BC KGC Workflow
Case Study:
The Challenge: India is a largely agrarian economy, with about 52% of the population estimated to be directly or indirectly employed in agriculture and allied sectors. The growth potential in the rural market in India is a well-documented fact. RBI guidelines mandate that Commercial Banks have to offer 40% of their net credit to the priority sector, of which 18% needs to be extended as loans to the employment- intensive agricultural sector. However, most PSU banks are not able to meet the loan needs of the rural population. A leading private sector bank, with over 3300 branches, wanted to expand its banking footprint in the rural areas of India. The bank wanted to expand rapidly in remote locations in multiple states of India to source loans and liability accounts.
C-SPEED Solution: After considering several options, Centillion was chosen as the bank’s partner based on its pan-India presence, experienced CREs, experience in scaling up of operations and resources, and software technology expertise. Centillion quickly set up service points across many states in India, and provided adequate manpower and associated training in loan/CASA sourcing, banking practices, and other banking products. Centillion also provided supervisors to manage the field resources, leading to increased loan sourcing. In addition, Centillion provided the stakeholders with MIS and real-time reports on loan sanctions and disbursement, CASA sourcing, productivity, and Turn-Around-Time (TAT). Centillion was able to provide sufficient manpower and operational set up when the bank scaled up its operations. Centillion's IT platform, Krishidvar, which captures the farmer's details, was used for cross selling of the bank's other products.
The Benefits:
With Centillion's assistance, the bank has:
¬ Grown its overall KGC business by four folds in 3 years
¬ Maintained its rate of converting sourced loans to disbursements at around 90%-92 %Increased the average ticket size from about Rs. 4 lakhs to Rs.18 lakhs per loan file
¬ Reduced the cost of setting up and managing its infrastructure and manpower
¬ Reduced the lead time for recruitment and training of staff
¬ Reduced the lead time to set up new branches and ramp up operations
BCSP Workflow
Case Study:
The Challenge: Servicing rural areas is not viable using a conventional retail banking approach. A 2012 CGAP study revealed that average transactions per day for customer service points were about 25 per day in 2010. To increase this transaction rate banks need reliable local agents who can act as the banks agents. A large private sector bank in India opted to partner with Centillion to take care of their business correspondent services. The bank wanted to establish several service points in various states across India to enable customers to conduct cash transactions.
C-SPEED Solution: The BCSP model has helped banks cover more than 200,000 villages in just 8 years. Centillion set up service points in less than three months by utilizing its pan-India presence, and completed back-office operations in less than six months for effective monitoring and reconciliation. Centillion provided the required manpower and adequate training in cash transactions and cash reconciliation, thereby reducing the lead time in recruitment and training. Centillion also provided supervisors to manage the productivity of field resources, and provided the stakeholders with MIS and real-time reports on daily cash transaction and reconciliation, productivity, and Turn-Around-Time. Centillion's used its IT platform SPS to capture the customers’ daily cash transactions and conduct cash reconciliation and trend analysis. When the bank scaled up its operations, Centillion was also able to provide the required manpower and operational set up.
The Benefits:
Centillion has helped the partner to
¬ Perform daily reconciliation of cash balances with bank account statement
¬ Setup and manage the Service Points operation and helped it grow multi fold in just one and a half years.
¬ Reduce the cost of infrastructure set up and management and manpower hiring and training significantly
¬ Reduce the lead time for manpower recruitment and training substantially
¬ Most importantly, enable the bank to expand into unbanked areas and provide banking services to the rural population in quick time.
BC Enrolment Workflow
Case Study:
The Challenge: Since ensuring comprehensive physical presence with brick-and-mortar branches is difficult, banks have to explore other means of outreach to promote financial inclusion, such as business correspondents. Customer acquisition is a challenge in rural areas, and getting the KYC documents correctly filled and approved by the banks CPU could take several months. With strong marketing and aggressive interest rates, banks may receive a huge volume of applications, but if they cannot open and service accounts quickly they could suffer significant damage to their brand image. To avoid such adverse outcomes, a large financial organization partnered with Centillion to set up its BC enrolment services in several states.
