14
Centillion Solutions and Services Private Limited Tata Motor Finance Ltd Auto Loan Files Hind Sighting Project Operations Manual (February 2013) 1
Centillion Solutions and Services Private Limited
Tata Motor Finance Ltd
Auto Loan Files Hind Sighting Project
Operations Manual
(February 2013)
1
Document ID CSS/TMFL/Hind Sighting/001
Document Description TMFL Hind Sighting – Operations ManualVersion 1Date February 2013
Midterm review August 2013
Recommended byAnant Ram, Manager Anant Ram
Reviewed by Sarayu, Head – Client Relationship and R.S.Narayanan, Head – Risk & Compliance
Approved by Dinesh Poduval – Business Head
This document is the property of Centillion Solutions & Services Private Limited. Contents of this document contain information that is of competitive value; hence absolute confidentiality of the contents needs to be maintained. Any changes, amendments or revision to this document should be done only with the concurrence of the Business Head.
Table of Contents
1. Objective…………………………………………………………………………….3
2
2. Scope………………………………………………………………………………..3
3. Process Overview...………………………………………………………………..4
4. Process Flow……………………………………………………………………….4
5. Sampling Methodology & Logic…………………………………………………..5
6. Checklist…………………………………………………………………………….5
7. Closure of Audit Observation……………………………………………………..9
8. Annexure…………………………………………………..............................11
3
TMFL Auto Loan Files Hind Sighting Project Operations Manual
1 Objective
The objective of this manual is to set the context and provide an understanding on the process to be followed in Hind sighting of Auto Loan files
2 Scope
Contract files that are booked are taken for hind sighting, assessing the availability and quality (correctness & completeness) of the documents. Any other financial or credit related parameters are not covered in this activity. This document details the processes that are to be carried out for hind sighting. Commercials & penalty clause (if any) is covered in SLA and therefore not part of this manual.
3 Process Overview
The overview of the process is provided through SIPOC chart as follows:
Supplier
Input Process Output Custo
mersBooking Agencies/ Branches
Booked files
Files received at storage
Sampling of file done Hind sighting of the
file done as per checklist
Queries if any are raised
Resolution is done and reported
Files with Zero Audit Observation
Files with Audit Queries
100% File Quality
Senior Management of TMFL
4 Process Flow
HINDSIGHTING PROCESS
Bran
ches
Hind
sigh
ting
team
@
Stor
age
loca
tion
Start
Select the file for hind
sighting as per the pre
defined logic
Verify the file as per
the checklist
Raise the query
observed
Login to the system
Corrective action to be taken and
close the query
Is the file ok?
Report the same in MIS and handover to
storage team
End
Not OK
OK
5 Sampling methodology
4
5.1 Methodology
Based on the volume of booking, branches have been classified each into A, B & C category and number of files to be taken for auditing will vary according to it. The matrix indicating the details of number of branches under each category and number of files to be hind sighted is shown below. The Branch list is attached as Annexure –A and names of branches are shown under A, B & C category
Type of branches based on volume
Number of branches
Number of files to be audited
Total sample size
A 47 95 4465B 86 45 3870C 43 20 860
Grand Total 9195
Files disbursed from every branch will need to be covered in the hind sighting activity. In case in a particular month, the number of files received at the storage is less than that mentioned, then files of another branch in the same category will be picked up for hind sighting.
5.2 Sampling Logic:
a) 50% of the sampling should be done “randomly” on the files received at storage on first 10 days of the month.
b) Next 30% of the sampling to be done from middle 10 days and last 20% from last 10 days of the month
6 Checklist
6.1 Hind Sighting coverage
The hind sighting has to cover three major aspects:
a) Availability of the documentsb) Assessing Quality of the file c) Closure of audit queries
6.2 Checklist
A checklist has been designed classifying each of the following parameters into High & Medium category from risk perspective
a) Compliance b) Financial implication
c) Legal implication
5
6.3 Document Availability and Quality Checklist
The checklist, requirement of related documents and risk category can be seen in the attached file
7 Important points to be noted
7.1 For any existing customer who applies for loan within 6 months of an earlier contract booking, only FI is waived. All the remaining documents, including the Proposal form and KYC documents are required.
7.2 For any existing customer who applies for loan after 6 months of an earlier contract booking there is NO waiver of any documents. All documents are required.
7.3 Every loan file must be stamped as audited on the cover of the file.The hind sighting team must publish the daily MIS in the format given in Annexure B.
7.4 Loan data for branches with suffix 1/2/3 should be merged with the parent branch. For example, loan data for Guwahati 1, Guwahati 2 should be merged with loan data for Guwahati. Once this merging is complete, there will be 172 unique branches.
