Professional Documents
Culture Documents
Blackbook by Neha Parmar
Blackbook by Neha Parmar
INDEX
Introduction
Bajaj Finserv
Bajaj Finserv was formed in April 2007 as a result of its demerger from Bajaj Auto Limited to
further the Group's interests in financial services. This demerger enabled Bajaj Finserv to
independently run the core businesses of Lending, Protection and savings. Bajaj Finserv Limited
is the holding company for the businesses dealing with financial services of the Bajaj Group. It
serves millions of customers in the financial services space by providing solutions for asset
acquisition through financing, asset protection through general insurance, family protection and
income protection in the form of life and health insurance and retirement and savings solutions
Who is a consumer?
An individual who buys products or services for personal use and not for manufacture or
resale. A consumer is someone who can make the decision whether or not to purchase an
item at the store, and someone who can be influenced by marketing and advertisements. Any
time someone goes to a store and purchases a toy, shirt, beverage, or anything else, they are
making that decision as a consumer.
A consumer can be defined as a person who purchases goods or service for self-
consumption. He causes disappearance of the goods or services produced by the marketer by
consuming them. If anyone purchases goods or services for reselling the goods or services at
a profit he cannot be called as a consumer.
Meaning of finance.
Finance is defined as the management of money and includes activities like investing
borrowing, lending, saving, and forecasting. There is many different career path and jobs that
performs a wide range of finance activities. The word finance was originally a French word.
IN the 18th century English-speaking communities to mean the management of money adopted it.
Today finance is not merely a word it has emerged into an academic discipline of greater
significance. Finance is nothing but an exchange of available resources. Finance is the soul of
our economic activities. To perform any economic activity we need certain resources, which
are to be pooled in terms of money.
Finance is a field that the allocation of assets and liabilities over space and time, often under
conditions of risk or uncertainty. Finance can also be defined as the art of money
management. Participants in the market aim to price assets based on their risk level,
fundamental value, and their expected rate of return. Finance can be split into three sub-
categories: public finance, corporate finance and personal finance.
Public finance is the study of the role of the government in the economy. It is the branch of
economics, which assesses the government revenue and government expenditure of the
public authorities and the adjustment of one or the other to achieve desirable effects and
avoid undesirable ones.
Corporate finance is an area of finance that deals with sources of funding, the capital structure
of corporations, the actions that managers take to increase the value of the firm to the
shareholders, and the tools and analysis used to allocate financial resources. The primary goal
of corporate finance is to maximize or increase shareholder value.
Personal finance is the process of effectively managing assets in the possession of an
individual or a family. The approach dictates that attention is given to the generation of
income for the household, allotting specific amounts of that income to cover all expenses
associated with the household, and take action to create reserves of cash and other assets for
on-going financial security. A wide variety of resources can be called upon to aid in the
process of personal finance.
Consumer finance
The term consumer finance refers to all activities concerned with consumer credit which will
enable the consumer to have possession of the goods without necessarily have paid the full
value of goods. It is called credit buying, hire purchase, pay out of income scheme etc.
The division of retail banking that deals with lending money to consumers. This includes a
wide variety of loans, including credit cards, mortgage loans, and auto loans, and can also be
used to refer to loans taken out at either the prime rate or the subprime rate.
Many people see the field of consumer finance as a murky swamp filled with different rules
and regulations, but if looked at carefully the information on things such as loans, credit and
borrowing can be easily and simply understood.
According to Reavis Cox, consumer credit is Business procedure through which consumer
purchase semi durables, durables other than real estate in order to obtain from them a series
of payments extending over a period of three months to five years and obtain possession of
them when only a fraction of the total price has been paid.
According to E.R.A Seligman, The term consumer credit refers to a transfer of wealth, the
payment of which deferred in whole or part, to future, and is liquidated piecemeal or in
successive fractions under a plan agreed upon at the time of the transfer.
It depends on what you mean by "consumer finance" and in which country you live.
One broad definition of consumer finance is this: the financing of goods and services for
consumer.
This definition brings a lot of product into play:
- Uncollateralized personal loan, such as Credit Card or Cash personal loans
- Payday loans
- Ownership loans are a type of loan where a Financial Service company finance the purchase
of an item: car financing, property financing. You don't own a car, you want to own it, and
the banks help you.
- Refinancing loans is a loan type where a Financial Service company provide cash with an
item being pledge as collateral: car refinancing, property refinancing. You already own a car,
you want cash and you're willing to put the car as collateral.
- Looking at the above product, most banks certainly fit the bill as "consumer finance"
company. Other example of consumer finance company would be specialist lenders. They are
what often cited as "consumer finance" company in the narrower term.
- The difference between banks and these specialist lenders are the source of funding, which is
the money the bank or specialist lenders provide to people who borrow money.
- Bank gets their funding from depositors, individuals or companies that expect nothing funny
will happen to their money.
- Specialist lenders get their funding from their shareholders, banks, or the capital markets.
Specialist lenders are often prevented from taking money from depositors. In some country,
that privilege is only given to banks.
This restriction exists because many depositors are deemed less financially savvy than
investors and thus have to be protected; mainly by putting safeguards into banks and how
banks handle deposits. It doesn't mean individual can't put money in specialist lenders. They
can do it by buying share or bonds from the specialist lenders, but it comes with higher risk
for the individual investor. Some asset types (e.g. car) have large value that most customers
can't afford to pay in one single payment, and thus is natural object of financing. Thus for car,
it's typical for automotive companies to also own specialist lenders to finance the purchase of
their car.
So, consumer finance companies are those that help consumer finance a purchase or receive
loans for various purposes. Example of such companies is banks and specialist lenders.
Consumer finance has become very popular in India especially for the sale of consumer
durables such as television sets, refrigerators, motor vehicles etc. It is an ideal sales
promotion device, which gives consumers the benefit of enjoying a certain product even
before the full value has been paid.
