CREDIT POLICY OF B P SECURITIES (INDIA) PRIVATE LIMITED (“BPS”)
SUMMARY OF THE POLICY
| Document Name | Credit Policy |
|---|---|
| Issue and Effective Date | 25/04/2024 |
| Date of Next Review | 26/04/2026 |
| Periodicity of Review | Annual |
| Owner / Contact | Credit Department |
| Approver | Board of Directors |
| Annexures | - |
OBJECTIVE AND SCOPE OF THE POLICY
B P Securities (India) Private Limited (hereinafter the Company or BPS) is registered with the Reserve Bank of India (RBI) as a non-deposit accepting NBFC. This policy outlines the principles for the Company’s lending activities and ensures compliance with RBI guidelines.
Objectives:
- Standardize lending policies and procedures.
- Implement due diligence to mitigate credit risks.
- Define overall risk appetite.
- Establish an underwriting framework including credit and risk limits.
- Ensure thorough credit appraisal and proper monitoring of all outstanding credits.
The Company adheres to the highest ethical standards and best practices in the industry.
BUSINESS STRATEGY AND OPERATIONS
The Company aims for financial sustainability, relying on income from interest on credit, investments, and service fees.
Business Segments
- Retail Lending: Includes personal loans for consumer durables, travel, marriage, etc.
- Personal Lending: Includes loans to individual for their business and non-business needs.
- Corporate Lending: Includes loans to business entity for their business expansion.
Sanctioning Authority
The Board of Directors (the Board) is the sanctioning authority and reviews all credit proposals. The Board may directly approve any credit or feature of the policy.
PURPOSE OF CREDIT
Credits will be extended to meet the financing needs of both existing and new customers for various purposes, including consumer durables and curated lending products.
The Company can further extend the credits to corporate (non-individual entities) for their business needs within the risk appetite and regulatory framework.
CUSTOMER SELECTION
Credits may be provided to
- Salaried employees of public and private sector entities.
- Self-employed individuals.
- Corporate
CREDIT UNDERWRITING
Credit Approval Process:
- Application: Customers submit a form online with details as required for verification and further process.
- KYC Document Verification: Documents are analysed using technological or human resources.
- Credit Appraisal: Decision to provide credit is based on submitted documents.
- Final Decision: Board of Directors makes the final decision.
Since the major focus in retail Credits shall be unsecured Credits, the underwriting shall be strengthened such that Credits shall only be granted after the ability and intention to pay of the individual is assessed to an extent as much as possible. Unconventional sources such as alternative data modelling to arrive at the credit worthiness of the individual can also be used.
Unsecured Credits shall not be granted to those who do not have a verifiable regular income, other than students. In case of students, the personal Credit shall require the guarantee of another person who shall pay in case of default.
Processing Fee:
A processing fee is charged at applicable rates and is subject to revision with customer communication. Additional charges may include prepayment, late payment interest, and legal fees.
TENOR
Retail credits and personal loan as Loan Facility shall be granted upto 1 year with the utilization and repayment facility of such loan from weeks period to till the period of credit facility sanctioned by the Company. Maximum credit facility periods shall not exceed 1 year from disbursement.
DETERMINATION OF INTEREST RATES
Factors Considered:
- Company Factors: Cost of funds, operational costs, and forecasting objectives.
- Customer Factors: Credit bureau rating, customer history, alternative data results, and applied amount and tenor.
- External Factors: Benchmark rates and competition.
Interest rates will be clearly communicated to customers, ensuring transparency. The rate structure may vary based on risk factors, and all changes will be published online or in newspapers.
CUSTOMER JOURNEY
Customers can access services independently through a mobile application or web, or assisted through online/offline modes.
PRE-APPROVED CUSTOMERS
Pre-approved offers based on creditworthiness from alternative data sources may be extended, requiring customer consent for acceptance.
GENERAL INFORMATION
All credit terms, conditions, and charges will be clearly communicated to customers before application processing. BPS will not discriminate based on gender, caste, or religion.
REPORTING TO CICS
The Company will regularly update credit information to Credit Information Companies (CICs) on a monthly basis or more frequently.
PERIODIC UPDATION
The Credit Policy will be reviewed annually or as needed.