CHAPTER-I

INTRODUCTION
INTRODUCTION: -
Money is an essential element for any business, because it fulfills the short term and long-
term requirement of funds. It is not possible for the owner to bring all the money himself, so
he/she take recourse to loans and advances. Loans refer to a debt provided by a financial
institution for a particular period while Advances are the funds provided by the banks to the
business to fulfill working capital requirement which are to be payable within one year. The
loan amount is required to be repaid along with the interest, either in lump sum or in suitable
installments. It can be a term loan (payable after 3 years) or demand loan (payable within 3
years). In the same way, advances also requirement repayment along with the interest within
one year. These two terms are always uttered in the same breath, but there are a number of
differences between loans and advances.

Meaning of Loans and Advances: -

The term ‘loan’ refers to the amount borrowed by one person from another. The amount is in
the nature of loan and refers to the sum paid to the borrower. Thus, From the view point of
borrower, it is ‘borrowing’ and from the view point of bank, it is ‘lending’. Loan may be
regarded as ‘credit’ granted where the money is disbursed and its recovery is made on a later
date. It is a debt for the borrower. While granting loans, credit is given for a definite purpose
and for a predetermined period. Interest is charged on the loan at agreed rate and intervals of
payment. ‘Advance’ on the other hand, is a ‘credit facility’ granted by the bank. Banks grant
advances largely for short-term purposes, such as purchase of goods traded in and meeting
other short-term trading liabilities. There is a sense of debt in loan, whereas an advance is a
facility being availed of by the borrower. However, like loans, advances are also to be repaid.
Thus, a credit facility- repayable in installments over a period is termed as loan while a credit
facility repayable within one year may be known as advances.

Meaning of Loan: -
The amount lent by the lender to the borrower for a specific purpose like the construction of
the building, capital requirements and purchase of machinery and so on, for a particular period
of time is known as Loan. In general, loans are granted by the banks and financial institutions.
It is an obligation which needs to be repaid back after the expiry of the stipulated period.
The loan carries an interest rate on the debt advanced. Before advancing loans, the lending
institution checks the credit report of the customer, to know about his credibility, financial
position and capacity to pay.

Definition: -
According to Thembi Palane “a loan is a financial transaction in which one party (the lender)
agrees to give another party (the borrower) a certain amount of money with the total
expectation of repayment agreed upon by both parties. Usually there’s a predetermined time
for repaying a loan with conditions attached to it”
According to oxford dictionary “Money that someone borrow from a bank or other financial
organization for a period of time during which they pay interest”

Loan is classified in the following categories: -

On the basis of Security:
Secured Loan: The loan which is backed by securities is Secured Loan.
Unsecured Loan: The loan on which no asset is pledged as security is Unsecured Loan.

On the basis of Repayment:

 Demand Loan: The loan which is repaid on demand of the lender is Demand Loan.
 Time Loan: Loan, which is repaid in full at a future specified date, is Time Loan.
 Installment Loan: Loans which are to be repaid in evenly distributed monthly installments
is Installment Loan.

On the basis of Purpose:

 Home Loan
 Car Loan
 Education Loan
 Commercial Loan
 Industrial Loan
DEFINITION OF ADVANCES: -
Advances are the source of finance, which is provided by the banks to the companies to meet
the short-term financial requirement. It is a credit facility which should be repaid within one
year as per the terms, conditions and norms issued by Reserve Bank of India for lending and
also by the schemes of the concerned bank.

Definition: -
According to the oxford dictionary Advance means “an amount of money paid before it is due
or for work only partly completed”

They are granted against securities which are as under:

 Primary Security: Hypothecation of Debtors, Stock Pro-notes, etc.
 Collateral Security: Mortgage of land and buildings, machinery, etc.
 Guarantees: Guarantees given by partners, directors or promoters, etc.

The following are the forms of Advances: -

 Short term loans: Advance in which the entire amount is provided to the borrower at one
time.
 Overdraft: A facility provided by the bank in which the customer can overdraw money
from his account up to a specified limit.
 Cash Credit: A facility granted by the bank in which the customer can advance money up
to a certain limit against the asset pledged.
 Bills Purchased: An advance facility provided by the bank against the security of bills.
The Advantages and Disadvantages of Loan: -
Loan is a form of debt, often with interest. There are several reasons why people apply for
loans. Usually, they borrow money to purchase a house, buy a car, or start a business. Often,
applying for a loan is necessary because most do not have available financial resources, they
need to make a purchase. Other forms of loans, like the student loans have helped a lot of
students get through school. Those who use student loan debt consolidation clearly have
multiple student loans. They do this to manage their obligations better.
Since loan is borrowed, the lender expects to receive payment with the interest specified. In
addition, borrowers should make the payments at the specified due date for a certain period.
This is where most people have problems. Most problems start when people cannot make the
monthly payments required due to different circumstance. Some finds it difficult to pay their
loan because of the many other debts they have. Some encounter additional problems such as
medical emergencies and job loss.
Since getting a loan is a commitment, you have to be very careful with your decisions. Choose
the right lender. There is more to picking a lender than just looking for one with the least
interest. Keep in mind that those with low interest require longer period. Remember, when
choosing a lender, check its stability, its flexibility, repayment schemes, and interest rates.
Before you decide to get a loan, it is only right that you review its advantages and
disadvantages.

UTILITY OF LOANS AND ADVANCES: -

Loans and advances granted by banks and other financial institutions are highly beneficial to
individuals, firms, companies and industrial concerns. The growth and diversification of
business activities are affected to a large extent through bank financing. Loans and advances
granted by banks help in meeting short-term and long-term financial needs of business
enterprises. We can discuss the role played by banks in the business world by way of loans
and advances as follows: -
 Loans and advances can be arranged from banks in keeping with the flexibility in business
operations. Traders may borrow money for day-to-day financial needs availing of the
facility of cash credit, bank overdraft and discounting of bills. The amount raised as loan
may be repaid within a short period to suit the convenience of the borrower. Thus,
business may be run efficiently with borrowed funds from banks for financing its working
capital requirements.
 Loans and advances are utilized for making payment of current liabilities, wage and
salaries of employees, and also the tax liability of business.
 Loans and advances from banks are found to be ‘economical’ for traders and businessmen,
because banks charge a reasonable rate of interest on such loans/advances. For loans from
money lenders, the rate of interest charged is very high. The interest charged by
commercial banks is regulated by the Reserve Bank of India.
 Bank loans and advances are found to be convenient as far as its repayment is concerned.
This facilitates planning for future and timely repayment of loans. Otherwise, business
activities would have come to a halt.
OBJECTIVES OF THE STUDY

 To analyze different types of loans and advances made by Bajaj Finance Limited.