Bajaj Finance comes under the umbrella of Bajaj Finserv. Formerly known as Bajaj Auto
Finance it was the investment arm of Bajaj Finserv, one of the biggest players in the NBFC
segment in India.
Bajaj Finserv holds a 52.49% stake in Bajaj Finance and a 74% stake in both Bajaj Allianz life
Insurance and Bajaj Allianz General Insurance. Let’s have a look at their organizational
structure
From the above pie chart, we can analyze the Consumer lending segment has contributed over
45.9% of most of the revenue.
Personal Finance
Personal finance or the consumer lending segment deals with credit to consumers for personal
and or household uses. Bajaj Finance offers consumer durable loans, lifestyle finance home
loans, credit cards, two-wheeler and three-wheeler loans, construction equipment loans, etc.
SME lending
Bajaj Finance promotes small and medium scales businesses with SME lending with no
collateral and easy basic requirement at low-interest rates. This segment contributes about
17.4% of overall revenue.
Rural lending
Bajaj Finance also covers the far-fetched rural region and provides a line of credit specifically
for the farmers in the agriculture sector. Bajaj Finance’s newly launched Kisan credit card
scheme provides loans and mortgage assistance for land development and farm equipment at
low interest and a hassle-free onboarding process. with attractive growth in rural areas this
segment is contributing 12.7%.
Commercial lending
India emerging as the startup capital of the world. More and more businesses today require loans
for the short term such as meeting operating costs, acquiring machinery, etc. Bajaj Finance
provides up to Rs.45 lakhs at a competitive interest rate which contributes 7.2 % in revenue.
Mortgages
Mortgages or secured loans are provided against the collateral. Bajaj Finance provides loans up
to 5 crores against the property. Very popular in urban areas and this component contributes
11.7% to the total revenue.
Just like in mortgages Bajaj finance is also involved in providing financial assistance against the
securities. This contributes 5.1% to total revenue.
Bajaj Finserv is a financial service arm of Bajaj holding and investment Ltd. Unlike Bajaj
Finance this focuses on the greater scale by offering services in asset management, wealth
management, and insurance purviews.
From the above chart, we can see that 26 % of the contribution is made by the life insurance
segment in the revenue.
Life Insurance
Bajaj Finserv has been in a joint venture with a German multinational Allianz SE since 2001.
Bajaj Allianz Insurance offers products in the life insurance domain relating to financial
planning and security.
General Insurance
With the joint venture with Allianz SE. Bajaj Finserv offers products in general insurance which
covers all other insurances except life insurance like motor, fire travel health, etc., and is known
as Bajaj Allianz general insurance. This segment contributes 29% of the revenue.
Retail Financing
Retail financing is a 44% contributor to the overall revenue that primarily offers credit facilities
to the customers. Getting its popularity from cities, it has become one of the biggest contributors
to the credit cycle in India.
Windmills
Bajaj Finserv owns and operates 138 Windmills with a capacity of 65.2 MW. Bajaj Finserv is
taking its steps towards a green and renewable future. It contributes around 0.04 % of revenue.
Other Investment
RBI has differentiated NBFCs based on different activities which they perform and whether
they accept deposit or not. RBI licenses all Different types of Non-Banking Financial
Companies. Various types of NBFC are Asset Finance Company, Investment Company,
Investment Company, and Infrastructure Finance Company, Housing Finance Company,
Micro Finance Company etc. Role of NBFC in recent times has become important according
to its size in the Indian economy.
finance company from their auditors confirming the asset pattern of the company of the latest
financial year. The famous infrastructure finance company is India Bulls Housing Finance.
5. Core Investment Company:
Core investment companies are the non-banking financial company doing the business of
acquisition of securities and shares, and they hold 90% of its asset in the form of bonds,
equity shares, and preference shares. These companies need to invest not less than 60 per cent
in the equity shares of group companies.
6. Micro Finance Company:
There are many microfinance companies in India, which play some crucial role in the
development of India. Microfinance companies are those financial institutions that offer
small-scale financial services in the form of credit and savings, to the poor in rural, semi-
urban areas. Micro financial services are meant to help them in economic activities,
increasing savings and supporting self-empowerment. Microfinance Company is a non-
deposit taking firm regulated by reserve bank of India act, 1934. These companies are entitled
to provide loans up to Rs.50, 000 to individual coming under low-income group living in rural
or semi-urban areas. A company to be registered NBFC‟s-MFC, they should have
minimum net capital of Rs.5 Crore after incorporation as a private limited company having
equity share capital.
7. Housing Finance Company:
Housing finance companies have mention housing finance as the main clause in its main
memorandum of association .NBFC‟s have complemented commercials bank in providing
mid-term capital loans to individual or firms; their flexibility and less strict regulation
provide them competing for an edge over commercial banks.
The Managing structure for NBFCs is based on the following three characteristics:
(a) The size of NBFC
(b) Type of activity
(c) The acceptance of public deposits.
Governance over NBFC‟s is done through on-site inspection based on Capital, Assets,
Management, Earnings, Liquidity, Systems and Procedures method. Off-site observation is
done through periodic control returns. To review this regulatory framework and supervision
of NBFCs, the Government of India appointed a committee, which has submitted its report in
October 1998. The recommendations made by the committee covering different aspects like
the upper limit on public deposits, investments in real estate and shares, registration, and
inspection of disclosure.
Both types of companies are dealing in providing financial services to general public. The
critical difference between NBFC and banks is that NBFC's cannot accept deposits whereas
banks have license and RBI approval to accept it. The primary function of a commercial bank
is to accept deposits and lending money; some Non-Banking financial companies can accept
a deposit if they attain a license and follow the guidelines established by RBI.
➢ NBFC‟s full form can be expanded to Non-Banking Financial Company. It is a
company, which is registered under Companies Act and attains a license from RBI to
carry on business, which is similar to banking services, but they are not governed by
regulation which is laid down for commercial banks.
➢ Commercial Banks are an establishment, which is authorized by the government to
accept the deposit, accept and clear withdrawals and provide other financial services
such as delivering savings account, Loans etc.
