citifinancial file completed

Strategic Alliances__Loan Mitra

SUMMER TRAININGREPORT

STRATEGIC ALLIANCESOF

LOAN MITRAA training report submitted in partial fulfillment of the requirement for the degree

of

MASTERS OF BUSINESS ADMINISTRATION

SUBMITTED BY

RAHUL DHAR20-MBA-06

THE BUSINESS SCHOOLUNIVERSITY OF JAMMU

http://www.jammuuniversity.in/index.asp


C ERTIFICATE

This is to certify that the Summer Project work of Mr. / Ms

___________________________ entitled

_______________________________________________ is a bona-fide piece of work

and that this work has not been submitted elsewhere in any form earlier. The project work

was carried out during _______ to _______ in _________________________ (Name of

the Organisation)

Date: RAHUL DHAR

20-MBA-06 Batch 2006-08



ACKNOWLEDGEMENT

Interdependence is a higher value than independence. This

concept flows in the organizational climate of Citifinancial

and we learnt a lot in this environment created by people

who are responsible for such a great corporate

environment. We are grateful for the wisdom and help of

many who helped us in our training program .

We are thankful to Mr.Sudhir Menon (Sales Head

Punjab) who had given us an opportunity to do the summer

training. His constant support kept us motivated. We are also

thankful to Mr.Ankur Pal (Manager Distt. Ludhiana) for his

constant help during these two months without,which it

would definitely have been difficult. We under his

supervision were turned from students to professionals . I

would like to thank Mr.Amit sharma (BM Kitchlu Nagar) who

gave me the project and made me understand various tacks

of the business. Also I am grateful to Mr. Amit Sharma

(marketing ) who took time to teach me marketing concepts

and welcomed all my questions .

Rahul Dhar



CONTENTS

SUMMARYABOUT CITI GROUPHISTORY OF CITI GROUPCITIFINANCIAL INDIAPRODUCTS OFFERED BY CITIFINANCIAL INDIABUSINESSABOUT THE PRODUCTMARKETING MODEL FOR CITIFINANCIALMARKETING METHODOLOGYINGREDIENTS OF TEAM BUILDING & MAINTENANCE:STRATEGIES - CITIFINANCIAL Vs COMPETITORSLOAN MITRA

APPOINTMENT OF THE LOAN MITRA PROCESS LOAN MITRA TIE UP PROCESS HOW DOES IT WORK CREDIT PROCESS (NEW BORROWER PROGRAME PROCEDURE) CREDIT PROCESS (EXISTING BORROWER--PL) PROCESS FLOW



CREDIT PROCESSWHY DO THEY JOIN?CROSS SELLINGPREREQUISITES FOR A GOOD LM’s IN MAKING NEW CUSTOMERSLEARNINGS FROM THE PROJECTPROCESSES LEARNT DURING THE TRAININGTOWS ANALYSIS OF CITIFINANCIAL:CONCLUSIONDEFINITIONS:REFERENCESAPPENDIX 1 HISTORY

APPENDIX 2 Regulatory and Other Measures for NBFCAPPENDIX 3 PRIVACY AT CITIFINANCIAL INDIA

SUMMARY

You are in need of some money urgently as your daughter has got admission to study in a US university. However, she is not getting a scholarship right away. Also, your company does not have a scheme for giving loans to its employees. The fixed deposit amount in your bank is not enough and you do not expect to receive a windfall by way of a lottery or a will. So what would you do?

Perhaps, the personal loans offered by banks/ NBFC’s are for you. These loans, as opposed to others, can be used for anything – for your daughter’s marriage to repairing your house. And getting it is quite easy. A salary slip, proof of personal identity and signature will just be fine. Other things necessary could be a passport sized photograph and credit card statement.



Lending of money is a very old business, but what we had was an unorganized business. If I am not wrong it was a business many detested .The reason was the high amount of interest that was associated with it .But this sector has grown into an organized sector regulated by law. The banks were the first to start the lending business. Now the non banking financial institutions have joined the race for providing the advances to the common people apart from the business institutions .The main reason is the high growth of the Indian economy Many businesses are growing ,people are having the ability to pay and the increasing incomes of the middle class are being matched with their desires.

Citifinancial is an NBFC that provides personal loans. The best part is that it does not ask for a security. It provides loans on the basis of the paying ability of the customer.

During the training I came into direct exposure of working with the sales force and guiding them and taking decisions. I had to lead a team of DSA’s .During the initial part of the training I worked as a CRM, team leader and even as a DSA, so as to get a good feel of the work. Sine the branch which was allocated to me was new ,a lot of other thing were going on .The branch had not achieved breakeven point were the initial expenses were recovered from the sales .Since the Citifinancial works on the Branch Network model , every branch has to reach a point were its expenses of operation are recovered from the sales .

The next part was allocating different Loan Mitras .Loan Mitras are a part of the strategic alliances of the Citifinancial. There are a lot of marketing alliances of Citifinancial.they include Graihlakshmi,various alliances like Big Bazzar,Vishal Mega Mart etc .i worked on Loan Mitra channel and the Graihlakshmi channel. Initially I worked with the Loan Mitra channel. I had to appoint Loan Mitras who would bring in business for my branch. The Loan Mitra



channel is a concept that tried to catch the footfall on a retail shop. As we know that there are a lot of people who come to collect their groceries at a retail shop .This place is a good spot to capture the attention of the customer .Under this channel we made these mom and pop retailers as associates who would help us making these customers understand our product and help it to sell.Under the Graih lakshmi channel we targeted the ladies who wanted some extra cash and had a good social circle .These women were called HBD’s .They were given a monthly pay for providing the loans. While in the case of the Loan Mitra payout was totally commission based .

The process included explaining the product .

Explaining the commission .

Explaining the benefits of the channel.

Explaining the process of Loan disbursement.

In the end all the Loan Mitra’s and Graihlakshmi’s were handled by the main branch marketing manager. A proper scanning of the channel mates was done .All the details of LM’s and HBD’s was sent to the Delhi branch and they were updated on the computer so that they became the part of the existing MIS.



Our growth over the years has been extraordinary. Despite this empirical record, we are sometimes asked: Can you still grow? Are you too big to grow? Are you dependent on “big deals” for too much of your growth?

- Chuck Prince, CEO and Bob Willumstad, CFOin 2003 Annual Report

Beth Markle1 put down the phone, and quickly jolted down several talking points on her legal pad for the next meeting. She had just spoken with the manager of a new Citibank retail branch in Brooklyn. As Citibank N.A.’s Director of Product and Marketing, Markle is responsible for deciding whether or not Citibank retail branches nationwide would begin offering free checking to all customers. Admiring the view of Lower Manhattan skyline from her office on the 37th floor of Citigroup Tower, she wondered what the banking landscape would look like 10 years from now.

As more and more financial institutions began to offer free checking, Citigroup – the most profitable company in the world in 2003 – felt more and more pressure to make a decision. Markle had mixed feelings about free checking. On one hand, it would attract more customers, but on the other hand, it could hurt Citibank’s brand. “We do not want to just ‘follow the herd’. We want to make our own decision based on what is right for us,” Markle said, “However, it is time to make a decision.”

1


http://www.citigroup.com/citigroup/business/index.htm#%23


Citigroup

In 2004, Citigroup was the largest U.S. bank holding company and a leading global financial services firm. Headquartered in New York, it had a presence in more than 100 countries across six continents, where its 275,000 employees managed 200 million customer accounts. Its services included credit cards, consumer finance, retail banking, corporate and investment banking, retail brokerage, life insurance and investment management. Major brand names under Citigroup’s trademark red umbrella included Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Travelers Life and Annuity

Founded in 1812 with $2 million authorized capital and $800,000 paid-in capital, the City Bank of New York opened



http://www.citi.com/

http://www.citicards.com/

http://www.citifinancial.com/

http://www.citibank.com/CitiMortgage


http://www.travelersla.com/

http://www.primerica.com/

http://www.banamex.com/

http://www.citibank.com/dinersus

http://www.salomonsmithbarney.com/

http://www.citigroupassetmanagement.com/

http://www.citibank.com/privatebank

http://www.citigroupai.com/

http://www.citicapital.com/


for business to serve a group of New York merchants. Over the next century, the bank continued to expand and diversify its product line and services, serving businesses as well as individuals. By 1929, it became the largest commercial bank in the world with over $1 billion in assets, with offices in Asia, Europe and India. In 1976, the bank changed its name to Citibank, N.A. (National Association), following its parent holding company’s change to Citicorp two years ago to “better suit its global business”

Major Events

Citicorp-Travelers Merger

On October 8, 1996, Citicorp and the Travelers Group completed their $70 billion merger to form Citigroup, Inc. Citicorp was then the 2nd largest commercial bank and Travelers Group a leading global insurance and investment banking firm. Such alliance between a commercial bank and an insurance company or an investment bank was previously illegal to prevent a conflict of interests2. The Citicorp-Travelers merger thus represented a new era of horizontal expansion. As an equal merger, the CEOs of the two companies - Sanford (Sandy) Weill of Citicorp and John Reed of Travelers - became co-CEOs. However, the configuration did not work out, and Reed resigned in February 2002.

