Section 1 – Introduction

Padmalaya Finserve Private Limited (“Padmalaya” or “the Company”) is registered with the Reserve Bank of India (“RBI”) as a non-deposit accepting Non-Banking Financial Company (“NBFC”), bearing Certificate of Registration No. B.01.00622. As an NBFC, the Company is required to adhere to the guidelines and directions issued by the RBI from time to time. In accordance with the RBI Master Direction (Reserve Bank of India – Non-Banking Financial Company – Scale Based Regulation) Directions, 2023, the RBI (Digital Lending) Directions, and the Fair Practices Code prescribed by the RBI for NBFCs, the Board of Directors of the Company has adopted this Credit Policy.

This Policy outlines, at a level appropriate for public disclosure, the principles governing the Company’s lending activities in respect of its Personal Loan (“PL”) product. The Company will ensure that this Policy is properly implemented and kept current in compliance with all applicable regulatory, corporate and legal requirements. This Policy does not disclose the Company’s internal credit-risk rules, underwriting thresholds, fraud-control techniques or credit-scoring methodology, which are commercially sensitive and are governed separately under a Board-approved internal Credit Programme.

Section 2 – Objective

The objective of this Policy is to inform customers and other stakeholders, in clear and accessible terms, of the Company’s approach to eligibility, credit assessment, pricing, and the gradation of risk applicable to the PL product, consistent with the Company’s obligations under the Fair Practices Code and the RBI Digital Lending Directions.

Section 3 – Product Overview

The Company’s Credit team owns the underwriting process for PL – an unsecured personal loan with a fixed tenure of 2 (two) months, repayable as a single facility on the scheduled due date. This product is, as of date, available through the Android version of the Company’s “Bridge” application and website www.bridgecapital.in.

A customer may avail only one PL facility at a time. Concurrent loans to the same customer are not permitted, only once an existing loan has been fully repaid and closed may the customer apply for a subsequent loan on the app. The Company does not lend against its own shares/securities and does not offer call or demand loans.

Section 4 – Policy Details

4.1 Policy Flow

• Leads are generated either organically or through digital marketing channels.

• Applications pass through the Company’s automated credit-decisioning system, which evaluates the application against the Company’s credit and fraud-risk criteria.

• The outcome of this evaluation is an approval, a rejection, or a requirement for additional manual review/verification.

• Where approved, the eligible loan amount is determined by the Company’s decisioning system and disbursed to the customer’s verified bank account.

4.2 Data Sources

In assessing an application, the Company may draw on the following categories of information, collected and processed strictly in accordance with the Company’s Privacy Policy and applicable data-protection law:

• information provided by the customer in the loan application;

• consent based device information collected through the Bridge application, used for identity and fraud verification;

• the customer’s prior repayment history with the Company, where applicable;

• credit bureau information;

• consent based transactional SMS; and

• with the customer’s explicit consent, bank statement/Account Aggregator data – this is not required for every applicant, and is generally sought only where a first assessment is inconclusive or where the customer seeks a higher loan amount.

4.3 Eligibility, Verification and Assessment Approach

Loan applications are assessed against the Company’s eligibility, verification and affordability criteria, which include the following categories (the specific thresholds applied within each category are set by the Company’s Credit/Risk function from time to time and are not published, as they relate to the Company’s internal risk controls):

• age and residency – applicants must fall within the Company’s permitted age band and reside in a serviceable location;

• demographic profile – credit may be extended to salaried employees (public or private sector) and self-employed individuals with a verifiable, regular source of income;

• statutory and regulatory screening – applicants are screened against applicable sanctions/politically-exposed-person and other regulatory watch-lists;

• minimum income criteria – a minimum monthly (and, where applicable, household) income threshold applies;

• identity and fraud verification – standard KYC document verification, identity-document validation, and other verification and anti-fraud checks are undertaken as part of every application;

• credit history – the applicant’s credit bureau report and, for repeat customers, prior repayment performance with the Company are assessed;

• alternate data assessment – where relevant and with consent, additional data (including transactional SMS, bank statement/Account Aggregator information) may be assessed to corroborate income and repayment capacity;

• affordability – the proposed instalment is assessed against the applicant’s income and existing financial obligations, so that the loan amount offered is commensurate with the applicant’s ability to repay;

• disbursement safeguards – disbursement is made only to a bank account verified in the applicant’s own name, and is subject to mandatory registration of a NACH or UPI Autopay mandate for repayment.

These criteria are monitored on an ongoing basis and may be updated by the Company’s Credit function from time to time, consistent with the Company’s credit risk appetite and applicable regulatory requirements.

4.4 Credit Scoring Approach

In addition to the criteria above, the Company uses an internal credit-scoring approach that draws on bureau, alternate-data and (where applicable) bank statement information to arrive at an overall assessment of an applicant’s creditworthiness. The loan amount and rate of interest offered to a customer are determined with reference to this assessment, as further described in Section 6 and Section 7 below. The specific factors, weightages and cut-offs used within this approach are proprietary to the Company, are reviewed periodically by its Credit/Risk function, and are not published, consistent with standard industry practice.

Section 5 – Risk Rule Change Management & Authorization

The Company’s underwriting criteria are reviewed on an ongoing basis in light of portfolio performance, credit risk appetite, and the applicable regulatory framework. Changes to underwriting criteria require the approval of the Company’s Credit Committee, before implementation, and are subject to post-implementation validation. Applications requiring manual review follow a maker checker framework, under which a reviewing officer’s recommendation is independently checked before a final decision is made.

Section 6 – Risk Categorization Based on Credit Underwriting

• Low Risk: applicants approved automatically through the Company’s straight-through (automated) underwriting process have consistently shown the strongest repayment profile and are categorized as low risk.

• Medium Risk: applicants who are neither automatically approved nor automatically rejected, but are approved following manual review, are categorized as medium risk.

• High Risk: applicants rejected either by the automated system or on manual review represent the riskiest segment and are not serviced by the Company under the PL product.

Section 7 – Determination of Interest Rate and Charges 

The Company’s pricing reflects its cost of funds, operating and technology costs, and a risk premium that varies with the applicant’s risk category under Section 6 – lower-risk customers are ordinarily offered a lower rate than higher-risk customers, within the band below. The rate applicable to a specific customer, and all fees and charges, are disclosed to the customer in the Key Fact Statement (“KFS”) before the loan is executed, and form part of the Annual Percentage Rate (APR)/all-in-cost of the facility.