Script HDFC'12

Slide-1/2:
Good morning, everyone, I’m Gairik Chakraborty and today I’m going to cover the topic of “Digital
Lending and accessing business loans through NBFC’s”
First of all, we are going to see the functions of RBI and its classification of Banks and how NBFC’s are
different from a bank. Then, we shift out attention to five NBFC’s proving business loans and are
most common in the industry – Lendingkart, ABC Finance, Bajaj Finserv, IIFL Finance and KreditBee.
Lastly, I’m going to end the discussion by focusing on why the NBFC’s are overtaking banks in the
digital lending arena.
Slide-3:
The Reserve Bank of India (RBI) is India’s central bank and supervisor of the Indian Banking system. It
controls the monetary policy concerning the national currency - Ensuring price stability in the
country considering the economic growth of the country, issues currency and maintains its value
with respect to foreign currencies, manages FOREX reserves, determines the comprehensive
parameters of banking operations.
Slide-4:
Scheduled banks: Banks which have deposits > INR 200 crore are ‘Scheduled Banks’
Non-scheduled banks: Banks which have deposits <= INR 200 crore are ‘Nonscheduled
Banks’.
On the basis of ownership:
Public sector banks: PSBs are those where the government holds a majority (>50%)
ownership.
Private Banks: Private banks, are banks owned by private (i.e., non-government) Indian
entities such as corporates and individuals.
Foreign Banks: Foreign Banks are those owned by multinational/non-Indian entities.
Regional Rural Banks: RRBs are also banks with a government ownership. The idea
was to create banks which will focus on the rural areas and serve the under banked sector. Eg. Bank
of Baroda, PNB
Co-operative banks are formed by a group of members. Traditionally the thrust of UCBs has been, to
mobilize savings from the middle and low-income urban groups and ensure credit to their members-
many of which belong to the weaker section. Eg. Abhyudaya Cooperative Bank
NBFC’s need to obtain a certificate from RBI and should have a NOF of 2 Crs. The NBFC’s that are
supervised by other regulators are not supervised by RBI to avoid redundancy.
Among this broad classification, our focus in on Loan Company: which means any company which is
a financial institution carrying on as its principal business the providing of finance whether by making
loans or advances.
The major difference between an NBFC and a Bank in this context is that it doesn’t hold a banking
license and cannot accept deposits from the customers, thus banks create credit and NBFC donot.
Slide-5:
First of all, we have LendingKart which provides unsecured business and MSME loans at zero hidden
charges, superfast process and convenience.
The various loan terms are mentioned here.
Slide-7:
Now, there are various eligibility criteria – business should be atleast 6 months old with a turnover of
90,000 in last 3 months and more.
Documents are industry standard and same across companies.
Slide-8:
Next, ABC Finance offers both long and short term, unsecured and secured loans.
Instant loan disbursal – 48-72 hrs and can be opted for flexible tenure of 12-36 months.
Cusomised lending based on criteria, quick turnaround time of a week, quick initial assessment.
Slide-10:
ABC Finance has come up with Udyog Plus to provide unsecured business loans with a maximum
loan amount of 10 lakhs. Apply online in just three simple steps. No need to wait for months or go
anywhere with instant loan disbursement.
Documents:
• Proof of identity and address| Aadhaar Card and PAN

• Proof of business| Valid business proofs
• Bank or GST statement| Bank Account statements of last 6 months or GST statements of last
2 years
Eligibility Criteria:
• Constitution Type: Self Employed Individuals, Proprietors

• Age21 – 65 yrs (at the time of loan maturity)
• Business Vintage1 year and above
• Business TurnoverMore than Rs.5 lakhs for the last 6 months
• Credit Score650 and above
e-NACH stands for Electronic National Automated Clearing House. It's a new and easier way to
automate and handle all recurring payments like telephone bills.
The Electronic Clearing Service (ECS) method of repayment is a popular way for borrowers to
automate their loan repayments. It's a convenient and efficient method that allows lenders to
collect payments directly from the borrower's bank account on predetermined dates.
Slide-11:
Next, we have Bajaj Finance providing business loans for building infrastructure, daily working
capitals.
High loan amount – 50 lakhs
Quick approvals – 48 hrs
No collateral
Minimal Paperwork
Flexi Hybrid Loan: This is exactly same as standard overdraft facility.
• Flexi Term Loan: Bajaj Finance offers term loans with flexible repayment options.
• Flexi Hybrid Loan: In such loans, the applicant pays only services the interest
component during the initial phase of the loan tenure following which the regular
EMI consisting of both interest and principal components are paid.
• Term Loan: These are regular loans wherein the loan amount is repaid in the form of
equated monthly instalments that includes both principal and interest. Applicants can
also prepay the loan amount before the end of loan tenure.
KreditBee:
These loans are meant for the upgradation of MSME’s – it provides collateral free funds, quick loans
disbursal, less paperworks and 24*7 customer service.
Conclusion:
Digital lending in India is at a revolutionary stage of growth, however, the unmet credit needs from
untapped segments continue to be huge. Thus, Digital lending in India is expected to become a $1.3
Tn market opportunity by 2030.
The share of digital lending to overall lending was 60.53% for NBFC’s as opposed to a smaller 5.53%
for the banks. (CAFRAL, 2020). The entry of Technology Service Providers (TSPs) into the financial
sector is creating a larger universe for the ecosystem.
1. Account Aggregator (AA) – AAs are RBI-licensed entities that facilitate structured financial data
sharing from FIPs (Financial Information Providers – IRDAI, PFRDA, and GST) to FIUs (Financial
Information Users – Banks and NBFCs). The number of accounts linked with AA has grown from
72,000 at the start of 2022 to 33,00,000 at the end of the year, this is 46 times jump in just a year as
per data from sahamati.org.in.
2. India Stack – It is a unified software platform that makes lending operations presence-less,
paperless, and cashless. The use of Aadhar for KYC, NPCI platform to transfer funds seamlessly are all
enablers for digital lending.
NBFCs are using micro services to authenticate and validate data shared by borrowers. For instance,
APIs (Application Programming Interface) call on NSDL for Pan Validation, CKYC for the borrowers and
the entity, video PD and ability to e-stamp and e-sign the loan documents. Payment Gateways –
electronic National Automated Clearing House (e-NACH), the Unified Payment Interface (UPI), and
the Immediate Payment Service (IMPS) developed under National Payments Corporation of India
(NPCI) facilitates a fast and portable fund transfer system.

Script HDFC'12

Uploaded by

Copyright:

Available Formats

Script HDFC'12

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Script HDFC'12

Uploaded by

Copyright:

Available Formats

Slide-1/2:

On the basis of ownership:

entities such as corporates and individuals.

Foreign Banks: Foreign Banks are those owned by multinational/non-Indian entities.

The various loan terms are mentioned here.

Documents are industry standard and same across companies.

• Proof of identity and address| Aadhaar Card and PAN

• Constitution Type: Self Employed Individuals, Proprietors

High loan amount – 50 lakhs

Quick approvals – 48 hrs

Flexi Hybrid Loan: This is exactly same as standard overdraft facility.

You might also like