7.5 The observations raised by the auditors will be viewed and responded to by the area managers. TMFL has provided data of area manager to branch mapping.
7.6 A dealer can have loans across multiple branches. In case of loans acquired through the dealer, the disbursement data does not contain the branch code. It contains only the dealer code. The default branch code will be derived from the dealer – branch mapping information provided by TMFL. When the auditor picks up the physical loan file to audit, the file will have the actual name of the branch written on it. In case the branch name on the file is different from the default branch code of the dealer, the hind sighting tool will have a feature where the auditor can change the branch code to match the branch written on the physical loan file.
7.7 Since all files would be coming to storage from the branches by the 7 th of the month, the audit process would be completed by the 10th of the month. The audit report for the month will be published by the 11th of each month
7.8 TMFL has provided the minimum number of files that need to be audited by the audit team for each branch. In case the auditors receive fewer files than the required number of files for any branch, they can audit the balance files of any other branch at random
7.9 Audit needs to be done based on the files received at the storage location. For this, auditors will require data of files inwarded at each storage location. Initially for the first few months, the sampling logic will be restricted to the defined number of files to be audited for each type (A/B/C) of branch. Sampling based on arrival date at storage will be taken up after this process stabilizes.
7.10 Error resolution process
When an auditor notices errors in the loan file, the errors are first recorded in the hind sighting tool. Errors may be of 2 types :a) Non-availability of Documents in the loan file or availability of an incorrect docu-
ment in the file
6
b) Documents exist in the loan file, but they are incorrect or incompleteIn case documents are not available in the loan file or the document available is an incorrect one, then the concerned Area Manager views the errors that are recorded and sends the requisite documents to the storage location in an envelope superscribed with the following remarks:
TMFL AUDITORS BRANCH : <NAME OF THE BRANCH>
a) Every document should have the branch name and the loan contract number
clearly written on it, so when the auditors receive the documents, they can file the documents in the respective loan file based on the contract number
b) In case document in the file is incorrect or incomplete, the error may be of 3 types :
i. Customer signature is required on the agreementii. Customer signature is required on other documents such as application
form /KYC document/other supporting documentiii. Branch signatures / data are required on the documentsiv. In case of (i), these need to be highlighted separately to TMFL (Mr.
Vishwanath Raj), who will coordinate the rectification process
c) In case of (ii) & (iii), the pages that are incomplete, need to be marked with a POST IT flag. The file will be given to the storage vendor for scanning. The storage vendor will only scan the pages that are marked with the POST IT flag and send the scanned images to the Area Manager by email. The e-mail will specify the branch name and the contract number. The physical loan file will be returned to the auditor by the storage agency.
d) The branch manager will print the scanned image. He will complete the document by taking signatures from the customer / taking signatures from the concerned officials/filling in any missing information. The rectified documents will be sent to the auditors who are stationed at the storage vendor’s premises (except in Mumbai, where they are stationed at PAMAC). Each of the loan documents will have the branch name and the loan contract number clearly written on it, so the auditors can file the documents in the respective loan file. The loan documents will be put in an envelope superscribed with the following remarks:
TMFL AUDITORS BRANCH : <NAME OF THE BRANCH>
e) The auditors will hold all files that are in error for a maximum of 7 days for
resolution. TMFL will advise the storage vendor to provide a separate cupboard that can be locked for this purpose. On the 8th day, the auditors will hand over the files to the storage vendor for final storage. Subsequently, if any documents come in from the branch, they will be handed to the storage vendor for inserting into the correct loan file.
8 Closure of Audit Observations
8.1 Reporting and publishing of audit observation
7
a) Any genuine error observed in the file as per the checklist has to be reported in the daily MIS. The daily MIS will be circulated to the 4 Regional Operations Heads. Given below is the resolution process.
b) On completion of the hind sighting process, in case the loan file does not have any errors, then the file is given to the storage vendor and kept in the final storage bin as assigned by the storage vendor.
c) In case the file has any errors, the auditor will hold the file until all the errors are closed. All files that have errors will be kept in a separate cupboard in the storage facility. The storage vendor will need to provide separate cupboards for this purpose. The number of files in the auditor’s cupboard must match with the daily MIS report. Stock taking of the loan files in the auditor’s cupboard must be done once a month.
d) Once the file has reached the storage location, it MUST NOT travel back to the branch for rectification of any of the errors.
e) There will be two types of errorsi. Documents missing in the loan fileii. There are errors in the documents submitted.
