SIP Presentation

on AU Small
Finance Bank
Presented By:
Madhur Agarwal
Company Overview
AU Small Finance Bank a Fortune India 500 Company, is the only scheduled
commercial bank headquartered at Jaipur, Rajasthan. It was founded by Mr.
Sanjay Agarwal as vehicle finance company AU Financiers (India) Ltd in 1996 and
converted to a small finance bank on 19 April 2017.

AU stands for:

● Inclusiveness
● Progress for all
● Simplicity
● Action & Urgency
Mission Vision

● To build one of India’s largest To be the world’s most trusted retail

retail franchise that is admired bank and coveted employer, that is
for. admired as the epitome of financial
● Making every customer feel inclusion and economic success,
supreme while being served. where ordinary people do
● Aspiring that no Indian is deprived
extraordinary things to transform
of banking.
society at large, thereby
● Bias for action, dynamism, detail
guaranteeing trust, confidence and
orientation and product & process
customer delight.
innovation.
● Globally respected standards of
integrity, governance and ethics.
Financial Performance of
the Bank

● The bank has seen a year-on-year growth of 58% in

its total income.
● The profit After Tax has also seen a steady growth of
31% year-on-year.
● Net Worth of the bank has also seen a year-on-year
growth of 39% over the last 5 years.
● The disbursements have increased from ₹3,378
Crores in 2015 to ₹16,077 Crores in 2019, making it
to grow by 49% year-on-year.
Products AU offers ● Vehicle, Commercial Vehicle,
Tractor, Two-Wheeler Loan
● Secured Business Loan
(MSME/SME)
● Home Loan
● Consumer Finance
● Business Banking, Trade Finance &
Forex
● NBFC/HFC/MFI lending
● Savings and Current Account
● Mutual Funds
● Life and health Insurance
● General and Fire Insurance
Internship Objectives

● To understand & learn the process of Securitization

● To understand the process of report generation using the statements of
Securitization.
● To verify the Authenticity of PT Certificates used by the third party being a
guarantor to the deal.
What is Securitization?

Securitization is the process of taking an illiquid asset, or group of assets, and

through financial engineering, transforming them into a security.

In other words, Securitization is the pooling of cash flows and the issuance of
securities backed by underlying assets. The repayment of securities is solely
dependent on the performance of the assets. Securitization de-links the credit risk
of the issuer from the securitization transaction.
Process of Securitization

● Selection of assets by the Originator.

● Packaging of pool of loans and
advances (assets).
● Underwriting by underwriters.
● Assigning or selling to of assets to
Special Purpose Vehicle (SPV) in
return for cash.
● Conversion of the assets into
divisible securities.
Key Benefits of Securitization
● Typically, cheaper financing than traditional funding.

● Diversification of funding.

● Non-recourse to the originator/seller of the receivables.

● Early monetization of assets.

● Control of obligor exposure.

Risks in
Securitization
● Credit Risk when the borrower
makes a default in payment.
● Recovery Risk arises when the risk
followed by credit risk and contracts
to the defaulting entity turning into
NPA and not being able to recover
the amount in full.
● Liquidity Risk as to how long that
asset cannot be traded into market.
Key Learnings & Challenges

Learnings

● Need to keep in touch with industry mentor for personal growth.

● Training on Oracle BMS, industry practised tool by popular banks.
● Interaction with the MD of bank helped me gain professional insights
directly from the industry leader.
 Challenges

● The on-boarding was taking time & the work was not quickly assigned
as well.
● Because access to data was restricted, it was very inconvenient for me
complete the tasks assigned to me on time.
● Time & resources were less & since they were more than 40 interns
the availability of mentor.
Thank-You