 To list out some important loans and advance of the Interest Bajaj finance limited

and their interest rates and security needed for granting loans and advances.

 To analyze the financial position of the Bajaj finance limited.

 To make suggestions and recommendations based on the study

 To have idea regarding various types of Loan and Advances of Bajaj Finance

Limited.

 To identify the loan sanction procedure in different sectors in last some years.

 To identify the credit approval, their securities and monitoring process of Bajaj

Finance Limited
SCOPE OF THE STUDY
 The study covers the following: Meaning of loans and advances, Utility of loans and

advances, Borrowing rate and lending rate, Lending of money, Nature and security of

loans, Procedure of granting cash credit, overdraft and discounting bills, Statutory &

other restrictions on loans & advances.

 The Advantages and Disadvantages of Loans, Engaging recovery agents by banks,

Functions of commercial banks.

 The role of commercial banks, Types of loans granted by commercial banks, The

study is limited to the information provided by the bank officials.

RESEARCH METHODOLOGY
Research methodology comprises defining and redefining problems, formulating hypothesis
or suggested solutions; collecting, organizing and evaluating data, making deductions and
reaching conclusions; and at last carefully testing the conclusions to determine whether they
fir the formulating hypothesis.

SOURCES OF DATA

Primary Data:
The primary data has been collected directly from the executives and employees of the Bajaj
Finserv by personal interview.

Secondary Data:
The secondary data has been collected from various published and unpublished source like:
Broachers, Director’s reports, published Financial Statements of the Bajaj finance limited,
Bajaj Finserv official websites and Annual general meeting.
 Newspapers
 Magazines,
 Journals,
 Books,
 Reports, Documents And Other Published Information,
 Banks Annual Reports,
 Manuals And Brochures Of Banks

REFERENCE PERIOD
This reference period is selected for the study for last 4 years i.e., 2016-18 to 2018-20. This
study was done on interpretation what made by comparing various data during research work.

STATISTICAL TOOLS USED FOR DATA ANALYSIS

 The statistical tools used to analyze the data are:

 Percentages Column Chart

LIMITATIONS OF THE STUDY
 All the possible care has been taken to collect the information and make the study as

authentic as possible. However, it is subjected to certain information.

 They are as under:All the findings and recommendations, which are stated, are

applicable only for the current period.

 The study is limited to the extent to the data given by the bank.

 Based on limited information it is not possible to arrive at a proper conclusion.

 The interpretation of the study is not complete as primary records of the bank are

inaccessible except Annual reports.

The Accuracy of the study depends on the accuracy of information and records provided by the

Bajaj Finance Limited.

 CHAPTER – II
REVIEW OF LITERATURE
REVIEW OF LITERATURE: -
Thilakam and Saravanan (2018) write on “CAMEL Analysis of NBFCs in Tamil Nadu” in
‘International Journal of Business and Administration Research Review’. Financial
intermediation is a crucial function of Banks, Non-Banking financial companies (NBFCs) and
Development Financial Institutions (DFIs) the post reform period in India is characterized by
phenomenal growth of NBFCs complementing the role of banks in mobilizing funds and
making it available for investment purposes.
During the last decade NBFCs have undergone wide volatility and change as an industry and
have been witnessing considerable business upheaval over the last decade because of market
dynamics, public sentiments and regulatory environment. To evaluate the soundness of
NBFCs in Tamil Nadu over a decade, the authors made an attempt of CAMEL criteria for
analysis of selected Companies. Based on findings the suggestions were offered to overcome
the difficulties face by selected NBFCs in their development.

Shail Shakya (2017) published a working paper entitled “Regulation of Non-banking

Financial Companies in India: Some Visions & Revisions”. Non-Banking Financial
Companies are pioneer in their cash deployment, accessibility to the markets and others to
count. NBFCs are known for their higher risk-taking capacity than the banks. Despite being
an institution of attraction for the investors, NBFCs have played a significant role in the
financial system. Many specialized services such as factoring, venture capital finance, and
financing road transport were championed by these institutions.
NBFC sector has more significantly seen a fair degree of consolidation, leading to the
emergence of large companies with diversified activities. However, the recent financial crisis
has highlighted the importance of widening the focus of NBFC regulations to take particular
account of risks arising from the regulatory gaps, from arbitrage opportunities and from inter-
connectedness of various activities and entities associated with the financial system. The
regulatory regime is lighter and different than the banks. The steady increase in bank credit to
NBFCs over the recent years means that the possibility of risks being transferred from more
lightly regulated NBFC sector to the banking sector in India can’t be ruled out.
Ravi Puliani and Mahesh Puliani (2016) writes a book entitled “Manual of Non-Banking
Financial Companies”. The book discussed the glossary of terms that are used in banking
operations and non-banking activities. The book covers the circulars and directions issued by
Reserve Bank of India from time to time to control, manage and regulate the business of
NBFCs.

Taxmann’s (2013) published “Statutory Guide for Non-Banking Financial Companies” is

published by Tax mann’s Publications, New Delhi. The book listed the laws relating to Non-
Banking Financial Companies. The rules and laws governing the kinds of businesses
undertaken by differ- ent types of NBFCs are also discussed.

Amit Kumar and Anshika Agarwal (2014) published a paper entitled “Latest Trends in
Non-banking Financial Institutions” in ‘Academicia: An International Multidisciplinary
Research Journal’. In Indian Economy, there are two major Financial Institutions, one is
banking and other is non-Banking. The Non-Banking Financial Institutions plays an important
role in our economy as they provide financial ser- vices on wide range, they also work to offer
enhanced equity and risk-based products, along with this they also provide short to long term
finance to different sectors of the economy, and many other functions. This paper examines
the latest trends in Non-Banking Financial Institutions. This paper analyzes the growth and
enhanced prosperity of financial institutions in India.

