Saturday, July 8, 2017

Shriram IDFC Merger – 7 Gains to Digital Transactions

          The core belief of Shriram Group revolves around this Mahatma Gandhi Saying: “Create a company that creates wealth for society and employment, and run it like a trustee—you are just in charge to create the wealth, not own it”.

          Mandatory Reading Material to understand Shriram Group Philosophy - The Socialist Moneylender

          Shriram Transport holds a leadership position in commercial vehicle financing, while Shriram City Union offers small loans to a large base of customers across micro, small and medium enterprises in rural and semi-rural areas. 

These are new sunrise areas for Safe Digital Transactions in our country. The following gains will be visible once the system integration kicks-off.

Gain No 01) All Shriram Group customers will be encouraged to open Bank accounts with the new entity.  Straight through Internal Direct Debit transactions will be the norm instead of Collections through Cheques/ECS(Debit)/NACH(Dr)

Gain No 02) Truck loan borrowers will be encouraged to explore digital transaction channels rather than cash based. Truck owners have their sphere of influence and will be a key component in spreading the Joy of Safe eTransactions for the new entity. Ziggit Wallet offered by IDFC Bank can be flagship product for spreading the Joy of Safe eTransactions.

Gain No 03) Borrowers will be provided with innovative digital payment options viz; a) Bonus points for on time payment b) Instant roll over facility of working capital loans c) Quick top-up  of existing loans d)

Gain No 04) All customer facing borrower outlets will be nudged to provide digital collections tools at their outlets i.e POS Machines/Wallets etc. Bharat QR Code can be the chief collection digital tool for its Current Account/Overdraft Account/Term Loan retial outlets.

Gain No 05) The collection for Chit Fund instalments is still done through physical cheques as the instalment varies from month to month. An innovative product to digitise Chit Fund collections will be a wonderful morale-booster to the initial supporters of Shriram Group.

Gain No 06) Loan disbursements can be instantly credited to the borrowers accounts with the new entity instead of being routed to accounts held at other banks. This will enable the borrowers to quickly access the loan amounts with NIL Charges.

Gain No 07) All interest and maturity payouts of Shriram Group Debentures/Fixed Deposits can be instantly credited to the customers accounts held with the new entity. This will reduce the TAT and improve the confidence levels of prospective customers.
Additional Reading Material to get a feel of Shriram Group beliefs


B)   Ramamurthy Thyagarajan - Founder at The Shriram Group Pvt Co.

C)   We must support manufacturing even if it hurts profits in the short term

D)   Interview with Ajay Piramal, Chairman, Piramal group, and R Thyagarajan, Founder of Shriram group

E)   Associated with Vysya Bank


G)   Letter from Mr. R.Thyagrajan

H)   Merger with IDFC not an attempt to enter banking through backdoor: Shriram Capital’s Ajay Piramal