➢ An NBFC company is a company that provides services to people that is similar to
banking services without holding a license from RBI.
➢ Commercial banks are government authorized financial institutions, which are
incorporated after registering themselves as per government regulation. They provide
banking facility for the general public.
1. Incorporation:
An NBFC is incorporated under the Companies Act, 1956 and RBI Act.
A commercial bank is incorporated under the Banking Regulation Act, 1949 and RBI Act.
3. Foreign Investment:
It is allowed up to 100%
No checking facilities are provided to an NBFC‟s moreover there is no bar on an NBFC for
carrying out an activity other than financial activity.
5. Obtaining license:
It is more comfortable for the NBFC to attain registration as the regulations are less stringent
as compared to commercial banks.
It is considered to be quite difficult for a bank to attain license as the government tightly
controls norms.
Bajaj Finserv is a part of Bajaj Holdings & Investments Limited, is an Indian financial
services company focused on lending, asset management, wealth management and insurance.
The company employs over 20154 employees at 1409 locations, and is engaged in consumer
finance businesses, life insurance, and general insurance. Apart from financial services, BFS
is also active in wind–energy generation.
Bajaj Finance: The Company offers loans for Bajaj Auto Two Wheelers under the name of
Bajaj Auto Finance. The company offers 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 Allianz Life Insurance: It is a union between Allianz SE, one of the largest Insurance
Company and Bajaj Finserv. Allianz SE is a leading insurance conglomerate globally and one
of the largest asset managers in the world, managing assets worth over a Trillion. Allianz SE
has over 119 years of financial experience and is present in over 70 countries around the
world.
Bajaj Allianz General Insurance: It is a joint venture between Bajaj Finserv Limited
(recently demerged from Bajaj Auto Limited) and Allianz SE. Both enjoy a reputation of
expertise, stability and strength. At times we require funds to expand our business or increase
our working capital. This requirement can be met by availing the business loan from Bajaj
Finserv Financial Institution. The institution provides loan for the highest value of□30 lakhs.
The loan tenure lasts up to 48 months and repayment can be done through ECS. The loans are
available at the fixed rate of interest that is decided by the product dealer. The rate of interest
is fixed and remains the same throughout the loan tenure. However, the rates vary from
applicant to applicant depending on their nature of the business, annual turnover and financial
position.
Bajaj Finserv, India‟s most diversified non-banking finance company, it also have EMI offers
and deals on smartphones from brands such as LG, Samsung, Apple, Google, Motorola,
HTC, Huawei, and a whole lot more on easy EMIs.
Bajaj Finserv has made its mark as the one of the top-notch non-banking financial company
in India through a gamut of Loan & credit card services provider in India. The Gold Loans
and EMI card loan services are offered across 139 locations .Bajaj Finserv has adopted a
service delivery model which ensures is not only quick but hassle free as well . It is one of the
first companies to offer doorstep delivery services for the loan application.
The durable loan by Bajaj Finserv is reliable and hassle-free. Once the customer avails the
loan, they are also provided various other financial service and offers.
Non-Banking Financial Companies (NBFC) are establishments that provide financial services
and banking facilities without meeting the legal definition of a Bank. They are covered under
the Banking regulations laid down by the Reserve Bank of India and provide banking
services like loans, credit facilities, TFCs, retirement planning, investing and stocking in
money market. However they are restricted from taking any form of deposits from the
general public. These organizations play a crucial role in the economy, offering their services
in urban as well as rural areas, mostly granting loans allowing for growth of new ventures.
NBFCs also provide a wide range of monetary advices like chit-reserves and advances.
Hence it has become a very important part of our nation‟s Gross Domestic Product and
NBFCs alone count for 12.5% raise in Gross Domestic Product of our country. Most people
prefer NBFCs over banks as they find them safe, efficient and quick in assisting with
financial requirements. Moreover, there are various loan products available and there is
flexibility and transparency in their services. There are a huge number of NBFCs operating in
our country here are some top 10 Current NBFCs in India.
Power Finance Corporation Limited
Power Finance Corporation Limited was founded in 1986 and is a Navratna Status company.
Mukesh Kumar Gael is the Chairman & Managing Director of the company. Power Finance
Corporation Limited is known to provide financial assistance to different power projects in
the country. It supports organizations involved in Power generation, transmission and
distribution. The company is also listed in National Stock Exchange (NSE) and Bombay
Stock Exchange (BSE).
Shriram Transport Finance Company Limited
Shriram Transport Finance Company Limited focuses on funding commercial and business
vehicles, besides others. The company was founded in 1979 and has been offering funding
services for Light Duty Trucks, Heavy Duty Trucks, Mini Trucks, Passenger Vehicles,
Construction Vehicles and Farm Equipment. The company‟s specialisation is in general
insurance, mutual funds, common assets, stock broking and general protection.
financing company and has surged ahead as a complete financial services provider offering
all kinds of services like - vehicle finance, home loans, home equity loans, SME loans,
investment advisory services, stock broking and a host of other financial services to
customers. Chola has 725 branches across India with assets under management above INR
35,000 Corers.
Tata Capital Financial Services Ltd
Tata Capital Financial Services Limited is top of India‟s leading NBFCs. established in 2007;
it is a subsidiary of Tata Sons Limited. TCFS describes itself as a one-stop financial service
provider that caters to the diverse needs of retail, corporate and institutional customers across
businesses. It is registered with RBI as „Systemically Important Non-Deposit Accepting Non-
Banking Financial Company (NBFC)‟. Among the various products offered by TCFS to
individuals, families and businesses are commercial finance, infrastructure finance, wealth
management, consumer loans and distribution and marketing of Tata Cards.
L & T Finance Limited
L & T Finance Limited is a strong player in the non-banking financial sector and was
established in 1994. Headquartered in Mumbai, L & T offers funding services to different
sectors like trade, industry, agriculture, Commercial Vehicle loans, Individual Vehicle loans,
and corporate and rural loans. The company caters to more than 10 lakh people. In 2010, it
was awarded the “Company of the year” in the Economic Times awards.