Expansions and Acquisitions after the Merger

Under the leadership of Weill, Citigroup’s acquisition spree began. In the first couple years, its drive for “a relentless focus on growth, aiming to increase earnings by double digits on average”3 was fulfilled by acquiring or becoming the major stakeholder in over a dozen international banks and brokerages, including Nikko Beans, 2

3



a Japanese online brokerage firm, Bank Handlowy w Warszawie SA, a leading corporate bank in Poland, Mexico's "Banacci" (Grupo Financiero Banamex-Accival) and the majority of Diner’s Club Europe.

It had three major acquisitions in the U.S. In July 2001, Citigroup acquired the full-service commercial bank European American Bank, adding 97 branches in the New York Area4. Four months later, it acquired Golden State Bancorp, the parent company of First Nationwide Mortgage and Cal Fed, adding 352 branches and approximately 1.5 million new customers in key California and Nevada markets. At the May 29th, 2003 Investor Presentation, Bob Willumstad, President of Global Consumer Group, announced the company’s intentions to expand distribution by market share, geography and the Hispanic market. In January, 2004, it announced the acquisition of Washington Mutual Finance.

California Free Checking Trial

As a result of the acquisition of Golden State Bancorp, all Citibank branches in California began offering free checking. The decision was made because there was “no choice”, according to Markle. California customers were used to free checking, and it would be impossible for Citibank to compete if they did not offer a comparable package. No affects were observed on Citibank branches that switched to free checking, and customers were reported to not notice a difference.

Enron Litigation

In 2002, former Salmon Smith Barney was under investigation for involvement in the Enron corporate fraud trial. On April 28, 2003, Citigroup announced that Citigroup Global Markets, Inc. (formerly Salomon Smith Barney) had 4



reached an agreement with the New York Attorney General and regulators to resolve outstanding investigations into research, IPO allocation, and distribution practices. On July 28, 2003, it agreed to pay over $130 million in fines to the Securities and Exchange Commission and the New York State. As part of the agreement, Weill would not be charged and Citigroup was not liable for any wrongdoings, however, it had issued statements of regret to customers and investors.

New Leadership

On October 1, 2003, Charles O. (“Chuck”) Prince succeeded Weill as Chief Executive Officer of Citigroup, and Robert B. Willumstad, President, added Chief Operating Officer to his role. Mr. Weill would remain Chairman of the Board until the 2006 annual shareholders meeting.

Citibank Consumer Retail Banking

Retail banking was the 2nd biggest grossing product line in the Citigroup family, just after its world leading credit card business. It had a net income of $4.2 billion in 2003 Citigroup’s retail banking offered banking, lending, insurance and investment services to individual consumers around the world. It had 3,100 retail bank branches, 9,800 ATMS, online services as well as a network of Priamerica independent agents worldwide5.

Citigroup’s retail banking boasted many successful innovations; in the early 1920s, it was the first national bank to offer services to consumers; in 1961, it created the Certificate of Deposit and in the late 1970s it widely deployed and popularized the use of 24-hour ATMS in the U.S.

5



However, it took them over a decade to launch a fully integrated Internet service. Citigroup’s size had created a hurdle for integration of its many financial services onto one single Web portal. As other national and regional banks began to offer the technology to consumers, Citigroup was still trying to create a “new standard”. It launched the award-winning CitiDirect in late 2000. However, it is estimated that fewer of its consumers actually conduct transactions online than Bank of America and Wells Fargo.

Markle joined the managerial associate program after graduating from business school in 2000. At the end of the comprehensive training program, she chose to work in the Marketing Division of Citibank. As the Director of Product and Marketing, Markle’s marketing team is responsible for working out the overall marketing strategy nationwide, in key markets and by market segment. Some major concerns in her job included the acquisition and retention of customers.

“Citi, Live Richly” campaign

Citigroup gave the impression of an elite bank. Its average borrower in North America belonged to the “Middle America” - 47 years old with an income of $43,000 to $57,000 a year, married with a house and 14 years of schooling.

To leverage upon its brand and international presence, and to emphasize itself as a one-stop financial service provider, in mid-2003, Citigroup ran a series of advertisements with a tag line of “Citi, Live Richly”. Gracing bus stops and billboards, the posters all had a uniform simple design and carried messages emphasizing quality time with your family and yourself. The large posters had a white background, a distinct red arch over the royal blue “Citi, live richly” letters. The visible campaign drew attention to Citigroup’s new focus on promoting the idea of THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


asset management to mass consumers as well as young, urban consumers

Retail Banking Fundamentals

Retail banks provided services to a diverse clientele with a vast range of needs in the business of retail banking. When retail bank personnel reviewed customers, they looked at the prospect of gaining revenue, the actual cost to serve a customer, and finally profitability. Numerous different variables were taken into account when determining how profitable a customer would be. A customer would be more profitable to a bank if the customer kept a higher balance in the account. Similarly, one who performed most of his transactions online, and thus eliminated the paper and bank employee aspect of a transaction, would be more profitable to a bank.

Revenue

In its most basic form, one of the two components that retail banks viewed when assessing their business was the revenue that could be gained from a customer. Customers generated revenue for the bank in three basic ways: loan interest, fee income, and investment income resulting from deposit balances. Loan interest generated the most revenue for retail banks. Therefore, banks were very conscious of how this area affected the overall picture. Fees were generally levied for checking accounts, late payments, and overdrafts.

Cost to provide services

On the contrary, customers also cost retail banks money. The second component was the total cost of services. Similarly, there were three general costs that a bank must incur while providing services to customers: interest on savings accounts and certificates of deposit, transactions, and fixed costs. Each time a transaction occurs, a bank must THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


pay a fee. As mentioned earlier, online transactions are less costly than teller transactions. The art of successful retail banking, as with any business, became maximizing the profits gained and minimizing the cost of providing services to a customer.



Source: REF 1

History of

Pioneering Beginning

Founded by Alexander Duncan as Commercial Credit in 1912, our company was a pioneer in the consumer finance industry. In 1916, we offered an installment loan program to help people purchase what was then an exciting new invention - the automobile. That led to the development of installment buying plans for home appliances and other consumer goods.

Growing with America

In the next decades, the firm acquired a major credit insurer and a casualty insurance company. In 1944, we organized an insurance unit that later became American Health & Life Insurance Company. In 1968, Commercial Credit became a wholly owned subsidiary of Control Data Corporation.

Going Public

Wall Street legend Sanford I. Weill assumed control of the operations of Commercial Credit in 1986 and took the company public. Within two years, the company acquired Primerica Corporation, the parent company of several investment, financial services and insurance firms, including the well-known Smith Barney.

Joining the Travelers Group




In 1992, Primerica purchased 27% of Travelers Insurance, a company with one of the most recognizable logos in the U.S. - the red umbrella. Less than a year later, Primerica purchased the remaining 73% of Travelers, which later adopted the name Travelers Group. In subsequent years, Travelers Group acquired Shearson-Lehman's retail brokerage, Aetna's property and casualty business, Security Pacific Financial Services, and Salomon Brothers, creating the nation's third largest investment house - Salomon Smith Barney.

The Creation of Citigroup

In 1998, Travelers Group merged with banking powerhouse Citicorp to create Citigroup, a global financial services company serving 20 million customers worldwide. Citigroup's businesses include asset management, banking, credit and charge cards, insurance, investments, investment banking and trading.

An International Company with a New Name

In 1999, we purchased 128 offices of Texas-based Associates First Capital, giving us more than 2,000 offices in 45 states. We then turned our focus to Canada, buying Associates First Capital offices there. In September, we changed our name to CitiFinancial® to proudly recognize our affiliation with our parent company and to better reflect what we do today. As a member of Citigroup, we continue to provide you with a full range of exceptional products and services to help you find a financial solution that's right for you. Citigroup is the world's most global financial services company whose other subsidiaries include Citibank, Travelers Life and Annuity, Smith Barney, and Primerica.

A Global Leader in the New Millenium

In November of 2000, Citigroup acquired Associates First Capital Corporation; the largest publicly traded finance


http://www.primerica.com/

http://www.smithbarney.com/

http://www.travelersla.com/

http://www.citibank.com/domain/index1.htm


company in the U.S. with managed assets of more than $100 billion and 2,750 offices in the U.S. and 13 other countries. The Associates has a particularly strong presence in Japan and in Europe, where it has more than 700,000 customers. This transaction marked a defining moment in Citigroup's history, building upon its leadership position in the global economy.

Spin-off Plans Ensure a Bright Future

At the end of 2001, Citigroup announced its plans to spin off its wholly owned subsidiary Travelers Property Casualty Corporation by selling up to 20% in an initial public offering and spinning off its remaining majority interest on a pro-rata basis to Citigroup shareholders in a tax-free transaction. The initial public offering took place in the first quarter of 2002, with the spin-off concluded at year-end 2002. Citigroup units will continue to offer Travelers Property Casualty products. The spin-off enables Citigroup to focus its resources more fully on higher growth areas of global financial services and, at the same time, positions Travelers Property Casualty as an independent public company.