C-SPEED Solution: Centillion was able to successfully set up operations within three months by providing the required KYC-trained manpower and operational setup in multiple states based on its pan-India presence. Centillion was also involved in acquisition of Savings Bank accounts of farmers associated with Agriculture Corporates in large numbers and within defined timelines as per the mutual understanding between Centillion and the organization. Centillion's operations included verification of the KYC and supporting documents for account opening through its document verification units. Centillion's governance model included regular report and meetings with the stakeholders and exchange of escalation matrix for escalation of operational and other issues. Centillion also offered the tools and technology for real-time reports to stakeholders for trend analysis and cross selling opportunities.
The Benefits:
With Centillion’s assistance the bank was able to
¬ Collect correct and complete AOF, KYC and supporting documents and get OSV seal on all documents in under a week
¬ Verify all documents in 3 to 4 days, through the DVU, before submission for account opening
¬ Open over 2 lakh liability accounts for farmers in just two years.
¬ Capture all accounts sourced at various locations and generate daily reports on productivity and TAT, through a web based tool provided by Centillion
¬ Reduce the cost of infrastructure set up and management and manpower hiring and training significantly
¬ Reduce the lead time for manpower recruitment and training substantially
KYC Audit Workflow
Case Study:
The Challenge:
Banking, non-banking, and financial organizations are required by law to establish well defined processes to meet KYC requirements. These institutions not only have to carry out KYC authentication, but also have to keep an auditable log of what identity information was checked, by whom, when the KYC check was done, and the results of the verification. Auditing the KYC documents poses a challenge as these institutions do not have the time, training, or bandwidth to undertake this exercise due to shrinking budgets and lack of KYC trained staff. A multi-crore NBFC tied up with Centillion to perform the KYC compliance audit for several of their products.
C-SPEED Solution:
Centillion’s KYC Audit platform provides an online tool for performing KYC audit through audit checklists and standardized codes for errors identification, and rectification and resolution of errors. The exceptions and responses are standardized and coded into the system to avoid ambiguity in publishing the audit reports, in providing analysis of audit observations, and in updating the resolutions. Centillion’s KYC Audit identified and tracked the gaps by way of determining the non-availability of an individual’s or entity’s identity proof, address proof, PAN card, and other supporting documents (including the photograph on specific instances). The MIS and real-time dashboards provided continuous visibility to management.
The Benefits:
Centillion’s KYC Audit helped the client
¬ Achieve regulatory compliance by ensuring customer accounts were KYC compliant and customer records were accurate and complete.
¬ Improve risk management practices
¬ Identify customers who were valuable for each branch/the bank, as well as customers who had zero transactions over an extended period.
¬ Reduce the operational risk associated with customers and facilitate compliance and protection against fraud
¬ Reduce cost by automating previously deployed manual efforts.
¬ Real time MIS and dashboards and customized reports on business done and productivity
Transaction Audit Workflow
Case Study:
The Challenge:
Many financial institutions undertake transactional audits to correct and eliminate what are incorrect or missing information and to also ensure that the company is not practicing any deception. Transactional audits are challenging due to deficient internal controls, use of inexperienced auditors to do the bulk of the audit, a focus on only larger transactions, or selection of sample data to test the transactions. All these challenges often come in the way of conducting effective transactional audits.
A multi-crore bank with close to 600 branches across India wanted Centillion to audit all of their daily transactions across all their branches.
C-SPEED Solution:
Centillion developed a dynamic risk-based plan by assessing changing levels of risk on an ongoing basis. Centillion also assessed the levels of compliance by performing detailed testing of controls, while supporting the scope and objectives of these transaction audits. Centillion’s Transaction Monitoring System (TMS) provided an Intranet- based solution to keep track of the transaction audit, the identified errors, and the reverts done with client for closure of error in database, from which users could spool MIS reports to publish to client.
The Benefits:
Centillion’s transaction audit helped the client to
¬ Carry out transaction audit by well-trained audit teams with a good understanding of the nature of the transactions being performed as well as key business information systems.
¬ Save several crores of rupees by identifying wrong accounts/amounts credited and debited, and multiple erroneous transactions performed with single cheque/voucher by a staff.