A potential cash machine Subramaniam, Arun June 2012

The article focuses on the emergence and growth of the Bajaj Finserv, a new company in
financial services industry in India, under the leadership of Sanjiv Bajaj, an engineer. It
informs that the company is diversified, well capitalized and soundly managed as it owes its
success to its growth in retail industries. It also informs that the focus of the company is on the
customers of retail industries as it has trained its agents to sell wider range of insurance
products.
Bajaj Finserv sacks some senior officials who were cutting deals to mask loan defaults
Finance Snapshot2014
The article reports that the Indian financing company Bajaj Finserv Ltd. has fired some of its
senior executives who were cutting deals to cover loan defaults. It states that two senior
officials of the group company Bajaj Finance Ltd (BFL) were fired, while three other
employees left the company. It mentions that the irregular transactions of the officials which
aimed at showing the borrowers' accounts had bounced.

Ramachandaran (1992), in his paper titled, “Profit Planning as a Management Tool for
Profit Maximisation” tried to analyse profitability position of the banks. Increasing emphasis
on goals, increase in establishment cost, NPAs, amount locked in sick units, unfavorable
deposit mix, compliance to statutory requirements were some reasons, 26 identified by him,
for declining profitability.
He suggested the following measures to redress the said problem: (i) Diversification of
business, (ii) Interest to be paid by RBI on CRR/SLR balances, (iii) Opting utilisation of
scarce resources by asset management, (iv) Better funds management, (v) Management of
non-performing advances, (vi) Professionalisation of bank management, (vii) Identification of
loss centres, (viii) Better role of government, and (ix) Upgradation of skills and mechanism.

Murthi and Saraswati (1996), in their paper titled, “Reducing Overdues in Credit Co-
operatives: Some Alternatives” undertook a study to evaluate the Quantitative Progress made
in respect of supply of Institutional Credit. Using the secondary data made available by RBI
in Statistical Statements relating to Co-operative Movement in India for a period of 6 years
from 1978 to 1983 and assessing the Loaning Policies of Girijan Co-operative
Corporation, Visakhapatnam, the study concluded that the progress in respect of supply
of credit was phenomenal over the period of study but this progress pales into significance, if
the magnitude of overdues was considered. It pointed out that the most unnerving aspect of
institutional credit was the alarmingly high percentage of overdues, i.e., about 43% of loan
recoverable in the second-half of the 80s in the case of co-operatives. The study was
conducted to find out whether it was possible to reduce overdues by
(1) making co-operatives the exclusive institutions of economically weaker sections-BY
RESTRUCTURING THEM; and (2) by effective changes in the Loaning Policies-BY
REVAMPING THEM. The study suggested that making co-operatives as exclusive
institutions of weaker sections, i.e., 28 making them homogeneous would not result in decline
in overdues, as mere homogeneity was not a sufficient condition. Further, regarding the
Revamping of Loaning Policies, the results were quite impressive as it resulted in significant
improvement in the Recovery Performance. It was finally concluded that the change of
Loaning Policies like Induction of Liaison Workers, efforts of Elders Committee, Motivated
Management would not have helped recovery of loans in the absence of homogeneity
ManishMittal and ArunnaDhademade (2015) they found that higher profitability is the
only major parameter for evaluating banking sector performance from the shareholders point
of view. It is for the banks to strike a balance between commercial and social objectives.
They found that public sector banks are less profitable than private sector banks. Foreign
banks top the list in terms of net profitability. Private sector banks earn higher non-interest
income than public sector banks, because these banks offer more and more fee-based services
to business houses or corporate sector. Thus, there is urgent 21 need for public sector banks to
provide such services to stand in competition with private sector banks

Vasantdesai (2015): The Reserve Bank of India plays a very vital role. It is known as the
banker’s bank. The Reserve Bank of India is the head of all banks. All the money
formulations of commercial banks are done under the Reserve Bank of India. The RBI
performs all the typical functions of a good central bank as it is involved in planning the
economy of the country. The main function is that the RBI should control their credit. It is
mandatory for the Bank to maintain the external value of the rupee. Major function is that it
should also control the currency.

Haron and Azmi (2016) asserted that, most business organizations, especially in developing
countries are highly dependent on bank loans as a source of capital and the ability of banks in
giving loans depends much on their ability to attract deposits. Freix as and Rochet (2008), as
cited in Fouopi-Djiogap and Ngomsi (2012), noted that bank loans are one of the most
important long-term financing sources in many countries. Fernando Ferreng (2016) it is
generally agreed that recent economic crisis intensified worldwide competition among
financial institution. This competition has direct impact on how bank deal with their
customer and achieve its objectives performance evaluation of banks is the key function for
improving banks performance. Banks profitability and success to a large extent depends on
bank branch financial performance

CHAPTER – III
INDUSTRY PROFILE
&
COMPANY PROFILE
NBFC - INDUSTRY OVERVIEW: -
A Non-Banking Financial Company (NBFC) is a company registered under the Companies
Act, 1956 engaged in the business of loans and advances, acquisition of
shares/stocks/bonds/debentures/securities issued by Government or local authority or other
marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business
but does not include any institution whose principal business is that of agriculture activity,
industrial activity, purchase or sale of any goods (other than securities) or providing any
services and sale/purchase/construction of immovable property. The NBFC sector is an
important part of the Indian financial sector. They have shown dynamism in delivering
innovation and in assisting financial inclusion.
NBFCs typically have several advantages over banks due to their focus on niche segment,
expertise in the specific asset classes, and deeper penetration in the rural and unbanked
markets. However, on the flip side, they depend to a large extent on bank borrowings, leading
to high cost of borrowings and face competition from banks which have lower cost of funds.
The growing asset size of the NBFC sector has increased the need for risk management in the
sector due to growing interconnectedness of NBFCs with other financial sector intermediaries.
The Reserve Bank of India (RBI) has been in the recent past trying to strengthen the risk
management framework in the sector, simplify the regulations and plug regulatory gaps so as
to prevent regulatory arbitrage between banks and NBFCs.
The Reserve Bank of India released the ‘Revised Regulatory Framework for NBFCs’ on
November 10, 2014 which broadly focuses on strengthening the structural profile of NBFC
sector, wherein focus is more on safeguarding of the depositor’s money and regulating
NBFCs which have increased their asset-size over time and gained systemic importance.