Crossing Boarders

In the third quarter of 2001, Citigroup purchased Mexico's "Banacci" (Grupo Financiero Banamex-Accival), renamed it Grupo Financiero Banamex and integrated operations in Mexico under the Banamex brand name. It is the largest foreign acquisition in Mexico and largest financial sector deal ever in Latin America.

Expanding our Reach

In the third quarter of 2002, Citigroup completes the acquisition of Golden State Bancorp, parent company of First Nationwide Mortgage and Cal Fed, second-largest U.S. thrift. The transaction enabled Citibank to expand its retail



distribution franchise in key California and Nevada markets and add approximately 1.5 million new customers.

Accelerating Growth

In the first quarter of 2004, Citigroup announced the acquisition of Washington Mutual Finance Corporation for $1.25B. The acquisition included 409 WMF offices located in 25 states, primarily in the Southeastern and Southwestern United States. The company has more than 2,300 employees and total assets of approximately $4 billion, as of September 30, 2003. "This transaction, which solidifies CitiFinancial's position as the leading community-based lender in the U.S., exemplifies how we are focusing our proven acquisition capabilities on incremental acquisitions that expand the reach of our businesses both geographically and strategically," said Bob Willumstad, Citigroup President and Chief Operating Officer.

CITI FINANCIAL -----INDIA

Citi financial India Business Model: THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


Know the customer.

Community based lending.

Customer service through relationship to be enhanced at all times.

Delinquency management is customer management.

Use all I-Loan functionalities.

Have good credit practices.

Operations, control and compliance are key areas.

Reward and recognize performance.

Citi financial India Vision:

Superior products

Excellent customer service

The right technology

Supporting the community

Integrity



Business Philosophy:

Community based lending model

Direct face to face interaction with customers to enhance credit quality and build relationship

Use tools such as extensions and rebooking to help customer regularize their repayments.

Bonding with the neighborhood through community activities.



PRODUCTS OFFERED BY CITIFINANCIAL INDIA:

PERSONAL LOANS- cash loans for any purpose SALES FIANANCE- Finance for consumer durables and two wheelers MORTGAGE- Finance to purchase homes or financing of homes for any purpose INSURANCE- Administrator for Max New York Life Insurance

ADVANTAGE CITIFINANCIAL INDIA:

Especially designed for salaried and self employedLoan upto 10lakhsEquated monthly installment is calculated as follows:

EMI = Finance amount + { Finance amount * interest rate * installment period(months) } /

Installment period (months)The best in classLoans based on assessment of actual income and repayment capacityMaximum amount as per eligibilityEasy documentationEasy repayment optionsFlexible income recognitionQuality customer careDebt consolidation – Professional debt management and advisory services to restructure existing loan repayments.



BUSINESS

Citifinancial Consumer Finance India Ltd. Is India’s youngest and one of the fastest growing new private sector companies. Over the last one year it has launched a blitzkrieg of initiatives that are refreshingly different and aimed at providing superior service and value for money to the Indian consumer. The CCFIL is surging ahead from strength to strength and is fast transforming into a technology led, service driven and financial services marketing company managed with intellectual integrity.

It offers products like cash loans, consumer durable and two-wheeler loans, home loans and loans against property, administrator for Max New York Life Insurance.

Citifinancial India has 2,718 employees working in 139 cities with 280 personal distribution points and 33 mortgage branches. Citifinancial believes in meeting face-to-face with customers to better understand their needs. Decisions are made locally by more than 13,000 Citifinancial team members. At Citifinancial India they not only make loans, they develop relationships with individuals and their families. In fact half of the loans they make are to people who had previously borrowed from them. (Excerpt from Citifinancial website)

PERSONAL LOANS IN CITIFINANCIAL



It was started in the year 2000 in Citifinancial, and has grown to 450 branches and 78 sales point. The book size is of Rs.1,750 crore which is 47% of total monthly bookings (in value). Citifinancial India boasts of 53,000 loans booked per month. The customer base constitutes around 5 lakhs in 2006. The average ticket size is of Rs.33759 and tenor is 24-36 months. Risk based pricing ranges from 21% to 60% with EBIT of Rs.1,500 per loan.

PERSONAL LOAN VISION

Disburse 1 lakh personal loans per month. Build 1,000 branches by 2009. To provide exemplary service to our customers so

that they continue their relationship and refer to start relationship with Citifinancial.

TARGET CUSTOMER

Clerical staff in government organization. Self-Employed running small time business. Age group of 25-50 years. Stable in the city for at least a year. Stable in his job for atleast 2 years. Has a bank account.

So the target customer is middle and low middle income level population.



ABOUT THE PRODUCT

DEFINING THE PRODUCT

The main product of the Citifinancial is the loan.

The line of the product consisted of the personal loans and these had

their own codes

Personal loans CODE

J PERSONAL LOAN

20-60 k

JP PERSONAL LOAN PLUS

60-1.5 k



Features of Product

Unique Segmentation

Easy and minimal Documentation

Quick Turnaround

Surrogate program

Competition

Private financers

GE Money

HDFC India Bulls

ICICI

LOAN SYSTEM

Loan system is prevalent these days as it is most suitable for single, non-repetitive transactions and is withdrawn only once. Credit is given for a definite purpose and for a predetermined period. This service is generally provided for a cost, referred to as interest on the debt. A borrower may be subject to certain restrictions known as loan covenants under the terms of the loan. When a loan is given against a security or otherwise, a separate loan account is opened and debited with amount of loan which is paid to the borrower. The loan may be repayable in installments or in lump sum but generally it is payable in installments. Banker is at liberty to grant or refuse such a request of the customer depending on: (1) his cash resources, (2) THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


reliability, (3) solvency, and (4) the credit policy of the Central Bank. Legally, a loan is contractual promise of a debtor to repay a sum of money in exchange for the promise of a creditor to give another sum of money.

Types of Loans:

Mainly these are:-1. Short-term Loans:

a. Short-term loans are provided to meet the working capital requirements of the borrower against the security of tangible assets i.e. movable assets like goods and commodities, shares, debentures, etc.

2. Medium and Long-term Loans: a. These loans are granted for the period more than

one year. The purpose of medium and long-term loans is purchase of capital assets, expansion and diversification of existing units or establishment of a new unit. These types of loans are granted by specialized financial institutions like ICICI, IDBI, and state finance corporations. Now a days customer service has become the main objective of the banks. So fulfilling the every need of the customer is the policy of bankers. Banks in the form of consumption loans like home loans, personal loans finance such consumption needs of the needy and reliable customers and the bank against the amount so advanced keeps adequate security.

Another classification is:

SECURED LOANS: THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


Those loans which are given against some lien, mortgage or hypothecation agreement or backed up by any other security are known as secured loans.

UNSECURED LOANS: Unsecured loans are given without any collateral or

security. These may be available from financial institutions under many different guises or marketing packages:

Credit card debt, Personal loans, Bank overdrafts, Credit facilities or lines of credit Corporate bonds

In India, the loan rates are regulated by credit policy.

PERSONAL LOAN: Secured or unsecured loan given to an individual for any personal purpose like school fees, home improvement, share purchase, vacation, business expansion.

SECURED PERSONAL LOAN: A Secured personal loan is simply a loan that is

secured against property. Benefits of Secured personal loans include:

Lower monthly repayments than secured personal loans.

The ability to borrow more money. Spread repayments over a longer period of time.

UNSECURED PERSONAL LOAN: An Unsecured personal loan is a personal loan where

the lender has no claim on a borrower’s property should they fail to repay. Instead, the lender is relying solely on the ability of a borrower to meet their loan borrowing THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


repayments. The repayment period will range from anywhere between six months and ten years. Unsecured personal loans are offered by traditional financial institutions like building societies and banks but also recently by the larger supermarkets chains. Unsecured personal loans are invariably more expensive than secured loans, and the repayment periods demanded by lenders are shorter too. This is because they have no guarantee that you can repay the loan, and therefore, charge you more in interest to cover the cost of insurance policies that they need to take out to protect them should you default on repayments. In the event that a borrower does not pay up, the lender will invoke the terms of the legally-binding credit agreement and pursue the borrower through the legal system.

CREDIT POLICY 2007:

As per the credit policy of India in the latest year of 2007, general provisioning requirement on standard advances in specific sectors, i.e. personal loans, capital market exposures, residential housing loans beyond Rs. 2 million raised from the previous level of 0.40% to 1%.



MARKETING MODEL FOR CITIFINANCIAL

The marketing of Citifinancial applies the Micro marketing

measures and techniques Citifinancial works on different

parameters of marketing which include,

1) Creative :This part includes Idea generation

2) Account handling. :Associated cost that include

operative administrative and marketing costs

3) Management : Management of the resources to the

best possible use .

4) Promotion: Providing promotion techniques and

guidance for the branches to increase their

productivity.