Aditya Birla Finance Ltd.
Aditya Birla Finance Limited, a part of the Aditya Birla Financial Services, was incorporated
in 1991 and is an ISO 9001:2008 certified NBFC. ABFL is registered with RBI as a
„systematically important Non-deposit accepting NBFC‟ and it ranks among the top five
largest private diversified NBFCs in India. It offers precise and customised solutions across a
wide range from corporate finance to commercial mortgage and from capital markets to
structured finance.
Historical background
Bajaj Finserv Limited (BFS) is the holding company for the various financial services
businesses under the Bajaj Group. It serves millions of customers in the financial services
space by providing solutions for asset acquisition through financing asset protection through
general insurance family protection and income protection in the form of life and health
insurance and retirement and savings solutions. BFS holds 52.49% stake in Bajaj Finance
Limited (BFL) and 74% stake each in Bajaj Allianz General Insurance Company Limited
(BAGIC) and Bajaj Allianz Life Insurance Company Limited (BALIC). Apart from financial
services BFS is also active in wind energy generation and has investments in renewable energy
in the form of 138 windmills situated in Maharashtra with an aggregate installed capacity of
65.2 MW. Bajaj Finserv was formed in April 30 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 February 2008. 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 Rs 800 crore (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.On 20
April 2009 Bajaj Finserv and Allianz Global Investors AG (AllianzGI) the asset management
subsidiary of Allianz SE signed an agreement to set up as asset management Joint Venture
Company in India. AllianzGI and Bajaj Finserv will hold a 51% and 49% state respectively in
the equally managed proposed venture. On 10 November 2009 Bajaj Finserv announced that
the Reserve Bank of India has issued to the company a Certificate of Registration dated 30
October 2009 under section 45-IA of the RBI Act 1934 to carry on the business of a Non-
Banking Financial Institution (NBFC) (non-deposit taking).On 5 May 2010 Bajaj Finserv
announced that Bajaj Auto Finance (BAFL) has launched its Construction Equipment (CE)
financing and Retail Loan against Securities (LAS) business in the month of April 2010. 04
March 2011 Bajaj Finserv said in a clarification to the stock exchanges that the company does
not have any plan at present or in the foreseeable future to sell its equity to Berkshire
Hathaway group of companies.
Berkshire Hathaway will enter Indian insurance business as a corporate agent for Bajaj Allianz
General Insurance Company Ltd (BAGIC) a 74% subsidiary of Bajaj Finserv Ltd. The tie up
will help BAGIC expand its customer base. BAGIC has about 40 corporate agents. On 17
October 2012 Bajaj Finserv successfully allotted 1.44 crore equity shares to existing eligible
shareholders on a rights basis in the ratio of 1 equity share for every 10 equity shares held on
the record date. The rights issue was priced at Rs 650 per share. The company raised Rs 939
crore from the issue. The rights shares were listed on BSE and NSE on 22 October 2012. On
27 June 2013 Bajaj Finserv announced that it has submitted its application to Reserve Bank of
India on 26 June 2013 for a licence to commence banking business in terms of section 22 of
the Banking Companies Act 1949.
It is proposed to do this by converting its subsidiary Bajaj Finance Ltd into a bank in terms of
RBI Guidelines for Licensing of New Banks in the Private Sector dated 22 February 2013.On 1
November 2014 Bajaj Finserv transferred by way of sale of 100% shares of Bajaj Financial
Solutions Ltd. (together with its wholly-owned subsidiary Bajaj Financial Securities Ltd.) for a
consideration of Rs 17 crore on an arm's length basis to its subsidiary company Bajaj Finance
Ltd to facilitate Bajaj Finance Ltd promote the business of housing finance. The transaction
was approved by the Company's Board of Directors at its meeting held on 14 October 2014.
On 3 November 2015 Bajaj Finserv announced that the Reserve Bank of India has accorded its
approval for conversion of the company into a Core Investment Company not requiring
registration with RBI and has accordingly cancelled the Certificate of Registration as NBFC
earlier issued to the company.On 23 November 2016 Bajaj Finserv exercised its right to
convert 92.5 lakh warrants of Bajaj Finance Limited into equity shares upon payment of
balance 75% amount aggregating to Rs 306.08 crore.
Consequently the company's shareholding in Bajaj Finance increased from 57.28% to 58%.
The paid-up equity share capital as on 31 March 2017 was Rs 79.57 crore. During the Rights
Issue of equity shares made by the Company in 2012 certain shares had been kept in abeyance
as required by law. With resolution of a few cases during the year 2017 the Company has
allotted 327 equity shares of the face value of Rs 5 each at the original Rights Issue price of Rs
650 per share to the eligible shareholders. During the year BFL divided its equity shares of
face value of Rs 10 each to Rs 2 each and also issued one fully paid bonus equity share of the
face value of Rs 2 against one equity share of the face value of Rs 2. As on 31 March 2017
Bajaj Finserv held 74% of the equity capital in its joint ventures BAGIC and BALIC the
balance being held by Allianz.The paid-up equity share capital as on 31 March 2018 was
Rs.79.57 crore consisting of 159135097 fully paid-up equity shares of face value of Rs.5 each.
During the Rights Issue of equity shares made by the Company in 2012 certain shares had been
kept in abeyance as required by law.
With resolution of a few cases during the year under review the Company has allotted 3317
equity shares of the face value of Rs.5 each at the original Rights Issue price of Rs.650 per
share to the eligible shareholders.During the year 2017-18 Bajaj Financial Holdings Ltd. a
wholly-owned subsidiary has firmed up new business plans for undertaking activities on digital
and online platform to augment the business of Company's subsidiaries and consequently
changed the name to Bajaj Finserv Direct Ltd. with effect from 27 February 2018During
FY2020 Bajaj Finserve Direct Ltd (BFSD) subsidiary which was incorporated in FY2019
launched its digital platform 'FINSERVE MARKETS'.
