With the Prime Minister pushing people to go in for cashless transactions in the wake of demonetisation of high-value currencies, non-banking finance company Sundaram Finance Ltd. (SFL) is gearing up to hard-sell fleet cards.
Indicating this, T.T. Srinivasaraghavan, Managing Director, Sundaram Finance, said he was optimistic that more transport operators would now look at adopting the fleet card model.
The fleet card is a fuel-management tool that provides customers an efficient way to purchase auto fuels such as diesel, petrol and lubricants. It allows for low-cost working capital to monitor and control one’s fleet expenses. Typically, it offers a comprehensive customer credit limit, within which one can pre-set a daily usage ceiling for each vehicle and derive maximum effectiveness. It also allows one to outsource the billing and payment process.
“In line with the Prime Minister’s vision of cashless transactions, we are now looking to market these fleet cards even more aggressively with the fleet operators by educating them on the benefits of such cards,’’ he said.
Sundaram Finance has a comprehensive fleet card programme - XTRAPOWER in alliance with IndianOil and SmartFleet in tandem with Bharat Petroleum.
The currency ban, he said, could badly hit micro-finance institutions. “For smaller NBFCs, where over 50 per cent of the collections is in cash, there could some challenges,” he added. Larger NBFCs did their entire disbursements through banking channels. “For us, the collection through the cash route is in the range of 15 to 20 per cent. I do think that this category of NBFCs is the least affected in terms of the collection part,’’ he said.
November had traditionally been a weak month on the disbursements front, coming off the highs of the festive period (Diwali and Dussehra) in October. “Last month was an exceptional month for us and we had record disbursements. Interestingly, the disbursements this November have been slightly higher than the disbursements in the same period last year,” he pointed out.
Mr. Srinivasaraghavan felt the problems were to do with the operations on the commercial vehicle (CV) finance front. “Transport operators make a lot of their payments, including salaries, in cash. Hence, the truck movement has been affected. I think all of this should settle down in 2-3 weeks. “If GST for CVs is kept at 26 per cent, there will be a lot of pre-buying in Q4 in the CV space and that could spur growth,” he said.