The product has to be promoted positively .By that we

means there should not be any negative effects of the

promotion on the product or the company. During the

promotion only those parts of the product should be high

lightened that entice the customer to buy the product and at

the same time they do not hinder the customer’s will to buy

the product. Any type of the promotion is not done which

just makes the product more attractive but is not included



in the product .This will degrade the goodwill of the

company in the masses at large.

The Citi financial does micro marketing .The Macro

marketing is done by the Citi Group e.g the Ad of the ONE

CITI on the television .The different branches have their

own requirement of the promotion and they ask for the

required help from the company .

The Micro marketing includes budget analysis and is

primarily Product specific.

The marketing includes

1) Loan Melas

2) Pamphlet distribution

3) Mobile wan activity

4) Strategic Alliances

1) Loan Mitras.

2) Griahlakshmi

3) Alliances with Vishal Mega Mart., Subhiksha

etc.

Budget Analysis

Marketing head is asked by the BM’s to do branding

for their branch.



Then it depends on the priority and the budget for that

month how it will be allocated to various branches . If some

branches are already doing good then the micro marketing

and small scale promotion does not show results with

respect to the inputs given .So it makes sense to use these

measures to be applied on the new branches and the ones

that are not doing well. Though there is some requirement

of some marketing in all the branches all the time.

The marketing budget is usually made on a quarterly

basis or half yearly and may be yearly based .Marketing

budget is properly mooted upon to get the desired results.

Usually it is less than 25 lacs. The allocation of this budget

is primarily don on the performance basis and on the branch

profitability report of the branches.

Branding :

The branding particularly includes the parameters of

market visibility.

It includes

Banner’s

Hoardings

Road shows

Model THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


Each branch has a Network model . Every branch bears its

own cost of marketing .Every branch estimates its own

marketing requirements and forwards the proposal to

marketing head ,who then does the budget analysis of his

resources and then guides and provides the necessary help

for the marketing, branding and promotion of the

branch.The branch manager then sends the month end

reports .

Month end reports :

Branch profitability report has to be generated at the

end of every month.It includes sales .The cost of

acquisitions

Break even of a new branch

Each and every branch has to achieve a break even within

a period of six months .During this period the bank has to

increase the sales to an extent it covers all the expense in

the last six months. When the profitability reaches the break

even point the report has to be generated.


BRANCH


Branch network model

MARKETING METHODOLOGY


HEAD

BRANCH

BRANCH

BRANCH


Citi Financial advertises in order to market its loans. It

exploits various sources channels for this purpose. This is

done in the following ways -

Press ads

Outdoor media and signage

Micromarketing

SMS (mobilink)

Mobiloans

Referral channel

Branch campaigns

An effective sourcing channel employed by Citi

Financial is press ads. The approach of these ads is direct

and to the point. It clearly states the documentation

requirements and a point of contact is given to capture

feedback.

Outdoor media activity involves putting up of

signboards in different parts of the city. The essentiality of

such a program is to create awareness among the masses.

Visibility of such signboards must be ensured.

Micromarketing implements one to one strategies

based on customer needs. It describes the activities that the



company takes up to create awareness about the various

services being offered. This includes road shows and events,

pamphlet distribution, celebrating local festivals, etc.

Micromarketing contributes for approximately 60% of lead

generation.

SMS is another upcoming tool being excessively used

for marketing activities. It is cost effective and invites

instant response.

For example, on 07.07.2006, a sms was sent on all Airtel

numbers. The sms read, “You can get Cash Loans upto Rs.

50,000 from Citi Financial. Call today between 8 am to 8

pm.”

Mobiloans implies mobile marketing. This is done by

means of engaging a van with posters. This helps solicit

loans by providing a visual aid. Leads collected in this way,

can later be disbursed at the branch office.

There are specialized methods by which new and

existing borrowers are targeted. These methods are

enumerated below:

NEW BORROWERS:

ADVERTISEMENTS



DIRECT MAILERS FROM ACQUIRED DATA BASES

Credit card data bases

Mobile phone data bases

Other acquired data bases

DIRECT SELLING AGENTS

MEMBER REFERRAL PROGRAM

BRANCH WALK-IN

INTERNET LEADS

FINANCE PARTNERS

EXISTING BORROWERS:

DIRECT MAILERS

Nine months on books

No EMI bounce in last 3 months

Never beyond bucket 2

TELECALLING

By in-house telecalling team

Call on newly-eligible customers as well as

customers who have not responded

EB WALK IN

DST

SOURCING ESSENTIALS:



Sourcing refers to the what, where and how of

targeting the customers as per the marketing plan of the

organization. The rudimentary principle of effective

sourcing is team building and maintenance. Team building

refers to the process of establishing and developing a

greater sense of collaboration and trust among team

members. Team maintenance includes enhancement of

motivation among team members.

INGREDIENTS OF TEAM BUILDING &

MAINTENANCE:

The process begins with careful selection of sales

executives

The next step is communicating the vision, mission,

goals and objectives of the organization to the new

recruits

After that, the work load must be distributed and team

members must be allocated their respective roles

within the team.

A comprehensive training on how to work together and

perform as a team to turn individual accomplishments

towards organizational achievements.



STRATEGIES - CITIFINANCIAL Vs COMPETITORS

Particulars CITI Financial

ICICI Bank SBI GE Money

Loan amount 15,000 to 5lakh

20,000 to 15 lakh

24,000 to 5 lakh

10,000 to 75,000

Age limit 21-50 25-58 (salaried)25-65(self employed)

21 - 60 21 - 55

Repayment tenure 2 – 4 yrs 1 – 5 yrs upto 4 yrs

1 – 3 yrs

Rate of interest 12% - 26% 23% for salaried

26% for self

12% - 14%

15% - 36%



employedMode of EMI calculation

Monthly reducing

Monthly reducing

Daily reducing

Monthly reducing

Processing Fee NIL 2.2% 2% 300Bouncing charges 220 220 2% of

debt amount

300

Documentation Basic doc Basic doc Detailed doc

Basic doc

Market penetration in ludhiana

High Medium Medium Low

Customer profile Salaried as well as self employed

Salaried as well as self employed

Govt. employ-ees only

Salaried as well as

self employe

dMarket penetration in ludhiana

High Medium Medium Low

Customer profile Salaried as well as self employed

Salaried as well as self employed

Govt. employ-ees only

Salaried as well as

self employe

d

LOAN MITRA

OVERVIEW

The LOAN MITRA channel is a direct distribution

channel comprising primarily of enterprising work-



from shop men/women. It builds on the neighborhood

lending concept, which forms the soul of the

Citifinancial Branch network Model

Apart from Loan Mitra there are other Strategic

partners of citi financial .they are

GraihLakshmi

Vishal Mega Mart ,Bigbazar Ebony tie ups

Micro marketing

Canopies

Loan mela

Pamphlet distribution

Fleet on street.

APPOINTMENT OF THE LOAN MITRA

Every branch identifies one CRM (Customer

relationship Officer)who will be responsible for the channel.

This person is called the LM-CRM for the branch.

The LM-CRM identifies shops to be targeted in the

vicinity of the branch. These are the shops that sell



groceries, medicines, hardware, utensils etc that are used

by the households on the daily basis.

Proper care is taken ,so that the shops that deal in Pre-

paid cards, photo copying services, STD booths and so on

are completely avoided.

Prospective Loan Mitras (LMs) are invited for the

presentation at the branch or appropriate location

accompanied formal interaction over snacks/tea etc. This is

the best way to get the undivided attention of the

shopkeeper. Trying to teach the concept at the shop while

he is attending to customers can turn out to be

unproductive.

Each branch targetsaround 20 -30 LMs to start with.

Out of which typically 15 or so will be active at any point of

time. This number will go up as the branch becomes

proficient at managing the channel.

After the initial meeting with the LMs, the branch has to

complete the signup formalities with the LMs who are

interested, is involves CPV(Customer point verification)

TVR(Telephonic verification) and signing of the agreement.



Process

LM has his own contacts ,footfall in his shop and friends

that can provide leads to him .He generates the trust and

interest in PL and call up and login the lead. Branch Docs

collection Boy collects docs +application form and logs into

the branch. He also can collect the Documents from the

Client and can further pass the file to the branch or can give

the file to the canvasser.

Credit Appraisal takes place and the customer is called in as

per regular process.

LM is kept in loop about status of the file. This is important

as this will keep him interested about the work and also

will make him learn the process and then he will eventually

be able to provide some better leads .He will eventually be

able to gather all the documents from the clients ,thus

reducing the time of the process and also it will become

cost effective eventually.

Once disbursed-monthly payout given as per slab. The

appraisal of the LM is done every month. Proper care has to

be taken so that the compensation paid to them is received

by them in proper time.