¬ Check potential fraud, waste, and abuse by identifying fraud risks.
¬ Online resolution and rectification of errors observed while auditing.
¬ Follow up with the bank’s branch for closure of errors.
¬ Real time MIS and dashboards and customized reports to required stakeholders on business done.
Hind Sighting Audit
Case Study:
The Challenge:
Hind Sighting audit requires a thorough verification of and reporting on random sample loan files of various products so as to confirm whether the appraisal and disbursements are as per the policies and processes of the institution, and report deviations in compliance to these policies and processes, if any. Hind Sighting audit is best performed by an Independent agency, whose auditors need to possess the necessary domain knowledge related to auditing the various products of the client. The Hind Sighting audit has to monitor whether all compliance requirements of the client institution are met.
C-SPEED Solution:
Centillion offers a web based platform to ensure all loans sanctioned follow KYC and other credit norms required by RBI and the client. It checks for gaps in document collection for pre-and post-sanction and post-disbursement, and ensures dealer invoices, RTO, and insurance documents are verified as per policy. The audit also checks the requirements of customer agreement, Electronic Clearing Services/Post Dated Cheque mandates, and correct margin money collection. The Hind Sighting audit identifies and captures all the exceptions and reverts made between the auditors and the client for closure of the exceptions in the online auditing tool.
The Benefits:
Hind Sighting audit provided client with:
¬ Well trained auditors who possess the required domain knowledge to successfully carry out Hind Sighting audits.
¬ A web-based platform for online audit and error resolution and rectification
¬ Standardized and coded exceptions and responses built into the audit platform so that any ambiguity is eliminated while publishing reports or while closing errors.
¬ A checklist that ensures regulatory compliance and decreased financial and legal risks
¬ Complete and accurate loan files before sending for storage
¬ Real time MIS and dashboards to required stakeholders on business done, productivity and turn-around-time.
Concurrent Audit
Case Study:
The Challenge:
Conducting an examination of KYC compliance, checking the credit procedures followed, collections and remedial processes carried out, terminations/foreclosures processed, or auditing the vendor empanelment and payouts done immediately or near thereto as possible is a challenge for any financial or non-banking financial organization. The organization has to make sure that no leakage of revenue occurs while conducting financial transactions, and has to also ensure that all the processes as prescribed by the institution are followed. The institution has to monitor any losses before a financial transaction occurs or immediately after it happens. These are challenges faced by all banks and NBFCs.
C-SPEED Solution:
A pre-concurrent audit study, to get all relevant information, is conducted and a proper audit plan is prepared, which covers all the areas of the scope, while keeping the time lines in the view. Centillion ascertains the pre-requisites of the loan product such as the eligibility criteria and essential documents to be obtained, and then compares these with procedures adhered to by the client to analyze whether the borrower is eligible as per the client’s policies. Any observation noted during the verification is consolidated and reported. Centillion offers the Compliance Management System (CMS), which is an online auditing platform that takes care of all concurrent audits.
The Benefits:
Centillion’s Concurrent audit enabled the client to
¬ Shorten the interval between a transaction and its examination by a trained auditor due to a systematic and timely approach by Centillion.
¬ The audit ensured accuracy, loss due to revenue leakage, and compliance with procedures and guidelines since Centillion lays emphasis on substantive checking in key areas rather than test checking.
¬ The web-based CMS platform provides for online resolution and rectification of all errors and averted potential customer service issues for client.
¬ Aided client in timely escalation of issues to take care of customer concerns and sends early warning signals to prevent fraudulent transactions.
¬ Centillion’s MIS enabled client to make a decision by choice rather than by chance.
CASE STUDY: Centurion Bank of Punjab (CBoP):
The Client:
Centurion Bank of Punjab, now merged with HDFC Bank, was a mid-sized private sector bank with an employee base of 12,000 people, revenue of approximately 1300 crores, and presence in almost every Indian state. During the 10 year period from 1998 to 2008, the bank had made three acquisitions (Twentieth Century Finance, Bank of Punjab, and Lord Krishna Bank) and had become the fifth-largest bank in the private sector.