MyLoanCare Ventures Private Limited Policy for Advancing Loans and other Credit Facilities
MyLoanCare Ventures Private Limited (hereinafter referred to as the “Company” or “MLC”) is a Private Limited Company registered under the Companies Act, 2013 vide CIN U65100DL2013PTC258637 and registered with the Reserve Bank of India as a Non-Systemically Important, Non-Deposit taking, Non-Banking Finance Company under the category NBFC- ICC vide CoR N-14.03560 dated 23rd September 2021. The Company currently falls under the Base Layer NBFC classification (NBFC-BL) as per the Scale Based Regulation issued by RBI vide circular RBI/2021-22/112 DOR.CRE.REC.No.60/03.10.001/ 2021-22 dated 22nd October 2021.
Reserve Bank of India (RBI) has vide its Master Direction DNBR.PD.007/03.10.119/2016-17 dated Sep 01, 2016, as updated through circulars and directions issued from time to time, mandated Boards of Non-Banking Finance Companies (“NBFC”) to adopt a loan policy laying down its approach and policy in respect to sanctioning and disbursing loans. Further the Reserve Bank of India (RBI) has vide its Circular RBI/2022-23/111 DOR.CRE.REC.66/21.07.001/2022-23 dated 02nd September 2022, issued guidelines for digital lending for regulated entities (RE), Digital lending apps (DLA) and Lending Service Provider (LSP), hereinafter referred to as RBI Digital Lending Guidelines.
Keeping in view the RBI Guidelines as cited above, the board of the “Company” has approved this loan policy outlining the approach to be adopted by the company henceforth. This policy is to be read in conjunction with RBI guidelines, directives, circulars, and instructions. The Company will apply industry practices so long as such practices do not conflict with or violate RBI guidelines.
The policy for advancing loans is as follows:
Types of Loans – Company may advance
- Amortizing loans with equated monthly/ daily / periodic/ non periodic / frequent instalments
- Bullet loans
- Non-amortizing or partially amortizing line of credit
- Drop line overdraft facility
- Other such credit facility as may be agreed with the customer
- Fully or partially secured loans or creditline or overdraft for personal and / or business use with any security or collateral as the Company may decide in its absolute discretion including but not limited to immovable property, gold jewellery and ornaments, listed or unlisted securities including but not limited to shares, debentures and bonds, deposits, insurance policies, promissory notes and others.
- Unsecured loans or creditline or overdraft for personal and/ or business use
Provided that in case of secured loans, the Company shall ensure that:
- the RBI guidelines with respect to loan-to-value ratio and ownership proofs are adhered to while sanctioning and disbursing the loans
- specifically, in case of loan against single product – gold jewellery,
- the Company shall maintain a loan-to-value ration of not more than 75 percent; wherein the value of gold jewellery shall be reckoned as the intrinsic value of the gold content therein only and not include the value of any other cost elements; further provided that the gold jewellery shall be valued by taking the preceding 30 days’ average of the closing price of 22 carat gold as per the rate quoted by the Bombay Bullion Association Limited (BBA) or the historical spot gold price data publicly disseminated by a commodity exchange regulated by the Forward Markets Commission adjusted proportionately for the actual purity of the gold in terms of equivalent grammage of 22 carat gold
- a document shall be prepared at the time of accepting the security detailing the ownership of the jewellery, how it has been determined and the customer’s declaration ion this regard on case the one time or cumulative gold pledged by the customer is more than 20 grams.
- the Company shall, while accepting gold as collateral, give a certificate to the borrower on its letterhead , of having assayed the gold and state the purity (in terms of carats) and the weight of the gold pledged
- auction of the gold shall only be done strictly as per the RBU’s guidelines in this regard and shall be conducted in the same town or taluka in which the branch that has extended the loan is located after giving due notice and declaring a reserve price (determined as per RBI guidelines).
- on auction, full details of the value fetched shall be disclosed transparently and any amount over and above the outstanding dues shall be promptly payable to the borrower.