LOAN MITRA TIE UP PROCESS


BM IDENTIFIES CRM

CRM IDENTIFIES POTENTIAL LM LEADERS

INTERESTED DEALER FILLS UP APPLICATION FORM

REF# GENERATED AND DEDUPE CHECKED

OFFICE CVP INITIATED



SITE VISITATION REPORT SVR PREPARED BY CRM

SVR IS FILLED UP BY CRM CAPTURING INFO AS MENTIONED IN THE FORM.THIS SVR IS SIGNED BY THE BRANCH CRM AND BM

IF OFFICE CPV AND SVR ARE POSITIVE AND NO NEGATIVE DEDUPE CATCH…….THEN…….

AGREEMENT SIGNING PROCESS IS INITIATED

AFTER ALL THE FORMALITIES ARE DONE,THE BRANCH COMPILES ALL THE DOCUMENTS ….APPLICATION FORMOFFICE CPV REPORTSVRDEDUPE PRINTOUTXEROX OF APPOINTMENT LETTERORIGINAL OF AGREEMENT


SIGNING UP PROCESS CONSISTS OF TWO PARTS

APPOINTMENT LETTER

This is given to the dealer as a confirmation of the deal.

It is in a fixed format..

This includes details of dealer payouts. Payouts should be

clearly mentioned on the appointment letter.

Dealer payout includes Partnership allowance which goes as

a fixed component to the dealer and variable for which

payment is made on the no of cases disbursed.

Appointment letter is single page on DSA pre signed letter

head (original).


AGREEMENT SIGNING PROCESS IS INITIATED

THIS FILE IS THEN SENT TO BACK OFFICE (ALLIANCES) ALONG WITH THE LM MASTER (SOFTCOPY) FOR OFFICIAL USAGE. POST UPDATION OF DETAILS AND DOCUMENTATION CHECK DONE BY THE CENTRAL TEAM(ALLIANCES),THE RECORDS ARE UPDATED AND FINALLY THE FILES ARE SENT TO RESPECTIVE DSA’S FOR RECORD KEEPING.


The top of the appointment letter should clearly indicate

dealers name and shop address.

This letter has to be signed by the Dealer(with whom the

LM tie up is done),dealer stamp along with signature can

also be taken(if dealer has a stamp).Since the appointment

letter is pre signed by the DSA owner so finally it has the

DSA head and the dealer signatures on it.

The original appointment letter and the Xerox copy of the

same is taken.

AGREEMENT:-

The first page of the agreement has to be oon the original

letter head of the DSA.

It has a fixed format.

The rest of the pages of the agreement can be on A-4 size

paper.

First page of the agreement should clearly mention-Dealer

name ,shop name, branch name and the sign up date.



Last page of this agreement is pre signed by the DSA head,

It is mandatory to take dealers signature, Citifinancial

employee signatures as confirming party and 2 witnesses .

The original of the agreement retains with us.

HOW DOES IT WORK


Loan Mitra generates contacts

CONTACTS

FRIENDS

INTEREST IN PERSONAL LOAN

GENERATED

CUSTOMER NAME & No LOGGED IN AS A LEAD

DOCS BOY PICKS UP DOCUMENTS



CUSTOMERS

BRANCH LOGINS CASE

CREDIT APPRAISAL DONE

LM EARNS PER MONTHDISBURSAL

DSA ,Mails,Walkin,Tele Caller’s

Application

Form + Documentation

Initial Screening

+ve

Data Entry Dedupe Rejected

N

Y

+ve

N

REJECT

Dedupe check

+ External Credit

Check

Data Entry +Ref No Generation

CREDIT PROCESS (NEW BORROWER PROGRAME PROCEDURE)


CREDIT PROCESS (EXISTING BORROWER--PL)


Y

CPV INITIATION +v

eREJECT

TVR INITIATION+ve

REJECT

N

Y

CREDITDECISSIO

N+ve

Y

N

REJECT

PERSONAL DISCUSSION AND ORIGINAL DOX VERIFICATION+v

e

+ve

BUDGET ANALYSIS

REJECT

REJECT

FINAL APPROVAL

N

Y

N

Y

N

Y

Eligible Database procured/Received


PROCESS FLOW


Contact Established with the customer through Telecalling

For interested Customers credit Checks Initiated (TVR , DEdupe,CPV, for fast tracks/address change cases)

On positive credit check customer asked to walk into the nearest branch

New Application Form and Loan Aggrement Singned By The Customer

PDC’s Collected along with other relevant documents if any (e.g. new address proof in case of change of address)

Documents reviewed by personal loan officer

Documents are rechecked by CPA

Disbursal cheque is handed over to the customer



Application is logged in and the system generates a reference no for loan

Soft approval of the loan reference no on system by credit

FEWS performs trigger based validation checks

Trigger Match Found

The loan is forwarded to the edit mode/ data entry mode for further processing

A

A

YES



SYSTEM GENERATES A

FRAUD DEVIATION IN THE QUEUE

SAMPLING PROCESS

FCU USER APPROVES/DECLINES/CANCELS HE FRAUD

CHECK REQUEST

THE LOAN ISFORWARDED TO THE EDIT MODE/DATA ENTRY MODE FOR FURTHER PROCESSING

SYSTEM GENERATES A FRAUD DEVIATION IN THE QUEUE

CANCELED

APPROVED

APPROVED

THE LOAN IS FORWARDED TO THE CREDIT MODE/ DATA ENTRY MODE FOR FURTHER PROCESSING


CREDIT PROCESS

The credit process starts when the application form is filled . Then the data entry is done in the system known as logging in and it thus generates the reference number for the case.After this the Deduplication checks and External Credit check is done .Deduplication is done to know the SDN status of the borrower as well as his credit records with other banks againstdedupe data base to ensure credit worthy lending and avoid over exposure. Even 30% of the total cases are cross checked by Fraud Check Unit .if the borrower is found to be genuine it leads to CPV initiation (waived off in cases of existing borrower) along with TVR (Telephonic verification).

CPV (Contact Point Verification)Visits to the customer’s residence/office to assess credit worthiness of applicant.Useful in absence of Credit Bureau.Establishes bonafied of customer as per application form.It is the first point of contact with the customer and CCFIL

TVR Telephonic Verification

Helps to get comprehensive information on applicants residence and office profile

Checks on assets and liabilitiesCheck on ease of contactability.

The motto for field verification by CCFIL is“Verification is what you see with your eyes and what you judge. It is not what you hear, imagine or assume ,after all it is your money “

If the field investigation is found to be positive the documentation is done for the case it includes checking of THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


all the documents provided by the borrower and simultaneously filling of the pre-disbursal documents like aggrement, PDC’s,etc.

CREDIT DEISSION: it includes cross checks

Correlate information on the documents with application form,phone verification and field verification.Check for consistency of the customer.Check for frauds.Additional source of income and proof of the same.Aceptance of non standard documents ( Depends on CPV,TVR,Profil and validity of the same) with relevant sign off.

Deviations/Exceptions

Anything outside the terms and conditions defined in the product program.Deviation matrix is approved by Citi Group credit director.Matrix states minimum authority level which can approve each exception / deviationDeviations can be credit deviations, documents deviations, or pricing deviations

Debt burdenDefined as the ratio of fixed monthly obligations/net disposable verifiable monthly income.For PL it is defined as -- all unsecured loans EMI/monthly declared incomeFor new borrowers Debt burden ratio is capped at 70%.



PRICING OF LOAN

The customer of CCFIL have higher risks this implies higher chances of non payment ,higher collection costs, need for higher verification in absence of sufficient credit history and zero collateral. Therefore the higher interest rates are linked to higher level of risk.

BUDGET ANALYSIS

It is prepared to assess the income of the customer on cash flow basis to arrive at the affordable instalment. The BA process is as follows.

Incomes from pay slip. Additional income stated by customer maybe written

but should not be combined unless it is documented and verified.

Clubbing of income happens for blood relatives. Focus largely on expenses. On each expense check whether the figures stated by

the applicant matches with the family size and market average.

If a particular expense seems to be too high or too low, get clarification from the applicant.

Where the income is clubbed, liabilities have to be clubbed.

This helps to provide insight into lifestyle of the applicant.

LOAN CLOSING AND CUSTOMER EDUCATION

When the interview is over the credit decision is taken.

Arrive at the final loan amount.Explain the loan terms to the customer and final completion of the document takes place.



Counsel customer on repayment and strengthen relationshipDisburse cheque and see off the customer.

COLLECTIONSSince the personal loan product is unsecured it is tougher to collect on the presentation dates for the cheque are cycle based.5-19 of every month (cycle 05) and from 20th to 4th (cycle 20) . In case of first PDC bounce the customer is called and sent a letter, on the second bounce the same process is repeated ,but in the case of the third bounce the action for collecting EMI and principal interest is taken. The collection process can be divided into two stages.Soft Collections: During Tele calling ,field visits.Hard Collections: Field Visits, legal action, and police action

WHY DO THEY JOIN?

The main reason that this channel seems lucrative to the

shopkeepers is the payout as it turns out to be an additional

income .This income they can further utilize to increase

their business. Mostly young proprietors are eyed as they

know a lot of people travel a lot for their business and are

always ready to earn an extra buck..