During the fiscal 2020 BFS incorporated a wholly owned subsidiary in the name of Bajaj
Finserv Health Ltd. In FY 2020 Company started a broking business through its 100%
subsidiary Bajaj Financial Securities Ltd. (BFinsec).As on 31 March 2021 Company held 74%
of the equity capital in both BAGIC and BALIC with the balance being held by Allianz.During
FY2022 the Company along with Bajaj Finance Ltd. (BFL) a subsidiary company made a joint
investment in the form of equity shares and/or convertible loan or security into equity shares to
Bajaj Finserv Direct Ltd. (BFS-D). Consequent to infusion in equity capital by BFL BFS-D
ceased to be a wholly-owned subsidiary of the Company. As at 31 March 2022 BFS and BFL
respectively hold 80.10% and 19.90% of equity share capital in BFS-D.During FY2022 Bajaj
Finserv Ventures Ltd. (BFS-Ventures) Bajaj Finserv Asset Management Ltd. (BFS-AMC) and
Bajaj Finserv Mutual Fund Trustee Ltd. were incorporated as wholly owned subsidiaries of the
Company
credit card that is the customer can purchase consumer durables through the credit card
As soon as the transaction is made, the seller makes three copies of the sales voucher, one he
retain with himself, the second her sends to the credit card company /bank and the third is
given to the buyer. In this way during a particular period e.g. a month, the seller may have
many such vouchers for various purchasers for which payment is receivable which he will
forward to his bank .The sellers bank will in turn forward all these bills to the credit card
company .The buyer will receive a statement from the credit card company about his amount
receivables. The bank will pay the seller within a period of 45days, but if, payment is
delayed, the credit card company will also pay interest as a compensation for the delay.
4. NBFCS: These non-banking finance companies constitute small loan companies, personal
finance companies and licensed lenders. Their primary activities concern sales finance
receivables and personal credit loan to consumer. In India there are many non-banking
financing companies which are beneficial to the consumers.
5. Credit unions: It is an association of people who agree to save their money together .From
the collected funds; they provide loans to their member at relatively low rate of interest. They
are also known as cooperative credit societies. This is popular method in India as the credit is
directly given to customer.
6. Middlemen: Middlemen who generally have dealership in consumer durable give credit to
consumer as part of their promotion strategy. They guide the customer to the banks or finance
companies. In this way, the customer gets the benefit of owing the product he desire without
having to immediately pay for it. For the dealer, this results in higher sales which would have
not been possible if he had only made cash sales.
7. Other sources:
1. Savings &loan association.
2. Mutual savings bank.
EMI Card:
1. Bajaj Finserv Lending launched an innovative product for its existing Consumer Durables
Finance customers.
2. Through the EMI card, an existing customer can buy any consumer durable by simply
swiping the EMI card across our dealer partner outlets, without the need for any repeated
documentation.
3. This is another industry which has leveraging the technology investments the company has
made and is a proof point of our commitment to investing in growing our relationship with
our existing customers.
NBFC means Non-banking financial company. A non-banking financial company (NBFC) is
a company registered under the Companies Act, 1956 of India and is engaged in the business
of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by
government or local authority or other securities of like marketable nature, leasing, hire-
purchase, insurance business, chit business, but does not include any institution whose
principal business is that of agriculture activity, industrial activity, sale/purchase/construction
of immovable property. One of the most famous NBFC Company is Bajaj Finserv.
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.
The 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.
Features of Bajaj Finserv.
Bajaj Finserv is the financial services arm of Bajaj Group and runs three core businesses of
lending, savings and insurance. Under its lending function, Bajaj Finserv offers credit cards
in association with RBL Bank. These credit cards are promoted as Bajaj Finserv RBL Bank
Super Card as they are loaded with superior features that not only cater to your everyday
needs but also help you in times of financial emergency.
Bajaj Finserv credit cards offer numerous benefits to its users. There are some benefits which
are offered on all of its cards while there are other card specific benefits. The common
benefits of Bajaj Finserv credit card include-
1. Interest-free cash withdrawal- Bajaj Finserv is the first credit card issuer to come up with
this feature. Usually cash withdrawals attract interest charges from the first day but Bajaj
Finserv is offering a 50 day interest-free period of cash advances.
2. Emergency Loan- You can convert the cash limit available to you into a personal loan and
enjoy a 90-day interest-free period. This loan can be repaid in 3 EMIs over a period of 3
months.
3. EMI Conversion- Bajaj Finserv credit card users can convert purchases of □ 3,000 and
above into easy EMIs.
4. Card Security- Bajaj Finserv offers “In hand security” on its Super Cards along with a
“zero lost card liability cover” that save you against threats of cybercrime.
5. Large capital made affordable-Bajaj Finserv offers easy and quick business finance up to
Rs. 30 lakh to small businesses at low interest rates. Whether your business has needs for
short-term loans, intermediate-term loans or long-term loans, these loans are the perfect
financing solution for your small-scale business.
6. Flexi Loan Facility-Withdraw only what you need and repay funds as per your business
cash flow at nil prepayment charges. Pay only interest as EMIs, and repay the principal at the
end of the tenor. Interest is charged only on the amount withdrawn, helping you to lower your
EMIs by up to 45% and helping your cash flow.
7. Hassle-free unsecured loans-These unsecured business loans are approved in less than 24
hours, come with easy eligibility criteria and can be applied for with just 2 documents. These
exclusive features make Bajaj Finserv the best, fastest and most hassle-free business loan
provider to meet urgent financial needs of your growing business.
8. Loans up to Rs. 30 Lakh-Whether your business has needs for short-term loans,
intermediate-term loans or long-term loans, Bajaj Finserv offers business loans up to Rs. 30
lakhs. You can use the loan amount to invest in infrastructure, expand operations, buy
equipment or inventory, or even to increase working capital.