Due to subdued economic growth, last two years, have been challenging period for the
NBFCs with moderation in rate of asset growth, rising delinquencies resulting in higher
provisioning thereby impacting profitability. However, comfortable capitalization levels and
conservative liquidity management, continues to provide comfort to the credit profile of
NBFCs in spite of impact on profitability.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM): -
Non-banking finance companies (NBFCs) form an integral part of the Indian financial system.
They play an important role in nation building and financial inclusion by complementing the
banking sector in reaching out credit to the unbanked segments of society, especially to the
micro, small and medium enterprises (MSMEs), which form the cradle of entrepreneurship
and innovation. NBFCs’ ground-level understanding of their customers’ profile and their
credit needs gives them an edge, as does their ability to innovate and customize products as
per their clients’ needs. This makes them the perfect conduit for delivering credit to MSMEs.
However, NBFCs operate under certain regulatory constraints, which put them at a
disadvantage vis-à-vis banks. While there has been a regulatory convergence between banks
and NBFCs on the asset side, on the liability side, NBFCs still do not enjoy a level playing
field. This needs to be addressed to help NBFCs realize their full potential and thereby
perform their duties with greater efficiency.
Moreover, with the banking system clearly constrained in terms of expanding their lending
activities, the role of NBFCs becomes even more important now, especially when the
government has a strong focus on promoting entrepreneurship so that India can emerge as a
country of job creators instead of being one of job seekers. Innovation and diversification are
the important contributors to achieve the desired objectives.

IMF (INTERNATIONAL MONETARY FUND) CUTS INDIA’S GROWTH RATE TO

4.8% CITING SLOWDOWN IN LOCAL DEMAND, STRESS IN NBFC SECTOR
 8 per cent for the current fiscal year which is expected to rise to 5.8 per cent in 2020?
 The IMF attributed the slash in growth rate to the slowdown in demand in the domestic
market and stress in the nonbank financial sector.
 “India’s growth is estimated at 4.8 percent in 2019, projected to improve to 5.8 percent in
2020 and 6.5 percent in 2021,” said IMF in a statement.
 The 5.8 per cent estimate in 2020 is down by 0.9 per cent from the previous estimate.
 The steep cut in India’s growth rate has affected the IMF’s projection on the world
economy, which is now expected to expand 2.9 per cent in 2019 as compared with the
 previous forecast at 3.0 per cent.
 In its World Economic Outlook Report, IMF stated that the growth markdown largely
reflects a downward revision to India’s projection, where domestic demand has slowed
more sharply than expected amid stress in nonbank financial sector and a decline in credit
growth.
 According to IMF, the global economy is expected to accelerate to 3.3 per cent in 2020
from 2.9 per cent in 2019. Further, it is expected to rise to 3.4 per cent in 2021.
 However, the IMF has in its latest estimates trimmed the global growth rate by 0.1 per
cent each for 2019 and 2020 and by 0.2 percentage for 2021.
 Earlier in December, IMF chief economist Gita Gopinath had estimated a likely cutdown
in India’s growth estimate during the January review.
 United Nations had also cut down India’s growth estimate for Financial Year 2020 to 5
per cent from 5.7 per cent. World Bank had also cut its estimate to 5 per cent from its
earlier prediction of 6 per cent

NBFC crisis: -
The continuing liquidity crunch facing non- banking financial companies is likely to result in
creasing bad loans risks for banks both from these shadow banks as well as from companies
relying on such lenders for funding, warns a report.
The spillover of stress among NBFCs to borrowers, and ultimately to banks, will hinder
improvements in banks' asset quality, profitability and capital, which is credit negative.
Owing to liquidity crisis, NBFCs are forced to reduce lending, leading to funding constraints
for borrowers relying on non-bank lenders.

This increases the risk of loan losses for NBFCs, and as a result, they will continue to have
difficulty in obtaining funding.

 Also, as NBFC customers' financials weaken, banks will reduce lending to them, which in
turn will further worsen their funding stress and can lead to more bad loans from these
companies for banks, it warned.
 A type of NBFC credit to controlling shareholders, or promoters, of large listed companies
 across various industries is also emerging as a source of asset risk for banks.
 Corporate promoters use their company shares as collateral to borrow, mostly from
NBFCs or mutual funds, typically for the purpose of making investments, including in
external businesses
 "The risk for banks is that promoters with weak governance can use company resources to
repay their debt, causing financial damage to their businesses, which as a consequence,
can default on their own loans from banks, the report said.
 Refinancing can be difficult for promoters of companies as investments they make using
 Loans are often illiquid, a problem made worse by tighter availability of credit from
NBFCs.
 The report further said the non-bank lenders collectively have a large market share in retail
and SME loans, a segment that has grown rapidly in recent years and now is susceptible to
asset quality deterioration as the economy slows.
 "A curtailing of lending by NBFCs will add to risks from retail loans for banks by
reducing the availability of credit that individuals can use for refinancing and by
contributing to the slowdown," the agency said.
 The report also said real estate companies are under significant stress, and tighter funding
will further increase stress in the sector. It could lead to more NPLs for banks because
they have large exposures to NBFCs active in real estate lending.
 Banks also have direct exposures to real estate companies, and the growing stress in the
NBFC sector will result in more impairment of bank loans to these borrowers.