Main reasons for them to join are :

Part time job

Loan mitra provides them with sufficient marketing

material to start with without any investment ,as they keep

on earning ,the more they will get interested .With time

they know that they will be able to gain more links and

these links will provide them with more and more business.

Ease of Working :

The Loan Mitra is able to work at his ease .The concept

works in parallel with his main business. He/She can devote

time to the customers when he wants to. He is able to work

on free hour basis ,he can increase contact and his visibility

in the market when ever he feels so.

Association With a Big Brand:

The Brand sells on its own .The shopkeepers know the

product and the company that is offering the product The

trust between the company and the LM need not to be

taken care of . The LM understands that he will be provided

compensation for the business he is giving.

Target :



The Loan mitra does not have to chase a target every

month .He is not under any pressure to get certain files per

month .he can take his own time to settle in his new work.

What do They Earn :

The amount of the money that is associated with a

disbursed file is around

Rs500. But an amount of Rs 500 is also associated with the

canvasser.

Also Rs 600 per file will be given to the LM if he is

disbursing more than four files per month.

So the COA per file disbursed is Rs 1100.

STRUCTURE AND RESPONSIBILITIES

BRANCH MANAGER

PLO DESIGNATED POINT OF CONTACT FOR THE LM

CHANNEL

--Responsible for the recruitment of the new LM’s and

maintaining relationship with old ones.

Officer should handel 15-20 active LM’s



-manages the file from the login onwards, interfaces with

LM on case feedback

VENDOR FOR PAYPOUT MANAGEMENT

>> The BM will be responsible for direct interaction with

the vendor. S/He will distribute the payments to the LM’S.

>>Takes proper care that the LM are motivated to work

and helps the canvasser to properly interact with the LM’s.

>> Gives proper training to the new canvassers and

provides information regarding any queries of the LM’s and

the clients

PITFALLS TO LOOK OUT FOR

>>BROKER INVOLVEMENT WITH LM’S.

>>PERSONAL LOANS DSA OWNER /TEAM LEADER/EXECUTIVEWIVES AND RELATIVES NOT TO BE A PART OF LM CHANNEL

>>PAYOUT TO HBD’S SHOUL NOT BE HIGHER THAN PAYOUT TO DSA IN THE LOCATION ON A VARIABLE BASIS –OTHERWISE CASES WILL GET DIVERTED TO HBD.

Recruitment channels>>Branch reception distributes handbills on recruitment.>>Handbills kept at various LM Strategic alliances counters.



>>Beauty parlors,VLCC,Middle class jewelry shops are given fliers>>Canopies outside high footfall areas—like schools>>Book booths/spacesin womens festivals—mahila sammilani,ladies club etc can also be targeted as there is a high level of footfall>>reference program

MARKETTING SUPORT This is to be given to productive LM’s>>Individual pamphlet support>>Banners should be provided so that there shops are easily recognized as LM shops.>> The number of pamphlets given should be checked ,whether they are enough or not .>>Any assistance needed, so that there name and number is advertised in the adjoining market places should be provided.

CHANNEL DRIVERS

1>>Relation management and CRM involvement Right hiring, Retention, moving the needle on productivity2>>Should keep a look on each of the following ____lead generation to Docs Collection ____Lead to file login ____Feedback on status of file ____Daily Status Updates from branch Point of Contact to Location Central teams

MIS and TRACKERS

Daily lead trackerDaily login trackerDisbursal TrackerApplication form filled with Bank A/c details & dedupe check



ID ProofProof of residencePassport Size photoResume if anyCode of Conduct

Processing payouts(can be modified locally)>>CRM to make amount of payout to LM’s after month end. BM to approve.

CROSS SELLING

CROSS SELLINGS:

Citi Financial has a tie-up with TATA AIG for insurance. Life insurance as well as insurance on personal loan amount is offered.

Credit shield is used to cover assets or loans funded by banks or financial institutions. This enables the insurance company to provide cover to the policy holder. The shield ensures payment of the outstanding amount to the financial institution in the event of demise or disability of the borrower.

Max New york Life has also tied up with Citifinancial.



PREREQUISITES FOR A GOOD LM’s IN MAKING NEW

CUSTOMERS

I. LM’s must have good hold on local language to attract

local shopkeeper.

II. LM’s must have good communication skills i.e. he must

ensure that the customer is under stand message in the

same sense as he is trying to convey.

III. LM’s must have knowledge of the market,

IV. LM’s needs to be having knowledge of current schemes

of his company and also of competitors companies. And

he needs to have an art of showing his own product

better than the competitors’ product.



V. LM’s ahead show patience while interacting with

customer, he need to listen the quarries of the customer

and answers them smartly.

VI. LM’s has to play the role of the motivator. He needs to

motivate the new entrant. And make customer sure

about future services.

VII. LM’s need to inform middle management about the

market Trends and customers demand.

How LM’s should be handeled

LM is a shopkeeper selling Citifinancial products and

services. These are very shrewd kind of personalities they

always try to get earn maximum margin. Right the time of

induction they ask for Margins Company need to have very

carefully as this shopkeeper can safe the competitor’s

product for the sale of his own margin. Company need to

take care of the margin of these retailers and provide them

claim at the right time as the negative word of mouth from

these shopkeeper can give had have to the company.

(7) Customer demand:- The most important role is played

by the customer. If customer demands from the Citifinancial

then LM’s will be benefited and new shopkeeper will show

their interest in the business

Customers can divided into two groups.



1. Exciting Customers:- Existing customer act as brand a

ambassador for the company and satisfied customer

can help the company to increase its business. A

company should be wise to measure customer

satisfaction regularly because one key to customer

retention is customer satisfaction. A highly satisfied

customer generally stays loyal longer, buys more and

talks favorably about the company and its services,

pays less attention to competing brands and is less

sensitive to price. Company can hold surveys to

measure the satisfaction level of the customers.

According to Frederick Reich held, a customer

willingness to recommend to a friend results from how

well the customer is treated by front line employees,

which in turn is determined by all the functional areas

that contribute to a customer experience.

A highly satisfied customer is very likely to repurchase

and even spread good word of mouth about the

company. High satisfaction or delight creates an

emotional bond with the brand or company, not just a

rational preference. Managers themselves can enter

company and competitor sales salutations where they

are unknown and experience first hand treatment they

receive .Manager should question LM’s and handle

complaints .So customer satisfactions need to be both



a goal and a material to of for the company. For the

satisfactions of the customer, marketers can do the

following:-

1. They bear the major responsibility for correctly

identifying the customer’s need and requirements.

2. They must communicate the properly to top

management.

3. They make sure that customer’s orders are filled

correctly and on line.

4. They must check that customer’s have received proper

instruction and technical assistance in the use of the

product.

5. They must stay in touch with customer after the sale to

ensure that they are satisfied and remain satisfied.

6. They must gather customer ideas for products and

services improvement and convey then to the top

management.

When marketers do all this they are making substantial

contribution to customer satisfaction as well as to customer

and company profitability.

(B) Prospective Customer:- Company need to attract new

subscribers for its expansion. Company can acquire new

customers by:



I. Identifying the life style of a particular target market.

II. Increasing awareness of company or product name.

III. Expressing commitment to the community or on social

issues

IV. By advertisement.

V. Making sure that company product and services must

be present where competitors product is available and

also where not.

LEARNINGS FROM THE PROJECT

IMPORTANCE OF PLANNING:

At Citi Financial, every PL team is given a target to

achieve. This may include J, J plus and/ or ultima. In order

to achieve their assigned targets, teams need to plan

strategically. Successful goal achievement requires creation

and communication of value to the customer. The teams

need to plan activities in order to communicate various

attributes of the loans. To ensure these activities are well

selected and executed, strategic planning is paramount.

The choice of activities and areas to perform them should



be determined at the beginning of the month and sales

executives must be given daily, weekly or monthly targets.

These executives must be monitored and motivated

regularly.

TARGET ACHIEVEMENT:

Every team is given a certain target for J, J plus and/ or

ultima. Citi Financial markets 60 percent of its loans

through micromarketing activities. Teams need to strategize

their activities in order to meet these goals. After strategic

planning, the next stage is the implementation. The

implementation is of paramount importance. In absence of

implementation and co-ordination, the best of plans would

fail.

TEAM WORK :

Team work is the secret behind the success of any

team. In order to promote team work, the management

needs to create a sense of belongingness and trust among

the employees and executives. They must be motivated by

positive or negative approach, bearing in mind individual

differences in the work force.

An aspect which needs regular attention is conflict.

Since individuals of different personality traits, lifestyles

and values come to work together as a team, conflicts are



bound to arise. Conflict is not entirely negative; it may bring

forth some healthy suggestions too. However, beyond a

certain limit, conflict affects organizational working

adversely. Team leaders regularly need to check such

divergences in the teams.

METHODS OF ADVERTISING:

I also learnt the various methods of marketing loans.

We had an opportunity to gain a first hand experience in

many micromarketing activities. This included organizing

several events in residential complexes, market places and

offices. We also learnt the importance of co-ordination while

performing these activities. Many times this involved

synchronization with HR managers of offices where

activities were planned.

