Higher education is often seen as a shortcut to jobs and better wages. More and more Indians are pursuing the dream of quality higher education in India and abroad. However, education has become expensive. It no longer can be funded by limited savings of parents. Students seek loans to fund their education.

This has lead to an increased demand for education loans. Government has classified education loans under priority lending category. Due to the convergence of multiple factors, in recent years, there is an emergence of NBFCs which specialise in education loans. These NBFCs are seeing double digit growth and are fast expanding their branch footprint across Tier 1, Tier 2 and Tier 3 cities.

Our Client

Our client is India first dedicated education loan NBFC which pioneered the concept of Education Loan. Our client has disbursed education loans to over 13,000 students to pursue higher education in over 45 countries around the world. In addition, our client also finances education institutions and has funded 300 institutes benefitting over 7 lakh students.

The client had a manual compliance management program. They were using spreadsheets and emails for tracking status of critical compliances. As they were growing, they were losing day to day control. There were several instances of missed compliances and missing documents such as copies of challans, working files and statutory registers.

Some of the key challenges are as given below:

  • Baseline review and gap analysis not done for years
  • Lack of confidence in the list of applicable Acts and Compliances.
  • Regular updates and changes in the regulation related to NBFC
  • High amounts of Penalties and interest expenses on account of delays
  • Manual follow ups leading to lot of time spent on getting status of compliances across the company
  • Poor awareness of risks arising out of non-compliance among stakeholders
  • Less clarity on State Rules and State Wise applicable Compliances
  • Several statutory notices on on account of missed compliances
  • Business risks arising out of missed license renewals

Our client needed effective solution which could help them improve day to day tracking and visibility into their compliances. An ideal solution would help them bring greater control and transparency. They needed a compliance automation solution which could help them bring greater control over applicability, legal updates and real time status tracking.

Avantis Engagement

Avantis engaged with the client company in the first quarter of 2016 and conducted a thorough analysis of business activities, entities and locations. A team of 2 subject matter experts visited their headquarters and plant locations to understand the operational process and workings of the company.

Phase 1 - Business Discovery

This phase of the project focused on understanding the client’s business and after a through interactions with the departmental heads and management, the following information were generated:

  • Business Set up (Entities, Locations, clients, nature of establishments, Industry, )
  • Products (Education Loan, Executive Education Loan, Loan Refinancing)
  • Regulatory Authorities(Ministry of Company Affairs, Reserve Bank of India, Stock Exchange Board of India, Central Board of Direct Taxes, Central Board of Excise and Custom etc)

Phase 2 - Compliance Applicability Assessment

Avantis identified client business, entities, locations, product etc. and develop a list of Acts and compliances applicable to their business. The client operates in 11 States with 11 Branches & a corporate office in western region of India.

The team identified over 73 applicable Acts with over 3,000 applicable compliances including time based and on-going compliances. An additional 1,020 event-based compliances were also found applicable.

Phase 3 - Implementation

Avantis assigned a 2 member team of SMEs to work with the client. The client was keen to implement the product in phases. Our team worked collaboratively with the client and developed a 2 month long implementation plan. The plan included physical visits to branch office. Here are the key activities undertaken during the implementation phase:

  • Map the Client Organisation (Entities, Sub-Entities, Branches, Locations, Departments)
  • Review of identified applicable Acts and Compliances with respective department heads
  • Discuss identified gaps with department heads and compliance head
  • Map Compliances to specific users based on their roles
  • Hands on training sessions with user groups based on their locations and roles
  • Activation of system for a predetermined go-live date
  • A total of 35 users were mapped and trained over a period of 6 weeks for Performer, Reviewer, Approver and Management Roles

In Conclusion

Our client is a leading education loans NBFC in India with a sizable national footprint. Avantis completed end to end implementation in about 8 weeks. Now, the Compliance officer has much greater control over their organisation’s compliance. The level of awareness and sensitivity to statutory liabilities across the organisation has improved dramatically. He is able to identify risks and issues in real time and plan necessary interventions. There is greater visibility, transparency and accountability in the system. The cost of poor compliances arising out of delays and missed compliances has reduced by 90% over the years. The client has reported a significant maturity in their organisational compliance program. Today management use our predictable, process oriented and digital compliance management environment.

Project Highlights