SWOT Analysis of NBFCs

Strengths: -
 High on service aspect
 Strong last-mile approach
 Focus on recovery
 Easy and fast appraisal and disbursements
 Regional linkages
 Able to generate higher yield on assets
 Attained critical mass in terms of size
 Own employees versus DSAs
Weaknesses: -
 Weak in urban markets
 Weak credit history of most NBFCs
 Largely restricted to the regional markets (say South India)
 Weaker risk management and technology systems
 Too much of diversification from core business
 Higher regulatory restrictions

Opportunities: -
 Augmentation of capital and leveraging for growth
 Large untapped market, both rural and urban and also geographically
 Demographic changes and under-penetration
 New opportunities in credit card, personal finance, home equity and distribution of mutual
fund schemes
 Tie-up with global financial sector giants
 Blurring gap between banks in terms of costs of funds
 Securitization, to liberate funds to fuel asset growth

Threats: -
 Weak financial health of many of the NBFCs
 High cost of funds
 Asset quality deterioration may not only wipe out profits but also net worth
 Entry of foreign players in post-2009 scenario
 Growing retail thrust within banks

CRISIL NBFC REPORT: -

"However, increases in banks' real estate NPLs will be marginal as their direct exposures to
real estate companies remain small, growing more slowly than NBFC loans to the sector," it
said After witnessing healthy growth over the past few years, non-bank credit growth slowed
down in the second half of fiscal 2019 due to the tight liquidity conditions that engulfed the
sector. Consequently, Non-Bank Financial Companies (NBFCs) which were gaining market
share from banks across major asset classes in the past could not do so in fiscal 2019.
Going forward, NBFCs will need to recalibrate their strategies in order to deal with the
changing business dynamics. How would this impact the credit growth of the sector? When is
the liquidity situation going to improve? Can NBFCs achieve pre-2018 growth in the medium
term or will the growth remain anemic?
What are the key factors that will drive their growth? Will their earnings growth trajectory be
lower? What will be the capital that they will need over the next 1-2 years? What will separate
the winners from the losers? Where are the opportunities for growth?
CRISIL Research's NBFC Report, 2019 delves deep into the fast-changing industry landscape
to come up with the answers. The report contains CRISIL Research's perspective on growth
prospects, competitive scenario and the attractiveness of the 11 segments in which NBFCs
operate and also gives a perspective on the emerging fintech market.
The coverage also includes:
 Outlook on growth and delinquencies, credit costs by segment
 Segment-wise profitability outlook, considering business growth, resource profile and
asset quality
 Detailed assessment of competitive scenario with banks and market share of NBFCs in
various segments
 Perspective on regulatory direction in each segment
 Financial and operational benchmarks across various segments
 Profiles of over 200+ NBFCs, detailing key operational and financial parameters
 Details of fund-raising in various NBFC segments
 Level of digital medium usage in origination and appraisal process.

Growth in NBFC: -
The challenges faced by non-banks in access to funding following the credit cliff event in
September 2018 and recent defaults by some large non-banks has only increased the risk
aversion of lenders and investors.
A clear differentiation is visible between groups of non-banks. At an overall level, players
with a strong parentage are still getting funds, while those without any parentage continue to
face challenges.
Bifurcating this further, wholesale NBFCs without strong parentage are the worst hit. Home
loan-and retail- focused non-banks are relatively better off.With all of this, growth in the
second half of fiscal 2019 was around half of what was seen in the first half. But given the
strong growth in the first half, growth in overall non-bank credit in fiscal 2019 was still at
~15%, with assetsunder management reaching Rs 23.7 lakh crore.Growth is expected to be
remain subdued at least in the first half of fiscal 2020, with overall assets under management
growth for the year estimated at 12-13%. With securitization expected to sustain as a preferred
funding mode, the on-balance growth of non-banks is expected to be lower.
BAJAJ GROUP: -
Bajaj Group is an Indian conglomerate founded by Jamnalal Bajaj in 1926, Mumbai. Bajaj
Group is one of the oldest & largest conglomerates based in Mumbai, Maharashtra. The group
comprises 34 companies & its flagship company Bajaj Auto is ranked as the world's fourth
largest two- and three-wheeler manufacturer. some of the notable companies are Bajaj
Electricals, Mukand Ltd & Bajaj Hindustan Ltd. Involvement in various industries that
include automobiles (2- and 3-wheelers), home appliances, lighting, iron and steel, insurance,
travel and finance. The Group is headed by Rahul Bajaj

BAJAJ GROUP OF COMPANIES: -

 Bachhraj & Company Pvt. Ltd.
 Bachhraj Factories Pvt. Ltd.
 Bajaj Allianz General Insurance Company Ltd.
 Bajaj Allianz Life Insurance Company Ltd.
 Bajaj Auto Finance Ltd.
 Bajaj Auto Holdings Ltd.
 Bajaj Auto Ltd.
 Bajaj Electricals Ltd.
 Bajaj Finserv Ltd.
 Bajaj Holdings & Investment Ltd.
 Bajaj International Pvt. Ltd.
 Bajaj Sevashram Pvt. Ltd.
 Bajaj Ventures Ltd.
 Baroda Industries Pvt. Ltd.
 Hercules Hoists Ltd.
 Hind Lamps Ltd.
 Hind Musafir Agency Ltd.
 Jamnalal Sons Pvt. Ltd.
 Jeevan Ltd.
 Maharashtra Scooters Ltd.
 Mukand Engineers Ltd.
 Mukand Global Finance Ltd.

GROUP STRUCTURE: -
BAJAJ FINSERV LIMITED: -
Bajaj Finance Limited, a subsidiary of Bajaj Finserv, is an Indian Non-Banking Financial
Company (NBFC). The company deals in Consumer Finance, SME (Small and Medium-sized
Enterprises) Commercial Lending, and Wealth Management. Originally incorporated as Bajaj
Auto Finance Limited on March 25, 1987, the non-bank singularly focused on providing two
and three-wheeler finance. After 11 years in the auto finance market, Bajaj Auto Finance Ltd
launched its initial public issue of equity share and was listed on the BSE and NSE. At the
turn of the 20th century, the company ventured into the durables finance sector. In the
subsequent years, Bajaj Auto Finance diversified into business and property loans as
wellhttps://en.wikipedia.org/wiki/Bajaj_Finance - cite_note-3. In the year 2006, the
company’s assets under management hit the Rs.1,000 crore mark and is currently at Rs.52,332
crore. 2010 saw the company’s registered name change from Bajaj Auto Finance Limited to
Bajaj Finance Limited.
 Bajaj Finserv was formed in April 2007 as a result of its demerger from Bajaj Auto
Limited as a separate entity to focus purely on the financial services business of the group.
The process of demerger was completed in Feb 2008.
 This demerger was not only to unlock the value in the high growth business areas of Auto,
Insurance, Finance sectors and Wind Power but to also to independently run these core
businesses and strengthen their competencies.
 The wind power project, the stakes in the life and general insurance companies and
consumer finance along with their respective assets and liabilities got vested in Bajaj
Finserv Limited. In addition to that, cash and cash equivalent of INR 8,000 million (then
market value) was also transferred to the company.
 The demerger has enabled investors to hold separate focused stocks and also facilitated
transparent benchmarking of the companies to their peers in their respective industries.
 The constantly changing demographics and dynamics of the Indian economy, has led to
creation of various needs of the customer.
 The Indian customer now demands proper avenues of channelizing their savings, financial
 protection and is also desirous of spending more on valuable goods and services.
 All these wants need to be met by dynamic players in the financial services space. Bajaj
Finserv was formed specifically to cater to these needs.
 The company was also formed to touch and improve the lives of a growing number of
people in the country, and in doing so, deliver superior corporate values to its
shareholders.
 He operating companies carry with them the Bajaj brand, which carries with it decades of
commitment to business ethics, integrity and highest standards of fiduciary responsibility.

