is valid* till

FY 2016-17.

To get the benefit of Swavalamban scheme - Investor should have invested minimum Rs 1000/-

and Maximum Rs. 12000/- in any particular Year.

Investors, who satisfy the above criteria, will get Rs 1000/- contribution from the Government

for that particular year.

Documents Required

1 self-attestation Xerox copies of Identity proof, Address proof & a recent colour photograph is

required along with the application form

Identity Proof documents (Any 1 of the following)

School leaving Certificate

Matriculation Certificate

Degree of Recognized Educational institution

Depository Account Statement

Bank Account Statement/ Passbook

Credit Card

Water Bill

Ration Card

Property Tax Assessment Order

Passport

Voter’s identity Card

Driving License

PAN Card

64



Certificate of Identity signed by a Member of Parliament or Member of Legislative

Assembly or Municipal Councilor or a Gazette Officer.

Address Proof documents (should not be more than six months old on the date of

submission of application.) (Any 1 of the following)

Electricity bill

Telephone bill

Depository Account Statement

Credit Card Statement

Bank Account Statement /Passbook

Employer Certificate

Rent Receipt

Property tax assessment order

Passport

Voter’s Identity Card

Driving license

Certificate of address signed by a Member of Parliament or Member of Legislative

Assembly or Municipal councilor or a Gazetted Officer.

Charges

Account Opening Charges - Rs. 35/- (Only one time at the time of registration)

Annual Maintenance Charges - Rs. 70/- (Charged at the end of every year)

Tax Benefit

You will get a tax benefit u/s 80CCD.

Premature withdrawal benefit

Please find the below mentioned withdrawals –

After 60 years & up to 70 years - 60% can be withdrawn

Before 60 years - Only 20% can be withdrawn

65



National Pension System (Corporate) –

Features

Under the newly introduced Section 80CCD (2), up to 10% of an employee's basic

salary put in the New Pension Scheme is tax deductible.

You should be between 18- 60 Years of age as on the date of submission of his /her

application to the POP

NPS is open to every Indian citizens of India with effect from May 1st 2009. Even NRI

can join in NPS

Low Cost - Annual Fees of .00009% (90 paisa for Rs 10,000) for fund management

You can choose from six different funds for investment

Withdrawing from one fund and investing in another will not have any tax implication

No upper limit on Investment

Minimum limit of investment is 6,000 per year

Tax benefit over and above the current limit of 1Lac U/s 80C

All citizens between 18 and 60 years can invest in NPS

Premature exits before 60 yrs : only 20 % of corpus can be withdrawn

Exit after 60 yrs – 60% of corpus can be withdrawn

66



On Retirement 60% can be withdrawn in lump sum or in a phased manner. Minimum

10% of the pension wealth should be withdrawn every year.

NPS can be run parallel to Superannuation, Gratuity, PF, VPF and any other pension

schemes offered to the employees of organized entities

The subscriber can contribute the amount through cash/ local cheque/ ECS

Portable – you can operate your account from anywhere in the country , even if you

change your city, location or job

Choice of pension fund options: Asset Class E, Asset Class C, Asset Class G

Basic eligibility regarding KYC, age and exit norms for subscribers is in line with the

UoS Model

Stock Holding Corporation of India Ltd provides custodial services under NPS

All transactions can be tracked online through CRA system. Employer and employee

can check fund and contribution status through CRA website.

PENSION CONTRIBUTION

All three variations of contributions from employer and employee possible:

Equal contributions by employer and employee

Unequal contribution by the employer and the employee

Contribution from either the employer or the employee

Tier- I account

This is a non-with drawable account

Minimum amount per contribution Rs.500/-

Minimum contribution per year Rs.6000/-

Minimum number of contribution – 04 per year

67



Penalty of Rs.100/- to be levied for not maintaining the minimum contribution / balance

Tier- II account

This is a voluntary savings facility available as an add-on to any Tier-1 account holder

Subscribers will be free to withdraw their savings from this account

Premature withdrawal allowed

Minimum number of contribution – 04 per year

Minimum account balance at the end of FY – Rs.2000/-

Offers Tier II account which is a voluntary savings facility with anytime

liquidity/withdrawal option

Minimum account per contribution Rs.250/-

Minimum contribution at the time of account opening Rs.1000/-

Penalty of Rs.100/- to be levied for not maintaining the minimum contribution / balance

Income Tax Deduction Under section 80CCC, 80CCD (2)

An advantage – Restructuring of pay – Employer – Employee

Employers may provide an option to their employees to restructure salaries (CTC) incorporating

a component towards contribution to NPS. Employees, by choosing to opt for NPS by

restructuring their CTC and asking the employer to contribute 10% of the basic to NPS would

stand to gain by making their salaries tax efficient. Tax deductions by investing under the newly

introduced Section 80CCD (2)

Employers can contribute 10% of basic of an employee salary towards employees NPS account,

which is a deductible business expense. Restructuring of salary would benefit employees as the

amount deposited towards contribution made by the employer to the NPS account would not

form part of the taxable income, neither will it be taxed in the employee’s hands as perquisite

nor would it form part of the limit of INR 1lac under section 80C The following is an example

68



as to how an employee can derive tax benefit out of restructuring the CTC incorporating NPS as

part of the CTC.

