CREDIT POLICY

R.K. Bansal Finance Private Limited

1. PREAMBLE

R.K. Bansal Finance Private Limited (“the Company“) is registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company – Base Layer (NBFC-BL) under the Scale Based Regulation (SBR) framework and is primarily engaged in the business of Pay Day Loans, Loans Against Property (LAP), EMI-based Retail Loans and Corporate Business Loans.

The purpose of this policy is to establish a harmonised framework for credit origination, risk control, portfolio diversification, liquidity stability and regulatory compliance in alignment with RBI Master Directions, circulars and prudential norms as amended from time to time.

The Company recognises that Pay Day Loans constitute a major portion of its loan portfolio and therefore incorporates enhanced prudential safeguards, risk-based underwriting controls and strict concentration norms specific to this segment.

2. OBJECTIVES OF THE POLICY

The objectives of this policy are to:

Establish structured and standardised credit processes
Ensure prudent credit appraisal and responsible lending
Prevent excessive credit concentration
Maintain optimal liquidity and solvency levels
Mitigate credit, operational and liquidity risks
Align portfolio strategy with risk appetite
Strengthen governance and supervisory oversight
Ensure full regulatory compliance

PART A – CREDIT POLICY FRAMEWORK

3. CREDIT PHILOSOPHY

The lending philosophy of the Company is based on responsible financial inclusion while maintaining asset quality and profitability. Lending decisions shall be guided by:

Risk-based pricing
Conservative underwriting
Real income assessment
Behavioural data analytics
Portfolio diversification

The Company aims to balance growth with sustainability, ensuring that credit expansion does not compromise financial stability.

4. CREDIT PRODUCTS

4.1 Pay Day Loans

Short-term unsecured loans extended to individuals for emergency or immediate cash requirements, generally repayable within 15 days to 6 months.

4.2 Loans Against Property (LAP)

Secured loans against residential or commercial property for personal or business purposes.

4.3 EMI-Based Retail Loans

Structured repayment loans for consumer purchase, education, medical and household needs.

4.4 Corporate Business Loans

Working capital and term loans to corporates subject to strict appraisal norms.

5. CREDIT ELIGIBILITY CRITERIA

Borrowers must meet:

Minimum age and legal capacity
Verifiable income source
Acceptable credit bureau score
Repayment capacity assessment
Compliance with KYC norms

The Company shall follow “Fit and Proper” borrower assessment and shall not grant loans to blacklisted or high-risk profile individuals.

6. CREDIT UNDERWRITING PROCESS

Includes:

Customer onboarding & KYC
Income verification & bank statement analysis
Credit bureau analysis
Debt-Service Ratio evaluation
Risk grading and scorecard based evaluation
Documentation & disbursement

Special due diligence shall apply for repeat borrowers and high-value loans.

7. CREDIT PRICING & INTEREST STRUCTURE

Interest rates shall be determined based on:

Cost of funds
Credit risk profile
Portfolio concentration risk
Market conditions
Operational costs

APR and Key Fact Sheet shall be mandatorily disclosed as per RBI Digital Lending norms.

8. REPAYMENT & MONITORING

Repayments through ECS/NACH/UPI
Continuous monitoring of EMI track record
Early warning signal detection
Collection escalation framework

PART B – CREDIT CONCENTRATION POLICY

9. DEFINITION

Credit concentration risk arises when exposure to a borrower, sector or geographic cluster becomes excessive.

10. EXPOSURE LIMITS

10.1 Single Borrower

Not exceeding 15% of Owned Funds

10.2 Group Borrower

Not exceeding 25% of Owned Funds

11. PRODUCT CONCENTRATION LIMITS & MANAGEMENT

Product	Max Exposure %
Pay Day Loans	90%
LAP	2%
EMI Loans	5%
Corporate Loans	3%

While the above concentration limits reflect the existing business model and strategic focus of the Company, it is acknowledged that such high dependence on a single product category may increase portfolio vulnerability. Accordingly, the Company shall proactively undertake steps to progressively diversify its loan portfolio by expanding secured lending, retail EMI-based products and corporate business lending. Strategic initiatives shall include product innovation, targeted marketing, risk-adjusted pricing and gradual rebalancing of the portfolio to achieve a healthier and more sustainable credit mix over time.

PART C – LIQUIDITY RISK MANAGEMENT FRAMEWORK

13. LIQUIDITY GOVERNANCE

Board of Directors

14. ALM STRUCTURE

Maturity profiling
Structural liquidity analysis
Cash flow forecasting

Time buckets as per RBI prescribed standards shall be followed strictly.

15. LIQUIDITY MONITORING TOOLS

Concentration of funding
Stock approach liquidity ratios
Unencumbered asset buffer
Stress testing approach

16. LCR FRAMEWORK

The Company shall maintain minimum LCR as per regulatory thresholds and maintain adequate HQLA.

17. CONTINGENCY FUNDING PLAN