f) In case of documents missing in the loan file, the branch is advised of the er-rors by email. Every error is identified by the loan contract number and cus-tomer name
g) The branch should prepare the documents and courier them to the hind sight-ing team at the storage location. The covering note must mention the loan con-tract number and the customer name, so that the hind sighting team is able to file the documents in the correct loan file. The branch will also send an email giving details of the courier name and the courier reference number for the purpose of tracking the document
h) In case there are errors in the documents submitted, the auditor will affix a POST-IT on the page where there is an error. There will be two types of POST-IT flags
i. Rectification required to be done by the customerii. Rectification required to be done by the branch
i) All files that have errors will have POST-IT flags on the specific pages that have errors. These pages will be scanned. The scanned images will be sent by email to the respective branch heads. The branch heads will take a printout of the scanned image. In case of rectification by the customer, the customer will be contacted and the relevant parts of the document will be completed. For exam-ple, in case the customer signature is missing, then the customer will sign on the scanned image as required. In case of rectification by the branch, the branch personnel will complete the document. The documents thus rectified, will be couriered to the hind sighting team with a covering note mentioning the loan contract number and the customer name, so the hind sighting team is able to file the documents in the correct loan file. The branch will also send an email giving details of the courier name and the courier reference number for the purpose of tracking the document
j) On receipt of the rectified documents from the branches, the hind sighting team will review for correctness and completeness. If there are errors, the
8
process given in steps 7(g) to 7(h) will be followed. If the documents are cor-rect and complete, then they will be filed in the respective loan file. The loan file will be given to the storage vendor for final storage in the bin.
k) Resolution of the observation should be done by the branches (AOM being the SPOC) on an immediate basis. Resolution does not mean that the file is devoid of queries. The error, if found, has to be reported in the MIS, resolution is a secondary aspect.
l) Other than where queries that requires hard copy to be dispatched, all the queries should be resolved within 2 working days. Hard copy when sent to the branch should reach to hind sighting team within 7 working days after resolution.
m) Queries that are not resolved within the defined TAT shall be escalated as per the escalation matrix.
Levels of escalation Escalation authority
Timelines
Level 1 Regional Manager - Operations 1 day beyond TATLevel 2 Head - Operations Next day after first escalation
Level 3 Head – Credit & Operations2nd day after second escalation
Level 4 Head – Business Support Group 2nd day after third escalation
9 Escalation Matrix for Centillion
Escalation relating to any issue concerning centillion auditors or the Centillion delivery may made as per the below mentioned escalation matrix.
9.1 First Escalation Zone Phone no E-Mail IDEast Zone 98306 64510 [email protected] Zone 98117 68823 [email protected] Zone 98804 17551 [email protected] Zone 88986 53220 [email protected] EscalationHO Ops 99029 63910 [email protected] EscalationHO 94481 31059 [email protected]
10 Deviation approval
Centillion auditors should look for approval by the authorised officials of TMMFL for any deviation from the process laid down in this manual. In the absence of deviation approval the deviation should be captured as an audit observation
11 Resolution of Issues
a) Issues needing Immediate Action will be taken up by Centillion with the Head Operations of TMFL
b) TMFL will suggest corrective Action by the branches so as to ensure that the issue does not arise
9
c) TMFL will initiate preventative action so as to avoid the scope for recurrence of any such or similar issues
12 Records Management
a) Hard copy ArchivalCentillion auditors will hand over all the loan files to the storage agency except in the case of files which have audit observations in which case, the files will be held back for 7 days. The storage agency will provide adequate strage space with lock and key arrangement
b) Soft copy Since the CMS – HS solution is hosted from TMFL server, the data archival will be done by the TMFL IT support team.
c) Safety and Security of documentsCentillion auditors will ensure that the files in their custody are preserved prperly till those are handed over to the storage agency.
13 Quality Management
a) Keep record of files audited by mapping to the actual number of files booked as also to the ABC classifcations
b) Capture KYC compliance gaps for quality check c) Conduct quality review of availability, correctness and completeness of documents
in the filesd) Provide monthly summary report on quality to TMFL
14 Compliance
Tracking Compliance on major Statutory and egulatory and process requirements:
a) KYC complianceb) Document eveidencing Purchase (Invoice), Registration and Insurancec) Adherence to the sanction terms d) Obtention of post sanction and post disbursement documents
15 Monthly Reviews
Centillion will organize monthly reviews with TMFL team to discuss the progress and quality of audit and status of resolution. The action points in such reviews will be implemented by Centillion and TMFL teams
16 Annexures
16.1 Annexure – A: Branch List
10
16.2 Annexure B: MIS Report
Given below is the format of the daily MIS report that needs to be published by the hind sighting team.
16.3 Annexure C: IT User Manual
11