NPS offers additional tax sops

There are three tax provisions under the Income Tax Act, 1961 that you must know to take full

tax advantage on NPS contribution.

Section 80 CCD (1): An employee can claim tax deduction of up to 10 per cent of the salary

contributed towards NPS.

Section 80 CCD (2): The employee can claim tax deduction on contribution made by the

employer, not exceeding 10 per cent of salary.

Section 80 CCE: Employee can claim the self-contribution subject to the Rs one lakh limit in

Section 80C but will also be able to claim deduction on employer contribution to NPS above the

one lakh limit.

Fees and Cost for National Pension System - Corporate

The expenses on the NPS are really low.

The annual fund management charge is 0.0009%, which is probably the lowest in the world.

69



IIFL Dynamic Bond Fund

NFO Opens: 06 June, 2013.

NFO Closes: 17 June, 2013.

Type: An Open ended Income Scheme.

Plans: Regular Plan and Direct Plan

Options (Under each plan): Dividend, Growth and Bonus.

Investments: The scheme will invest in a range of debt and money market instruments of

various maturities.

Objective: The investment objective of the scheme is to generate income and long term gains

by investing in a range of debt and money market instruments of various maturities. The scheme

will seek to flexibly manage its investment across the maturity spectrum with a view to

optimize the risk return proposition for the investors.

Benchmark : CRISIL Composite Bond Fund Index.

Asset Allocation: Debt Market Instruments: 0%-100%, Money Market Instruments 0%-100%.

Fund Manager: Rahul Aggarwal.

Mr. Rahul Aggarwal, aged 31 years, is a PGDM from IIM Calcutta, B.E. (Computer Science)

and Certified FRM (Financial Risk Manager). He has over 8 years of experience including

experience in capital markets, especially on fixed income, credit risk, and trading and portfolio

management. Prior to joining IIFL Mutual Fund, he was associated with L&T Mutual Fund.

Load Structure: Entry Load is Nil; Exit Load is 0.50% if redeemed on or before 6 months

from date of allotment.

Minimum Application Amount:

10,000 and in multiples of 100 thereafter.

If Systematic Investment Plan (SIP) availed.

Monthly option - 1000 per month for a minimum period of six months.

Quarterly Option – 1500 per quarter for a minimum period of four quarters

70



Suggestions...

1...Individual branch over all activities should be more powerful..

2..Branch those who located nearby should be merge for powerful marketing activities like...e.g.

Road shows....some shows in railway stations and societies..

3..some attracting activities in festivals like ganpati ,navratri ,diwali etc.

4..There should be banner, holdings advertising in railway stations like muthoot and

mannapuram does......

5..should be introduce new new schemes in each month....

6..Company should introduce a smart card system functional option to there old as well as new

customer for paying There INTREST as well as EMI . So it will increase customer relationshipwith company....and also It will help to reduce paper work load to staff....

Recommendation

1.when ever company opens any branch before that market research is important.

Through market research company comes to know about the people ,location and

requirements of the company and people.

2.most of the branches of IIFL faces strong competition from muthoot finance ,magma,mutuht

fincorp and mannapuram.tese branches are surrounded near our branch and take over market

share of our branch.

3.we have only 3 schemes of gold loan that is fast track, loan laxmi and jaldi loan.where as

many others company have 6 or7 seven schems of gold loan.

4.advertisement are very essential part of any business.Copmpany should spent money on

advertisement .With the help of advertisement people shold be aware about the company.

5.Company should use User friendly software inspite of system friendly software.

71



6.branches are facing many problems and are working under tremendous pressure of doing

Insurance.

7.iifl should motivate the Employees and Customer by introducing various incentives.

BIBLIOGRAPHY


http://www.indiainfoline.com/Aboutus/

http://www.iiflfinance.com/

http://www.iiflfinance.com/Products/GoldLoan.aspx

http://www.indiainfoline.com/MutualFunds/

http://www.neytri.com/gold-loans-what-you-must-know/