9. No collateral-Bajaj Finserv business loans are collateral-free, which means you won‟t
have to put your personal or business assets on the line to get financing. And since you don‟t
need to pledge collateral, there is no requirement for appraisal of the value of your assets. As
a result, with collateral-free loans, funding is much faster and requires only minimal
documentation.
10. Pre-approved Offers-Apply online and get pre-approved offers for an instant loan
without security from Bajaj Finserv. Enjoy a high top-up loan or an interest rate reduction on
your business loan.
Types of card offered by Bajaj Finserv
1- Bajaj Finserv RBL Bank Platinum Choice Super Card
This is the perfect credit card to meet your daily credit requirements. At an annual fee of □
499 only, the card lets you make big-ticket purchases on easy EMIs and earn reward points
on every purchase. Some of its key highlights are-
Get 2,000 bonus reward points as welcome gift.
Enjoy 10% discount on movie tickets booked on BookMyShow for any day of the week, up
to □100. 15 such transactions can be made in a calendar year.
Earn 1 reward point for every □ 100 spent on the credit card.
Earn double rewards for online usage.
On reaching annual spends of □ 75,000, users will earn 5,000 bonus reward points.
Enjoy a fuel surcharge waiver of up to □ 100 per month.
Bajaj Finserv also offers a variant of this credit card with zero joining fees.
2- Bajaj Finserv RBL Bank Platinum plus Super Card
With this Bajaj Finserv credit card, you can enjoy unmatched reward earnings and financial
benefits. The card not only lets you meet every day needs but also lets you enjoy several
deals and discounts. Following are a few key highlights of this card-
Get 4,000 reward points as welcome gift.
Mission:
Bajaj Finserv aims to be the most useful, reliable and efficient provider of Financial Services.
It is our continuous endeavour to be a trustworthy advisor to our clients, helping them
achieve their financial goals.
Objectives of Bajaj Finserv
1. To Finance industrial by way advance, deposit or lend money, securities 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.
2. 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, bonds, units.
3. 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 and to pass on
the benefits of portfolio investments to the investor as dividends, bonus, interest, etc.
4. To carry on the business as an investment company and to underwrite, 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.
0% interest Consumer Durables Finance is available on a wide range of products and in over
101cities across India. Hereunder is an indicative list of products covered?
o LED/LCD/CTV
o Washing Machines
o Microwave Ovens
o Refrigerators
o Smart phones
o Music system
o Cameras
designed app by MobiKwik will have all the functionality of the current app along with Bajaj
Finance‟s EMI card and access to its merchant network of over 2 million retailers. Also, users
will get an access to Bajaj Finserv‟s Distribution Network of over 33,000 outlets. With its
nearby capability search option, you will quickly get information regarding nearest Bajaj
Finserv‟s distribution point or the closest MobiKwik Merchant Network outlet based on a
number of categories like gadgets, clothes, travel, groceries, etc.
MobiKwik, founded by Bipin Preet Singh and UpasanaTaku in 2009 has a user base of 55
million. This tie-up will increase the count to 100 million in a flash. MobiKwik has in all
raised $80 million till date from major investors like Sequoia Capital, American Express,
Tree Line Asia, and Cisco Investment. In the year 2013, it received a license from the
Reserve Bank of India to launch its digital wallet.
This investment will help in the development of Bajaj Finance Ltd.‟s existing businesses and
will provide a user-friendly application for customers seeking for financial services. Also, the
new Bajaj Finserv Wallet will come with a built-in digital EMI card. This will put an end to
the hassle of actually carrying a physical card. Apart from this, it will also improve the
security and make the process of blocking and unblocking easier.
Name Designation
Rajiv Bajaj
Director
D.S Mehta
Major Director
D.J balajirao
Director
Dipak poddar
Director
application by sitting at home or at your office. You do not have to stress about making time
to visit a Bajaj Finserv branch. You can also stay away from standing in long queues for
checking your loan status application. Instead, you can just go to their website and get your
loan status with just a few clicks.
Bajaj Finserv has made its mark as the one of the top non-banking financial company in India
through a gamut of Loan & credit card services provider in India. The Gold Loans and EMI
card loan services are offered across 139 locations .Bajaj Finserv has adopted a service
delivery model which ensures is not only quick but hassle free as well . It is one of the first
companies to offer doorstep delivery services for the loan application
loan repayment track and various other key information bites related to their loans and online
customer portal. Personal Loan Interest Rate offered by Bajaj Finserv is 12.99% onwards.
6. Raise a request: Log a request, check status and a more detailed view of previous
requests.
7. Navigation across apps: Easy navigation across Experia and BFL Wallet
8. Rating: with the help of the app we can rate the card.
9. Other assets: You can navigate from this app to other Bajaj Finserv assets easily through
the main navigation.
Advantages of consumer finance:
1. Compulsory Savings:
Consumer credit promotes compulsory savings habit among the people. To make periodical
installments knowingly or unknowingly, people cut short their other expenditures and save.
These savings ultimately fetch them ownership of an asset in course of time. Thus consumer
credit adds to the savings habit of people.
2. Convenience:
Considering the nature and type of customers, consumer credit facility offers schemes to the
convenience and satisfaction of the customers. Walk in and drive out, pay as you earn,
everything at the door step, one time processing etc. are examples.
3. Emergencies:
Consumer credit facility is available to meet personal requirements like family requirements,
festival requirements, emergencies etc. The credit facility is not strictly restricted to
purchasing of consumer durables alone. In ordinary course of life people come across number
of urgent financial requirements, for which consumer credit offers a better solution.
4. Assists to Meet Targets:
In all business activities, there will be targets to be achieved by the executives. Most people
abstain/ postpone purchasing for want of sufficient fund. When the dealer themselves arrange
for fund people get attracted and purchase take place in large quantity. Thus it assists to meet
sales targets and profit targets.