VISION AND MISSION OF THE ORGANIZATION: -

VISION:
Bajaj Finserv has a vision to become a full-fledged financial services company and be the
financial partner to the Indian consumer and help him across his financial needs, whether for
finance, for investment management, for protection or for post-retirement support, throughout
his lifecycle.

MISSION:
Bajaj Finserv aims to be the most useful, reliable and efficient provider of Financial Services.
It is our continuous endeavor to be a trustworthy advisor to our clients, helping them achieve
their financial goals.

AREA OF OPERATION:
 Consumer Durable Finance
 Two and Three-Wheeler Finance
 Lifestyle product finance
 Vendor finance
 Construction Equipment Finance

OBJECTIVE OF THE ORGANIZATION:

Our main objects as contained in our Memorandum of Association include:
To Finance industrial by way advance ,deposit or lend money, securities and propertied or
with any Company, Body corporate, trust, firm, person or association whether falling under
the same management or otherwise, with or without security and on such terms as may be
determined from time to time, and to carry on and undertake the business of finance and
investment and to provide venture capital, seed capital, loan capital and to participate in equity
preference share capital or to give guarantees on behalf of the company in the matter and to
promote companies engaged in industrial and trading business and to act as Financial
Consultants, Management Consultants, Brokers, Dealers, Agents and to carry on the business
of share broking, money broking ,exchange broking, bill broking and general brokers for
shares ,debentures, debenture-stock, bonds, units, obligations, securities ,commodities, bullion
currencies and to manage the funds of any person, firm, body corporate or trust by investment
in various avenues like Growth Fund, income fund, risk fund, tax exempt funds, pension
/superannuation funds and to pass on the benefits of portfolio investments to the investor as
dividends, bonus, interest, etc.
To carry on the business as an investment company and to underwrite, sub-underwrite, to
investigating, and acquire by gift or otherwise and hold, sell, buy or otherwise deal in shares
debentures, debentures-stocks, bond, units, obligations and securities issued or guaranteed by
Indian or Foreign Governments, States, Dominions, Sovereigns, Municipalities.
DIFFERENT DEPARTMENTS
 ORGANIZATION STRUCTURE
Management:

Name Designation

Rahul Bajaj Chairman

Ranjan Sanghi Director

Rajiv Bajaj Director

Rajendra Lakhotia Director

D J Balaji Rao Director

 Omkar Goswami Director

Madhur Bajaj Director

Dipak Poddar Director

D S Mehta Director

Gita Piramal Director

Rajeev Jain Managing Director

PRODUCT PROFILE OF THE ORGANIZATION:

Bajaj Finserv Lending offers loans for various needs. We offer loans for Bajaj Auto Two
Wheelers under the name of Bajaj Auto Finance Ltd. We offer Consumer Durable Loans,
Personal Loans, Loan against Property, Small Business Loans, Construction Equipment
Loans, Loan against Securities and Insurance Services under the name of Bajaj Finserv
Lending. Bajaj Finserv Lending is one of the most diversified NBFCs in the market catering
to more than 5 million customers across the country. Apart from being a well-recognized
organization, they pride us for holding the highest credit rating of FAAA/Stable for any
NBFC in the country today. The product offerings include Consumer Durable Loans, Personal
Loans, Loan against Property, Small Business Loans, Two-wheeler and Three – Wheeler
Loans, Construction Equipment Loans, Loans against Securities and Insurance Services.
 Home
Loan

Construction Consumer
Equipment Durable
Loan Loan
Product

Portfoli
o
Three/
Two
Wheeler
Mortgage
Loan
Loan

Personal and
Small
Business

COMPETITORS FOR BAJAJ FINSERV: -

 IDFC FIRST BANK

 SHRIRAM CITY
 MAHINDRA FINANCE
 HDFC BANK
 DEAL 4 LOANS
 BANK BAZAAR
 MUTHOOT FINANCE
 EDELWISS
 RELIANCE CAPITAL

CONSUMER FINANCE

 Durable Finance
 Lifestyle Finance
 Digital Product Finance
 EMI Card
 2 & 3-Wheeler Finance
 Personal Loan
 Loan against FD
 Extended warranty
 Gold Loan
 Home Loan
 Retail EMI
 Retailer Finance
 E-commerce
 Co-branded Credit Card
 Co-branded Wallet

Today, we are the top consumer electronics, digital products, lifestyle products and personal
loans lenders in India.
 SME Finance
 Home Loan
 Loan against Property
 Gold Loan
 Lease rental discounting
 Business Loan
 Loan Against Shares
 Professional Loan
 Working Capital Loans
 Developer Finance
 Used Car Finance
Present in the top 40 cities in India, our SME business is growing at the rate
comfortably higher than the industry.
COMMERCIAL LENDING
 Vendor Financing
 Large Value Lease Rental Discounting
 Loans against Securities
 Financial Institutions Lending
 Light Engineering Finance
 Corporate Finance
 Warehouse Financing

INVESTMENT
 Fixed Deposit
 Mutual Funds

PERSONAL LOAN INTEREST RATES & CHARGES

Bajaj Finserv offers attractive interest rates on personal loans up to Rs.25 lakh that can help
you meet a range of financial requirements. Get collateral-free loans, with minimum
documentation, flexible tenor and disbursal within 24 hours of approval.
With Bajaj Finserv Personal Loan, you do not have to worry about any hidden fees or charges.
Here are more details on the personal loan interest rates and charges:

Rate of Interest on Personal Loans in India

Types of Fees Charges Applicable

Personal Loan Interest Rates 12.99% onwards

Processing fees Up to 4.13% of the loan amount (Inclusive of taxes)

Bounce Charges Rs. 600 - 1200 Per bounce (Inclusive of applicable taxes)

Penal interest 2% of EMI amount per month + applicable taxes or Rs.

