IndusInd Bank, in operation since 1994, caters to the needs of both consumer and corporate customers through its technology platform that supports multi-channel delivery capabilities. IndusInd Bank has over 1,000 branches and more than 1,800 ATMs spread across 623 geographical locations in the country, with representative offices in London, Dubai and Abu Dhabi.
Mr. S.V. Parthasarathy , Head – Consumer Finance Division, Indusind Bank, shares details on the services & solutions offered by his company towards commercial vehicle financing.
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Indusind Bank’s Consumer Finance Division evolved from the erstwhile Ashok Leyland Finance (ALF) which was established in 1985. The company was into financing for heavy, medium and light commercial vehicles and cars. Construction equipment financing was started in 1995 and two-wheeler financing in 2000.
ALF merged with Indusind Bank in 2004. Small commercial vehicle funding was started in 2004 and tractor funding in 2014. The other products handled through the Consumer Finance Division include inventory funding and healthcare machinery funding. Thus, present in all the segments of vehicle and equipment finance, we fund the entire eco-system in the automobile and equipment industry.
Impact of demonetization
The difficulties caused by demonitization are already behind us. Recovery has improved with improvement in cashflow. We are seeing an increasing trend of electronic/non-cash payments from our customers which could reduce our cash handling costs. Though November and December 16 were bad as far as loan offtake is concerned, January onwards the demand has increased because of pre-buying in view of pan-India implementation of BS-IV. Q4 sales and finance is expected to be lot better month than Q3. Implementation of GST and scrappage policy on vintage vehicles will also help to have a positive impact on the CV sector.
Lending rate, disbursement details, incentives and special schemes
Lending rates have been falling in the last two years, particularly, with the implementation of the Marginal Cost of funds-based Lending Rate (MCLR) post April 2016 lending rates have come down drastically. CV loans are operating at rates between 9 per cent to 13 per cent on the new vehicles and 13 per cent to 17 per cent on the used vehicles. We have a monthly disbursement of about Rs. 900 crores on the new and used heavy, medium, light and small commercial vehicles segment. We also offer extra holiday period during off-season purchase, structured EMI matching the cash flow of the customer, funding on insurance, tyre funding, top ups for working capital requirements, etc.
Key USPs
Indusind Bank’s USP is the combination of a long-trusted brand with a wide network and a benchmarked turnaround time. We have been in the CV lending business for 3 decades and thus we have a huge customer base and long association with dealerships and manufacturers. Our associates see us as a long-term player. Unlike others who exit permanently or temporarily stop funding during a falling market, we continue to finance despite the cyclical swings in CV market. We have not stopped financing towards CV and CE at any point of time. Also, we have a good branch network which improves our customer reach. Today’s technology has given us various virtual communication platforms. Apart from using them we retain the human touch derived through direct dealings with customers, who like our offices, are open to walk-in anytime for a solution. Our branch managers are responsible for both the business and collections at their respective branches. This has resulted in better administration of credit and enabled a faster turnaround time in disbursement of loans.
Target customer profile
We give a considerable weightage to the field experience of the customer. A field experience of 3 years is considered good. His existing fleet, viable orders, past track record, references, and financials are evaluated. The assessment of the customer is through a combination of document and field investigation.
Supporting first-time users
Most of our FTU (first-time user) finance is through references from our trusted existing customer base. We insist on certain mitigates like experienced guarantors, additional down payment, property back-up and income from other sources.
Partnership with OEMs
As a long-standing player, we have tie-ups with all the OEMs in the CV space, including Ashok Leyland, Bajaj, Bharat Benz, Eicher Motors, Force Motors, Mahindra and Mahindra, and Tata Motors. Being a preferred financier help us better access to customers at various dealerships. We work closely with the dealers to provide seamless finance with minimum Turnaround time fitting individual requirement of the customers
Association with CV dealerships
We have a long-term and trusted association with dealerships. In most of the cases we have grown for decades together and thereby gaining each other’s trust. Most of the dealers gives first reference to us due to the excellent Turn Around Time (TAT) and utmost confidentiality in the lead given to us. Sometimes, the dealer employees would have access to more customer information than the financier. They share the same with our staff. This helps to make accurate assessment of the customers. Dealers also act as a bridge between the customer and the financier and facilitate closure of deals.