5. Assists to Make Dreams to Reality:
A car, a TV, a washing machine, a computer, a laptop, a mobile phone, etc. is undoubtedly a
dream of an average human being. But people may not purchase because of fund problem. In
those cases consumer credit facilitates an opportunity to possess and own those dreams on
convenient terms.
Objectives
Review of literature
Consumer credit regulation was ignored by both Parliament and the courts for over 800 years,
with the judges and Members of Parliament taking the attitude that there was no reason to
interfere with fairly concluded contracts The first piece of legislation to deal with consumer
credit was the Bills of Sale Act 1854, which required bills of sale to be registered. This
allowed the courts to intervene for the first time, since an unregistered bill of sale was void
and could not be claimed by creditors. This act was followed by the Bills of Sale Act 1878
and the Bills of Sale Act (1878) Amendment Act 1882, which provided limited protection for
debtors. Outside of these acts, however, little was done between 1854 and 1900, and
moneylenders used this to their advantage, sometimes abusively; the report of the House of
Commons Select Committee on Money-Lending in 1898 included testimony from one
moneylender who admitted he charged 3,000% interest, while another had worked under 34
different aliases to avoid having notoriety associated with his name.
As a result of this report the Moneylenders Act 1900 was passed, which required registration
for moneylenders and allowed the courts to dissolve "unfair" moneylending agreements. This
act had two main weaknesses, however; firstly, many of the debtors who would like to sue
their moneylender to have the agreement cancelled were by definition poor, and could not
afford legal representation. Secondly, the Act only focused on specific types of lenders;
lending by a single moneylender was covered, lending by a bank was not. In 1927 a second
Moneylenders Act was passed, which required licensing as well as registration and forbade
moneylenders from employing agents, canvasses or sending out unsolicited advertisements.
Unfortunately the 1900 and 1927 Acts also covered commercial transactions, and since
people lending money in a commercial area were not excluded as banks were, a slight
infraction could make a loan completely irrecoverable. This was partially solved with the
passing of the Companies Act 1967, which allowed the Board of Trade to give individual
moneylenders licenses saying that they were acting as banks, not moneylenders.
As a result of the restrictions on business caused by the Moneylenders Act 1927, the idea of
hire-purchase developed. These were first regulated by the Hire-Purchase and Small Debt
(Scotland) Act 1932, which only covered Scotland; England and Wales was first covered by
the Hire-Purchase Act 1938, later amended by the Hire-Purchase Act 1954 and the Hire-
Purchase Act 1964. The 1965 Act applied to all hire-purchase agreements worth less than
£2,000 and when the hirer and buyer was not a corporation.
Crowther Committee
In 1965 the Crowther Committee was established to look at the state of consumer credit law
in the United Kingdom. Chaired by Lord Crowther, the Committee began sitting in December
that year and eventually extended their review to cover consumer credit generally rather than
just the bills of sale and moneylending they had initially been concerned with, and their
report was finally published in March 1971.The report discussed the economic, social and
legal aspects of consumer credit, and concluded that the existing law was so confused and
unsatisfactory that it was not worth amending. Instead it recommended the complete repeal of
all existing legislation and its replacement with two new acts: a Lending and Security Act,
which would regulate legitimate business transactions, and a Consumer Sale and Loan Act
which would regulate consumer credit and establish a licensed system for its use.
The reaction to the report from consumer and business organisations was overwhelmingly
positive, but the government initially did nothing, since the Department of Trade and Industry
wanted time to work out the particular details of any Acts. Baroness Phillips eventually forced
their hand a year later, who initiated a debate in the House of Lords on the matter. The
government's official statement was that they were willing to accept almost all the
recommendations made about consumer credit; they did not wish to legislate on lending and
securities. In February 1973 they created a Voluntary Code which they expected those
lending to observe. The Code set out guidelines for loaning money to individuals and
disclosing the cost of the loan. The Act was first introduced to Parliament as the Consumer
Credit Bill at the beginning of November 1973, and initially ran to 96 pages. It was given its
second reading on 14
November, and was welcomed by both the government and opposition. By February 1974 it
had passed through the Committee Stage, but its progress was cut short by a general election
in the same month. The Act did not go to the full extent suggested by the Crowther
Committee's report, with protection only being available for consumers, not for the credit
industry. The Act was widely supported by all sides of the political spectrum, and by
academia in1925.
Over the last few years, consumer credit gained momentum to reach about 14 per cent of the
total credit to private sector in February 2008-against 2.1 per cent in 2002. Considering it the
best way to utilise excess liquidity available at that time and benefit from the low interest
rate, almost every bank got involved in consumer financing. But this proved to be a short-
lived phenomenon and became the very first causality of the recent banking and financial
crisis.
The policy makers try to imitate the example of other countries. They have put the cart before
the horse. In the US and other countries, where consumer finance form a substantial part of
total credit, it is the need of the consumer society which necessitated the emergence of
consumer finance. But here it was assumed that by taking the benefit of excess liquidity and
low interest rates, cheap consumer loans would establish the consumer culture and strengthen
the middle class which, in turn, would boost the economy. But this proved unrealistic.
Currently, the banks are suffering from tight liquidity position but they are ready to give
credit to the private sector. However, the overall credit flows to private sector have slowed
down due to economic slump in the US and EU markets and the structural problems of textile
industry etc. The borrowers are not interested in getting the loans. In July-February 2009, the
credit to private sector grew only by 4.6 per cent in the last year. In fact, during December-
February 2009 the credit to private sector declined by Rs12.7 billion in contrast to an increase
of Rs145.8 billion in July-November 2008. But the situation is different in the case of
financing of various categories of consumers. Banks are not only reluctant but most of them
have altogether stopped the consumer financing. Thus the Outstanding amount for all
categories of consumer finance has declined during the first eight months of the current fiscal
year.
Research methodology
This study was conducted to know how often consumer purchase products on Bajaj Finserv,
and there reason behind purchasing products through loan and also to know about the
different financial schemes and the loan procedure for durable product in Bajaj Finserv.