200 per month (Inclusive of taxes), whichever is higher.

DOCUMENT/ STATEMENT Download your e-statements/ letters/ certificates at no

CHARGES extra cost by logging into Customer Portal – Experia.
You can get a physical copy of your statements/ letters/
Statement of Account/ Repayment certificates/ List of Documents from any of our branches at
Schedule/ Foreclosure Letter/ No a charge of Rs. 50/- (Inclusive of taxes) per statement/
Dues Certificate/ Interest letter/ certificate.
Certificate/ List of documents.

If you are a salaried professional aged between 25 and 58 years living in India, you can easily
qualify for a loan. As long as you match the personal loan eligibility criteria and minimum net
salary specified based on your city of residence, you can avail a loan with ease and best
personal loan interest rates.
Below is table for other fees and charges:
Personal Loan Foreclosure Charges

Loan Variant Charges

Term Loan 4% plus applicable taxes on Principal Outstanding amount as on the
date of such full pre-payment
Flexi Term Loan 4% plus applicable taxes on total withdrawable amount* (*Total
loan amount that you can withdraw under Flexi Loan from time to
time as per the repayment schedule) on the date of levy of such
charges).

Flexi Hybrid Loan 4% plus applicable taxes on total withdrawable amount* (*Total
loan amount that you can withdraw under Flexi Loan from time to
time as per the repayment schedule) on the date of levy of such
charges).

Personal Loan Part-prepayment Charges

Borrower Type Time Period Part-Prepayment Charges

All borrowers More than 1 month from date of 2% + applicable taxes on part-
loan disbursal payment amount paid*

*Part-prepayment made should be more than 1 EMI.

*These charges not applicable for Flexi Loan facility.
Annual/Additional Maintenance Charges

Loan Variant Charges

Flexi Term Loan 0.25% plus applicable taxes, on the total with drawable amount
irrespective of utilization on date of levy of such charges

Flexi Hybrid Loan 0.25% plus applicable taxes, on the total with drawable amount
irrespective of utilization on date of levy of such charges
*These charges will be levied annually.
Education Loan: - 10.45% per Anum

Gold Loan: -
Fees & Charges
Types of Fees Applicable Charges

Interest rate 12% p.a. onwards

Processing fee Rs.25 to 50 Inclusive of taxes

Part payment NIL

Foreclosure NIL

Penal interest 3 % (inclusive of taxes)

Types of Fees Applicable Charges

DOCUMENT/STATEMENT CHARGES Download your

e-statements/letters/certificates at no
extra cost by logging into Customer
Statement of Account/ Repayment Portal – Experia.
Schedule/Foreclosure Letter/No Dues You can get a physical copy of your
Certificate/Interest Certificate/List of documents statements/letters/certificates/List of
Documents from any of our branches at a
charge of Rs. 50/- (Inclusive of taxes)
per statement/letter/certificate.
Business Loan Fees & Interest Rates

Bajaj Finserv offers the lowest rate of interest on Business Loan. Read more about our latest
interest rate and fees and charges below.

Business Loan Interest Rate in India

Types of Fees Applicable Charges

Rate of interest 18% p.a. onwards

Processing fees Up to 2% of the loan amount (Inclusive of taxes)

Business Loan Interest Rate in India

Types of Fees Applicable Charges

DOCUMENT/STATEMENT Download your e-statements/letters/certificates at no extra
CHARGES cost by logging into Customer Portal – Experia.
You can get a physical copy of your
Statement of Account/ Repayment statements/letters/certificates/List of Documents from any
Schedule/Foreclosure Letter/No of our branches at a charge of Rs. 50/- (Inclusive of taxes)
Dues Certificate/Interest per statement/letter/certificate.
Certificate/List of documents

Bounce charges Up to Rs. 3000 (Inclusive of applicable taxes)

Penal interest (Applicable in case 2% per month

of non-payment of monthly
Instalment on/before the Due -
Date)

Document processing charges Rs. 1449 + applicable taxes

REWARDS AND RECOGNITIONS

 CHAPTER – IV
DATA ANALYSIS & INTERPRETATION
TABLE 1. SHOWING CONSUMER ENDING FOR THE PERIOD 2016-18 TO 2018-20

% Of Total
Year Total Loans Consumer lending Amt

2014-2015 32,410 13,202 40.73

2015-2016 44,229 18,996 42.95

2016-2017 60,196 27,159 45.12

2017-2018 82,422 30,944 37.54

2019-2020 1,15, 88 44,989 38.82

% Of Total Amt
40
20
C o n s u m e r le n d in g

0
1 8 ,9 9 6

4 4 ,9 8 9
1 3 ,2 0 2

2 7 ,1 5 9

3 0 ,9 4 4

Total 32,410 44,229 60,196 82,422 1,1

Loans 5,
88
Year 2014- 2015- 2016- 2017- 201
2015 2016 2017 2018 8-
201
9

ANALYSIS AND INTERPRETATION: -

The above table and Chart show the consumer position year by year. It was 40.73% of total
loans lend by Bajaj Finserv. But it increased to 42.95% in 2015-16 and 45.12% in 2016-17.
But it decreased in 2019-20 to 37.54% and again it was increased to 38.82%.
TABLE 2. SHOWING SME LENDING FOR THE PERIOD 2016-18 TO 2019-20

% Of Total
Year Total Loans SME Lending Amt

2014-2015 32,410 15,550 47.98

2015-2016 44,229 18,692 42.26

2016-2017 60,196 22,082 36.68

2017-2018 82,422 11,434 13.87

2019-2020 1,15,888 15,759 13.60

% Of Total Amt
Year Total Loans SME Lending
Year Total Loans
9% 2014-2015 32,410 15,550
9% 31% 2014-2015 32,410
2015-2016 44,229 18,692
2015-2016 44,229
2016-2017 60,196 22,082
24%
2016-2017 60,196
2017-2018 82,422 11,434
27% 2017-2018 82,422
2019-2020 1,15,888 15,759