TEAM MANAGEMENT

I was assigned a team ,and I was responsible for the efficien

working of the team and it always seemed a good

opportunity to learn how to manage teams .The team

comprised a heterogeneous type of people and getting

things done from them was a difficult task.

UNDERSTANDING STRATEGIES



I was working for different strategic alliances of the

company and why and how these strategies are made and

why they work was a great learning .Sales is not efficient

when proper intelligence is applied to it ,this intelligent

sales is the marketing for that company.

TIME CONSTRAINT

Time is of utmost importance in an organization .The time

for the initiative and the completion of the work has to be

planned and has to be completed before time otherwise

there can be a lot of problems not for ones own self but it

will create delay in the work of others. So proper check has

to be made that my work is not interfering with others

work.



PROCESSES LEARNT DURING THE TRAINING

SOURCINGSourcing is a term used synonymsly with procurement.

It refers to the what, where and how of targeting the customers as per the marketing plan of the organization. In the context of Citi Financial, it is the process of locating potential customers for personal loans, two-wheeler and consumer durable loans. This can be accomplished by single, dual or multiple sourcing. There are various distribution channels that are utilized to accomplish this. Citifinancial capitalizes on its Direct Sales Teams (DST), Direct Sales Associates (DSA), Finance Partners (FP), Loan Mitra Dealers, telecallers, etc.

WORK OF DST’S

DST is the direct sales team which comprises of sales

executives.

DSA are the direct sales associates. They further employ

various sales executives to accomplish the targets given to

them in return for a pre-determined consideration. Finance

Partners and Loan Mitra Dealers also log in customer

applications for loans. They locate potential customers



using their own existing consumer base. They have no fixed

targets to achieve and are paid a pre-determined

consideration per loan disbursed through them. Another

upcoming channel is internet. Applicants can apply online

for personal loans.

COLD CALLING

These executives find target customers by cold calling

and other promotional activities. Cold calling is the

processing of approaching prospective clients, typically via

personal meeting or telephone, who have not agreed to such

an interaction. It is very essential to focus on the goal

during the process of cold calling. It is not about making the

sale but getting a chance to make the sale. The process

continues till the lead turns hot and finally gets converted.

Cold calling is a form of P2P marketing. It requires

one-to-one physical presence or telepresence. The most

essential detail of cold calling is to target the right

audience.

ALIANCES : I worked and understood the working of

the tie-up’s that are made ,like that of the Vishal



Mega Mart.Proceses were initiated for the tie-up’s

with the Subhiksha and Amway.

In case of the Grih lakshmi tieups were made with the

leading beauty parlors like the AVON and ORIFLAME

in the sarabha nagar.

TOWS ANALYSIS OF CITIFINANCIAL:

THREATS

Possibility of competition in the present target segment of Citifinancial

New competition moving in Spread compression competiton/ irrational pricing Interest rate cap may be introduced by the government Regulation of branch expansion by RBI The biggest threat to the position of City Financial is

from new competition moving in. THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


There is a possibility of other banks and financial institutions targeting the same TG.

There may be a regulation of branch expansion by RBI.

WEAKNESS

Low visibility of brand

The foremost weakness lies in high rate of interest. The customers are charged a rate of interest in the range 12% to 36% and consequently higher risk customer profile

Another weakness is the low ticket size. Which is recently been overcome.

OPPORTUNITIES

Large untapped geography

Regular growth in the sales finance database continuing to offer cross sell opportunities



The greatest opportunity lies in the target segment, of lower middle class, which is a fast growing market.

Unprecedented growth in sales finance.

Great opportunities to offer cross sell opportunities.

In India, there are only a few other financial institutions that tap the under banked segment. This offers the advantage of a large untapped geography.

City Financial can capitalize on its brand name and goodwill to attract new customers.

STRENGTHS

Unique segmentation Risk spread over small loans High entry barrier Easy documentation and quick turnaround. Customer service with a personal touch. Flexibility- unique options to specific customer

segments offering risk adjusted pricing. Loan credit shield option. Team spirit in self contained PL teams. The foremost strength of City Financial lies in its

unique segmentation. It targets the under serviced and under banked segments that essentially focus on clerical staff in Government organizations and self employed businessmen running small businesses. It aims at selling loans to applicants who do not have too many finance options.

City Financial offers small tickets size loans. This spreads risk over small loans.

Loans are offered within 48 hours. The turnaround time is very quick.



Loans are offered to applicants on the basis of very easy documentation.

City Financial offers flexibility to its customers. Depending upon the documentation, the pricing is adjusted.

Customers are treated with quality service. The aim is to achieve customer delight and satiate customer’s financial needs.

As an extension to loans, City Financial also provides a credit shield to the customers on the loan amount. A credit shield ensures payment of the outstanding amount to the financial institution in the event of demise or disability of the borrower.

Another great strength lies in the team spirit of the PL teams. This keeps all the team mates motivated and facilitates fulfillment of targets.

The branch expansion can be justified by procuring

sufficient business or tapping new profile of customers and

competition can be met by strengthening marketing

operations and better customer services. There is a need to

build brand name as it is still low as compared to ICICI

Bank Ltd. So in all to tap the opportunities more and more

marketing can be done and large untapped geography

specially the rural class of customers should be approached.

Also database should be updated regularly followed by tele-

callers



CONCLUSION

CONCLUSION:

Citi Financial is a brand under Citi Group’s umbrella. It

provides three broad products: Personal Loans, Home

Loans, and Loans to finance Two-Wheelers and Consumer

Durables. Other benefits offered to the customers are

insurance and credit shield to safeguard their family’s

interest in the event of death or disability.

In the two months of our training, we learnt about the

company policies, its mission and objectives. We also had a

firsthand opportunity to learn about the process, right from

attracting the right customer up to disbursal of the loan.

We had an opportunity to learn the various methods

that the company employs in order to create awareness

about its product and to deliver value to its customers. We

organized and co-ordinated several of these promotional

campaigns. This experience has emphasized to us the

importance of team work, planning and co-ordination.

The company pays special attention to the needs of its

existing customers. For an EB, a loan is just a phone call

away with the D2H facility.



City Financial has several strengths - a strong brand

name, an under serviced target segment, prompt services

and high penetration. The company must capitalize on these

strengths and cater to an ever-increasing need for finance

of the middle class.

DEFINITIONS:

LOAN TRANSACTIONS: The system under which the

money is advanced to the borrower for a pre-determined

period on pre-determined interest for any purpose. The loan

can be secured or unsecured against assets.

BRANCH: It means the branch of the bank at the place

mentioned in the Schedule and where the Home Loans are

disbursed and shall include any other branch where the

Home Loan account is maintained or transferred to any time

at the sole discretion of the bank.

BORROWER: It means and includes any person(s) to whom

CCFIL has agreed to grant the loan and has signed the

agreement.

EQUATED MONTHLY INSTALLMENT: It is the amount

payable every month by the Borrower to the bank



comprising of interest, or as the case may be, principle and

interest.

TENOR: This is the term used to represent the number of

years for which the loan is given. The loan amount gets

amortized over the period of the loan.

PERSONAL LOAN: Unsecured loan given to an individual

for any personal purpose like school fees, home

improvement, share purchase, vacation, business

expansion.

RBO: Stands for Refinance Balance Only. It is done if the

customer is unable to pay EMI amount in which the interest

component is waived off for missed payments and the Tenor

is extended accordingly.

FEWS: It means Fraud Early Warning System. It is done at

pre disbursal stage where validation checks on customer

details are done as soon as they are entered in the system

from application.

FREE LOOK PERIOD: Means the interest free period for 7

days from the date of issue of cheque by CCFIL towards the

loan wherein the borrower may withhold the cheque from

being deposited into the borrower’s bank account.



REFERENCES

About Citigroup http://www.citigroup.com/citigroup/corporate/history/citibank.htm

Corporate Values http://www.citigroup.com/citigroup/corporate/values/index.htm

Corporate Values http://www.citigroup.com/citigroup/corporate/values/index.htm THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU

http://www.citigroup.com/citigroup/corporate/values/index.htm




http://www.citigroup.com/citigroup/corporate/history/citibank.htm



Global Consumer Group Investor Presentation, May 29, 2003.

http://www.citigroup.com/citigroup/fin/data/p030529a.pdf (pg 28)

About Citigroup http://www.citigroup.com/citigroup/corporate/history/citibank.htm

Citigroup’s Product Lines http://www.citigroup.com/citigroup/about/productlines/retailbank.htm

Frei, Frances X. Economics of Retail Banking Note. President and Fellows of Harvard College, 2002.

REF 1 Citigroup 2003 Annual Report http://www.citigroup.com/citigroup/fin/data/ar031c_en.pdf

http://rbidocs.rbi.org.in/rdocs/Bulletin/DOCs/76701.doc

APPENDIX 1

HISTORY


http://www.citigroup.com/citigroup/fin/data/ar031c_en.pdf

http://www.citigroup.com/citigroup/about/productlines/retailbank.htm

http://www.citigroup.com/citigroup/about/productlines/retailbank.htm



http://www.citigroup.com/citigroup/fin/data/p030529a.pdf


1912: Founded by Alexander Duccan as commercial Credit-pioneer in the consumer finance industry.

