MODELS :
The company may enter into co-lending arrangement on the basis of any of the following models:
- The arrangement would entail joint contribution of credit at the facility level, by both the company and Co-Lenders.
- The Co-Lenders shall take over its share in the exposure after disbursement of the loan on back-to-back basis subject to due diligence.
COMMERCIAL :
The Company and the Co-lenders shall have the flexibility of pricing their part of exposure in accordance with internal pricing strategies, however, the ultimate customer shall be charged an all-inclusive interest rate. Upon repayment, the interest shall be shared between Company and the
Co-lenders in proportion to their share of credit and interest.
Both the models would involve sharing of risks and rewards between the Co-Lenders for ensuring appropriate alignment of respective business objectives, as per the mutually decided agreement between the Co-Lenders. A minimum 20% of the credit risk by way of direct exposure shall be on the
Company’s books till maturity and the balance will be on the Co-Lender’s books.
- Fess and expense sharing-
Appropriation between the Company and Co-lenders may be mutually decided, basis agreement with the individual Co-Lenders.
Appropriation between the Company and Co-lenders may be mutually decided, basis agreement with the individual Co-Lenders.
FUND MANAGEMENT :
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The Company and Co-Lender shall maintain each individual borrower’s account for their respective exposures. The Master Agreement shall clearly specify the manner
of appropriation between the Company and Co-Lenders.
PROVISIONING :
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In event of default, provisions shall be provided in books for the mentioned loan (Company part) as per Company’s board approved policy. Any additional provisions shall
be made on case-to-case basis.
OPERATING ASPECT :
- Standard Operating Process-
A detailed Standard Operating Process (SOP) would be created in discussion with the Co-Lenders following the co-lending Master Agreement being entered into, to suitably detail the
Credit Appraisal process within the SOP.
Co-lending opportunity will be explored across all branches of the Company.
- Customer Service and grievance redressal-
The Company shall be the single point of interface for the customers and shall enter into a loan agreement with the borrower, which shall clearly contain the features of the
arrangement and the roles and responsibilities of the Company and Co-Lender. The Company, being the front-ending lender, will be primarily responsible for providing the required
customer service and grievance redressal to the borrower. However, any complaint registered by a borrower with the Company shall also be shared with the Co-Lender and in case, the
complaint is not resolved within 30 days, the borrower would have the option to escalate the same with concerned Banking Ombudsman/ Ombudsman for NBFCs.
All the details of the arrangement shall be disclosed to the customers upfront, and their explicit consent shall be taken.
iii. The extant guidelines relating to customer service and fair practices code and the obligations enjoined upon the Co-Lender and Company therein shall be applicable mutatis
mutandis in respect of loans given under the arrangement.
OTHERS :
Any assignment of a loan provided under the CLM by the company to a third party can be done only with the consent of the Co-lenders.
The framework for monitoring and recovery of the loan, shall be guided as per mutually agreed terms with the individual co-lending partners.
- Business Continuity plan-
Company shall ensure uninterrupted service to their borrowers, on-boarded under the CLM, till repayment of the loans even in the event of termination of co-lending arrangement between
the Company and Co-lenders.
- Internal and Statutory Audit-
The loans under the CLM shall be included in the scope of internal/statutory audit to ensure adherence to company internal guidelines, terms of the agreement and extant regulatory
requirements.