Gender
From the data it is seen that 58% are female and 42% are male.
On a scale of one to five how would you rate Bajaj Finserv EMI card?
Which of the following option best describes your current employment status to use Bajaj
EMI card?
Have you or any family members bought any consumer durable products in last one year?
(Products like mobile phones/kitchen home appliances/other electronic gadgets)
Have you availed any type of loan facilities from Bajaj Finserv?
Are you satisfied with the service that is provided by Bajaj Finserv?
Findings
• Most of the consumers were aware of the consumer durable loan availability and only
less number of consumers were there who didn‟t have any idea about the loan
availability.
• Consumers were aware of the Bajaj Finserv EMI card they were satisfied with the
services provided by the company.
• While paying through card, that much amount is blocked from the card .As there is
monthly limit in each card, so consumers were comfortable with the Bajaj Finserv
lending.
• Bajaj Finserv was rated as 5 by many of the consumers from this we can say that it
has good loan approval and easy installments.
• To use Bajaj Finserv card most of the consumers were employed and only few were
there who were retired to use the card.
• The monthly income of most of the consumer was more than25000.
• In the last one year most of the consumer have buyed mobile phones, on Bajaj
Finserv as it also provides kitchen appliances and other electronic gadgets.
• The sources of finance of many of the consumer were from their savings, as they like
to save their income and buy the products.
• According to the consumers Bajaj Finserv was the most efficient and trustworthy
NBFC company.
• Bajaj Finserv lending provided loan on consumer durable product to the customers as
per their requirement.
• As there are many benefits of Bajaj Finserv but according to the survey it has card
security.
• Although consumer buy products on loan but they prefer to buy Bajaj Finserv
because it has easy installment on large consumption.
• According to the survey the aim of the Bajaj Finserv should be an efficient provider
of financial service.
• As there are many modes of payment such as purchasing goods on direct cash, credit
card, E Commerce payment, but most of the consumer felt that Ecommerce payment
is more convenient.
• Most of the consumer adopted cashless payment system because it has discount and
rewards.
• According to the consumer the loan process is not difficult and they are comfortable
with it and they have rated it as 5 in analysis with this we can know that they are
satisfied with the service provided by the Bajaj Finserv.
Suggestions
✓ Consumer finance has to do with the lending process that occurs between the
consumer and a lender. In some instances, the lender may be a bank or financial
institution. At other times, the lender may be a business that offers in house credit in
exchange for the business of the consumer. Consumer finance can include just about
any type of lending activity that result in the extension of credit to a consumer.
✓ Most people have received financial assistance in obtaining desirable products
through the use of consumer finance methods. In retail banking, the lender extends
secured and unsecured loans to consumers who wish to purchase automobiles, homes,
or engage in other activities that require substantial financing, such as remodelling a
home. Generally, consumer lending of this type caries some degree of competition,
since the consumer with a solid credit rating can often shop around and secure
superior interest rates and terms for the loan agreement.
✓ At the same time, not all forms of consumer finance are in the best interests of the
consumer. In many parts of the world, institutions are in the business of lending
money even to consumers with poor credit ratings, or who lack a reasonable ability to
repay the borrowed funds. This can take the form of credit card offers, loans with
extremely high rates of interest included in the finance structure of the loan, and other
terms that will be difficult if not impossible for the consumer to meet.
✓ As with any type of financial arrangement, it is important for the consumer to
understand the exact nature of the commitment that is made as part of any consumer
finance strategy. By understanding and accepting the terms and conditions associated
with any lending situation, the consumer is pledging that the ability to repay within
terms is present, and that the consumer has every intention of complying with each
component or section of the loan agreement. To this end, it is in the best interests of
the individual consumer to seek out the most desirable arrangements for any type of
consumer finance, taking care to avoid any situation that will place an undue amount
of stress on the resources in the possession of the consumer.
Conclusion
• This study concludes that the Bajaj Finserv is the strongest finance for the consumer
durable products and it provides very good schemes for the customers.
• The customers are happy with the Bajaj EMI card as it provides good financial service
and after sale service.
• Bajaj Finserv is the most efficient and trustworthy NBFC.
• The financial position is strong and there is scope of growing in NBFC.
• The population is growing so as the demand for consumer durable products is also
increasing.
• Flexible EMI scheme in many products are available. Bajaj Finserv lending provides
many schemes customer can choose any EMI scheme option according to their paying
capability.
• Customers think that Bajaj Finserv will take some hidden charges from them ,if they
take durable loan at 0% from Bajaj Finserv .so that wrong thinking of customer was
being removed through the survey.
• Bajaj Finserv initially has the system of swiping EMI Card which is more efficient
and time saving.
• No other company has such a huge sales force which the Bajaj Finserv lending has
built.
• 0% interest finance of consumer and lifestyle product has been getting a tremendous
success.
Bibliography
Book:
Innovative Financial Services Book Rishabh Publication
Newspaper:
• Economic times
• Times of India
Internet:
http://www.slideshare.net/niteshkumar712161/bajaj-finserv-presentaion-
nitesh-kumar
Annexure
1. Are you aware about consumer durable loan availability?
• Yes
• NO
2. Do you own EMI card of Bajaj Finserv?
• Yes
• No
3. Which payment mode you feel is convenient to buy consumer durable products?
• Bajaj Finserv
• Cash
• Credit card
4. How would you rate Bajaj Finserv EMI Card?
• 1,2,3,4,5
✓ 5. Which of the following option best describe your current employment status to use
Bajaj EMI Card?
• Employed
• Unemployed
• Retired
6. Average monthly income?
• Less than 10000
• 10000-25000
• 25000-50000
7. Have you or any family member bought any consumer durable product in last one year
(products like mobile phones/kitchen appliances/other electronic gadgets)?
• Yes
• No
8. If yes what was your product that you purchased on Bajaj finance?
• Mobile phone
• Kitchen appliance
• Other electronic
• None of these