1916: Company offered an installment loan program to help people purchase what was then an exiting new-invention- the automobile. This led to the development of installment buying plans for home appliances and other consumer goods.

1986: Under Stanford I Weill the company went public.

1988: Acquired Premerica Corporation- the parent company of several Investment, financial services and insurance firms, including the well known Smith Barney.

1992-93: Premerica purchased 100% of travelers and formed Travelers Group.

1998: Travelers merged with Citicorp to form Citigroup. Citigroup, a global financial services company is serving 20 million customers worldwide. Citigroup’s business includes asset management, banking, credit and charge cards, insurance, investments, investment banking and trading. In September, changed the name of CitiFinancial to proudly recognize the affiliation with the parent company and to better reflect what they do today. As a member of Citigroup, company continues to provide masses with a full range of exceptional products and services.

1999: Purchased 128 offices of Texas based Associates First Capital- Assets of $ 100 billion 2750 offices in U.S. in 13 countries.

2002: Acquisition of Golden State Bancorp, parent company of first Nationwide Mortgage and Cal Fed, second largest U.S. thrift. The Transaction enabled Citi Bank to expand its retail distribution franchise in key California and Nevada markets and add approximately 1.5 million new customers.



2004: In the first quarter announced the acquisition of Washington Mutual Finance Corporation for $ 1.25 B. the acquisition included 409 WMF offices

APPENDIX 2

Regulatory and Other Measures for NBFC

RBI/2006-2007/248 UBD (PCB) CO BPD Cir No: 28/13.01.000/2006-07 dated February 5, 2007

Chief Executive Officer of All Primary (Urban) Cooperative Banks

Interest Rates on Non-Resident (External) Rupee (NRE) Deposits -UCBs

Please refer to paragraph 86 of the Third Quarter Review of the Annual Policy Statement for the year 2006-07 dated January 31, 2007.

Interest Rate on Non-Resident (External) Rupee (NRE) Deposits

2. In this context, a reference is invited to our circular UBD (PCB) BPD Cir No: 48 / 13.01.000/2005-06 dated April 20, 2006 on the captioned subject. On a review, it has been decided that until further notice and with effect from close of business in India as on January 31, 2007, the interest rates on Non-Resident (External) Rupee (NRE) Term Deposits will be as under:

The interest rates on fresh NonResident (External) Rupee (NRE) Term Deposits for one to three years maturity should not exceed the LIBOR / SWAP rates, as on the last working day of the previous month, for US dollar of corresponding maturities plus 50 basis points (as against LIBOR / SWAP rates plus 100 basis points effective from close of business on April 18, 2006). The interest rates as determined above for three year deposits will also be applicable in case the maturity period exceeds three years. The changes in interest rates will also apply to NRE deposits renewed after their present maturity period.

3. In this connection, in keeping with the policy statement made vide paragraph 86 of the Third Review of the Annual Policy Statement for the year 2006-07 dated January 31, 2007, it is advised that UCBs are prohibited from granting fresh loans in excess of Rs 20.00 lakh against the NR(E)RA deposits, either to depositors or to third parties. UCBs are also advised not to undertake artificial slicing of the loan amount to circumvent the said ceiling.

4. A directive amending the earlier directive dated April 20, 2006 on the interest rate is annexed. All other terms and conditions applicable to NRI deposits remain unchanged. THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


UBD.No.Dir.1 /13.01.000/2006-07 dated February 5, 2007.

Interest Rate on Non-Resident (External) Rupee (NRE) Deposits

In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 (AACS) and in partial modification of directive UBD.No.Dir 2/13.01.00/05-06 dated 20.04.2006 on Interest Rates on Non Resident (external) Rupee (NRE) deposits, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby effects the under noted changes in the interest rates on NRE deposits.

“The interest rates on Non-Resident (External) Rupee (NRE) deposits for one to three years maturity contracted with effect from close of business in India on January 31, 2007 shall not exceed the LIBOR/ SWAP rates of the last working day of the previous month for US dollar of corresponding maturities plus 50 basis points. The interest rate as determined above shall also be applicable in case the maturity period exceeds three years. The above changes in interest rates will also apply to NRE term deposits renewed after their present maturity period”.RBI/2006-2007/261 UBD(PCB).Cir.No.30 / 09.11.600/06-07 dated February 19, 2007.

The Chief Executive Officers of All Primary (Urban) Co-operative Banks

Provisioning Requirement for Standard Assets-UCBs

Please refer to paragraph 84 of the Third Quarter Review of the Annual Statement on Monetary Policy for the year 2006-07 issued on January 31, 2007 (copy of the paragraph enclosed).

Standard Asset Provisions

2. In order to ensure that asset quality is maintained in the light of high credit growth, it was decided in respect of Unit banks and banks having multiple branches within a single district with deposit of Rs 100 crore and above and all other UCBs operating in more than one district, to increase the general provisioning requirement on standard advances in specific sectors, i.e., personal loans, loans and advances qualifying as capital market exposures and commercial real estate loans from the existing level of 0.40 per cent to 1.0 per cent vide circular UBD(PCB).Cir.No. 57/09.11.600/05-06 dated June 15, 2006.

3. The continued high credit growth in the real estate sector, personal loans, and loans and advances qualifying as capital market exposure and a higher default rate in regard to personal loans is a matter of concern to Reserve Bank. It has, therefore, been decided to increase the provisioning requirement in respect of the standard assets in the following categories of loans and advances from the present level of one per cent to two per cent with immediate effect:

(a) Personal loans;(b) Loans and advances qualifying as capital market exposure; and(c) Real estate loans (excluding residential housing loans). THE BUSINESS SCHOOL

UNIVERSITY OF JAMMU


As hitherto, the higher provisioning norm on standard asset will be applicable to Unit banks and banks having multiple branches within a single district with deposit of Rs 100 crore and above and all other UCBs operating in more than one district.

3. In order to ensure continued and adequate availability of credit to highly productive sectors of the economy, the provisioning requirement for all other loans and advances, which are standard assets, including those to agriculture, SMEs and industry in general shall remain unchanged. The standard asset provisioning requirements for categories of banks mentioned at para 2 above, after the above changes, are summarised below. As hitherto, these provisions would be eligible for inclusion in Tier II capital for capital adequacy purposes to the permitted extent.

Sr. No. Category of Standard asset

Rate of Provisionin

g(a) Direct advances to 0.25 %

agricultural and SME sectors

(b) Personal loans, Loans and 2.00 %advances qualifying ascapital market exposures,Commercial real estateloans and loans andadvances to systemicallyimportant NBFCs-ND.

(c) All other loans and advances

0.40%

not included in (a) and (b) above

5. It has also been decided to increase the provisioning requirement for loans and advances in the standard assets category to Non-Deposit Taking Systemically Important Non-Banking Finance Companies (NBFC- ND -SI) from 0.40 per cent at present to two per cent with immediate effect. In terms of paragraph 16(A)(i) of our circular DNBS.PD/ CC.No.86/ 03.02.089/ 2006-07 dated December 12, 2006, a Non-Deposit Taking NBFC with an asset size of Rs.100 crore or more as per the last audited balance sheet is considered as a NBFC-ND-SI. It has also been decided to increase the risk weight for all exposures to NBFC-ND-SI to 125 % from the present level of 100 % with immediate effect.RBI/2006-2007/300 REF.No.MPD.BC. 290/ 07.01.279/2006-07 dated March 30, 2007.All Scheduled Banks [excluding Regional Rural Banks (RRBs)] and Primary Dealers



Standing Liquidity Facilities for Banks and Primary Dealers

Please refer to Financial Markets Department Circular FMD. MOAG No. 14 / 01.01.01/ 2006-07 dated March 30, 2007 on Liquidity Adjustment Facility – Repo and Reverse Repo Rates.

4. The fixed repo rate under the LAF has been revised to 7.75 per cent with effect from March 31, 2007. Accordingly, the Standing Liquidity Facilities provided to Banks (export credit refinance) and Primary Dealers (PDs) (collateralised liquidity support) from the Reserve Bank would be available at the repo rate, i.e., at 7.75 per cent with effect from March 31, 2007.



APPENDIX 3

PRIVACY AT CITIFINANCIAL INDIA

Our goal is to maintain your trust and confidence when handling personal information about you.

YOU HAVE CHOICES:

As a CitiFinancial India customer, you have the opportunity to make choices about how personal information about you may be shared. As you consider this, we encourage you to make choices that enable us to provide you with quality products and services that help you meet your financial needs and objectives.

SECURITY OF PERSONAL INFORMATION:

The security of personal information about you is our priority.

We protect this information by maintaining physical, electronic, and procedural safeguards that meet applicable law. We train our employees in the proper handling of personal information. When we use other companies to provide services for us, we require them to protect the confidentiality of personal information they receive.