ANALYSIS AND INTERPRETATION: -The above table and below Chart show the SME
position year by year. It was 47.98% of total loans lend by Bajaj Finserv. But it decreased to
42.26% in 2015-16 and 36.68% in 2016-17 again decreased in 2017-18 to 13.87%
TABLE 3. SHOWING RURAL LENDING

% Of Total Amt
Year Total Loans Rural Lending

2014-2015 32,410 333 1.03

2015-2016 44,229 1,339 3.03

2016-2017 60,196 3,072 5.10

2017-2018 82,422 5,458 6.62

2018-2019 1,1 ,888 9,243 7.98

Chart Title
2016-2017 2018-2019
1,1 ,888

9,243 7.98

5,458 6.62
60,196

3,072 5.1

1,339 3.03
2014-2015
32,410

333 1.03

Rural Lending

% Of Total Amt

ANALYSIS AND INTERPRETATION: -

The above table and below Chart show the SME Rural lending year by year. It was 7.98% of

rural lending’s by Bajaj Finserv for the year 2019-2

TABLE 4. COMMERCIAL LENDING

% Of
Year Total Loans Commercial Lending Total
Amt

2014-2015 32,410 3,325 10.26

2015-2016 44,229 5,202 11.76

2016-2017 60,196 7,883 13.10

2017-2018 82,422 34,586 41.96

2018-2019 1,15,888 45,897 39.60

Chart Title
40
41.96 39.6
30
20
10 13.1
10.26 11.76
0
7,883

34,586
3,325

5,202

45,897
Commercial Lending

Total Loans 32,410 44,229 60,196 82,422 1,15,88

8
Year 2014-2015 2015-2016 2016-2017 2017-2018 2018-
2019
% Of Total Amt

ANALYSIS AND INTERPRETATION: -

The above table and below Chart show the Commercial Lending position year by year. It was
10.26% of total loans lend by Bajaj Finserv. But it increased to 11.76% in 2015-16 and 13.10%
in 2016-17 in 2017-18 to 41.96% and was reduced to 39.60%.
SCHEME CHART FOR LOAN APPROVAL

Schemes Description

12/4 It means the 4months payment will be taken as an advance and

remaining payment will be distributed in 8 months.
10/2 It means the 2 months payment will be taken as an advance and
remaining payment will be distributed in 8 months.
18/6 It means the 6 months payment will be taken as an advance and
remaining payment will be distributed in 12 months. And it is long
term scheme.
24/6 It means the 6 months payment will be taken as an advance and
remaining payment will be distributed in 18 months. And it also long
term scheme.
10/0 It means there is no any advance payment will be taken, all payment
will be distributed in 10 months.
 CHAPTER – V
FINDINGS, SUGGESTIONS
&
CONCLUSIONS
FINDINGS

 While paying through credit card, that much amount is blocked from the card. As there is
monthly limit in each card, so it is wise to go for Bajaj Finserv Lending.
 Bajaj Finserv Lending provided loan on consumer durable product to the customer as per
the surrogates.
 Flexible EMI scheme in many products is available. Bajaj Finserv Lending provides many
schemes such as 12/4, 10/2, 18/6, 24/6 etc. Customer can choose any EMI Scheme option
according to their paying capability.
 As per the requirement of finance company for address proof would be required current
place proof, and for ID proof required the valid name of person it shows with the help of
case studies.
 48% of people know about No cost EMI through Friends.
 The 13 people out of 42 are interested to take new loans who are not taken loans before.
 The most of the people are feel the charge of loans in Bajaj Finserv is medium, the 3 people
feel that it is high and the 5 people low
 Based on the 2 policies the Bajaj Finserv will issue loans to the customers based on their
financial capability.
 Only 90% loan only issued by the Bajaj Finserv to the customers, the remaining 10%
should bear by the customer.
 If the CIBIL score is low the Bajaj Finance will not issue loan.
 The address proof and the financial strength proof (credit card, bank statement, job proof,
and the previous loan records, CIBIL Score card) is mandatory for every loan issued by the
company,
 The overall rating is good on the Bajaj Finserv loans, procedures and the service provided.
SUGGESTIONS

 The Bajaj Finserv has to increase the advertisements on the NO COST EMI policy
 The SME lending is decreased year by year the company has to look into the SME loans.
 The processing time taking is more when compared to the competitors so the Bajaj Finance
Limited has to use technology to improve their loan approval systems.
 The commercial lending is increase suddenly it is good the recovery is little bit risky.
 The no of documents required for the loan approval is more, it has to minimized.
 The Company is taking long time to approve the loan, so my suggestion is to use the
technology for the quick loan approvals.
 The online system of loan approval and the online and the receiving the applications should
increase.
 The Bajaj Finserv is not mostly concentrating on the digital media for the advertisements, I
strongly recommend to use the digital media for the advertisements.
 The company has to increase the issue of credit cards.
 I suggest the Bajaj Finance to issuing more Educations loans and the gold loans, in these 2
types of loans the company is too back.
CONCLUSION

 According to the objectives through the study as we know the population is been
increasing day by day the more and more people will not have employment opportunity
due to this, the interested people will come for the loans to start their own business, but
the people who are in middle class people they have the basic needs due to less income
the middle-class people will come to take loans to fulfill their needs, the needs in the
sense like house construction and for vehicle.
 The company also provides the loans for the staff who are working in the bank for less
rate of interest. The loans like, festival advance, staff vehicle loans, staff house building
etc.….

If a customer wants the loan the company representatives will help the customers to have huge
amount for less rate of interest. If the customer’s performance / transaction is good in the
company the company will provide advances, over draft etc.
 BIBLIOGRAPHY

 Guide to Security & Documentation of Loans & Advances Paperback – 1 January 2017

 Documentation for Loans and Advances by S K Bagchi

 A study on loans and advances by vinayak-kulkarni

WEBSITES

https://www.bajajfinserv.in
www.google.com
https://www.bajajfinservmarkets.in
www.scribd.com