- specifically, in case of loan against single product – gold jewellery,
- the broad eligibility criteria and maximum loan to value ratio for different types of security shall be as below:
Type of security Broad Eligibility Criteria Maximum Loan To Value Ratio Residential Property Property with clear and marketable title in an authorized municipal area with firm ownership proof; serviceable location; minimum carpet area norms applicable 75%; except in case of home loans, where upto scale based funding upto 90% may be permissible as per RBI guidelines Commercial Property Property with clear and marketable title in an authorized municipal area with firm ownership proof; serviceable location; minimum carpet area norms applicable 65% Gold Jewellery Ornaments and jewellery excluding gold bar or coin of more than 50 grams weight. 75% of value of gold assessed as per RBI guidelines Listed equity shares Shares listed on NSE or BSE held in demat form with a minimum market capitalization of Rs. 1,000 crores and average combined daily trading value of Rs. 1 crores in last 3 months. 50% Unlisted equity shares Not acceptable NIL Bonds, debentures, government securities and other debt securities Investment grade freely tradeable instruments in demat form 90% of principal value Fixed deposits Deposits with scheduled commercial banks with ability to mark pledge 90% of principal value
- Non-discrimination: The Company offers non-discriminatory rates of interest and terms to all its customers and its loans, subject to its policies, are available to resident Indians of all religions, caste, creed, regions (subject to availability of service in particular area), personal preferences and other personal factors.
Disbursement of net loan amount shall be done directly into the validated bank account of the customer and not to any third party and repayments by customers shall always be executed directed into the company’s bank account, except as permitted under extant RBI regulations.
- Cooling off/ look up period: For loans processed digitally over an LSP/ DLA, including the Company’s own DLA, the customer shall be provided a cooling off/ look up period of 1 day for loans of less than 7 days tenure and of 3 days for other loans during which the customer shall have the option to exit the loan by paying the principal amount and proportionate APR without any penalty or charges. This shall form part of the KFS and the loan agreement executed with the customer.
- Interest rate and other charges: Rates and charges shall be applicable as per the Interest Rate Policy of the Company which may be adopted from time to time and forms an integral part of this policy by way of reference. Any fees/ charges payable to the Company’s LSP’s shall be borne by the Company and not charged by the LSP to the customer directly. Penal interest/ charges levied, if any, shall be based on the outstanding amount of the loan and the applicable rates on an annualized basis shall be disclosed to the customer in the KFS as well as in the loan agreement.
- KYC and Anti-Money Laundering: Company has adopted a KYC and Anti-Money Laundering policy which shall govern the process to be followed and due diligence to be exercised for lending. The same, as amended from time to time, forms an integral part of this policy by way of reference.
- Risk and Product Committee: The Company has constituted a Risk and Product Committee to oversee its underwriting and credit products and programs. The committee shall decide and periodically review the risk assessment, products, risk mitigation, portfolio performance and other aspects of the lending business and make suitable changes as required.
The Risk and Product Committee shall, till further notice, consist of:
Mr. Gaurav Gupta, Whole Time Director and CEO
Mr. Avdesh Tripathi, Chief Business Officer
Ms. Aikta Dubey, VP – Risk
Ms. Abhavya Kaushal, AVP - Product
Loans shall only be made advanced with due judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of capital as well as the probable income to be derived. However, no credit decision is risk free and occasional losses are inevitable in a portfolio.
Officials acting in accordance with prudence in implementing this loan policy and exercising due diligence shall not be held personally liable, provided adequate and reasonable risk mitigation attempts are demonstrable.
- Ethics & Conflicts of Interest
Directors, officers and employees involved in the loan under writing process shall refrain from personal business activity that could conflict with the proper execution and management of the underwriting program, or that could impair their ability to make impartial decisions. They shall disclose any material interests in financial institutions in which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the parties to whom the loans/ facilities have been extended. Employees and officials shall refrain from undertaking personal transactions of any nature whatsoever, with the same individual or company to whom loan or credit facilities are extended on behalf of the Company.
- Delegation of Authority
Authority to underwrite credit shall reside with the Risk and Product Committee who may delegate the same to users on the CRM and LOS. Authority and limits shall be mapped on the systems and all approvals shall only be through the system. No manual or off-system approval shall be valid under any circumstances.
- Diversification and Restriction on exposures
- Principal amount due from a single borrower shall not exceed Rs. 10 lakhs
- Principal amount due from a single borrower family (self, spouse and children) shall not exceed Rs. 15 lakhs
- Employees, directors and officers of the Company including its parent, subsidiaries and affiliates, and their immediate family members including spouse, siblings, children and parents shall not be eligible for loans or any credit facility from the Company.
Effective Date: 7th September 2022