Demand and Call Loan Policy
1. Background:
Angel Fincap Private Limited (the “Company”) is a Base Layer Non-Banking Financial Company (NBFC) registered with and regulated by the Reserve Bank of India (RBI). Classified as an Investment and Credit Company (ICC), it is engaged in providing a range of financing solutions to both corporates and individuals.
The company being an Investment and Credit Company is engaged in Lending and investment activity. However, it is primarily engaged in providing Loan Against Shares to the retail clients (both individuals and corporates) and engages in investment activities in mutual funds, NCDs, etc. to manage its liquidity position.
This policy is prepared in line with the requirements prescribed by Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025 and various RBI notifications / directions ["RBI Regulations"] issued in this regard
2. Objectives:
The objective of this policy is to establish clear and transparent guidelines for granting, managing, and reviewing demand and call loans by the company. The policy ensures that all demand and call loans granted by the company are in line with the regulatory requirements set by the Reserve Bank of India (RBI) and other relevant authorities. Additionally, it aims to establish internal controls for loan approval, interest rates, repayments, periodic reviews, and roll-overs. This policy will also help mitigate risks related to liquidity and credit quality while maximizing operational efficiency and compliance.
3. Scope:
The objective of this policy is to lay down a broad framework for the Demand / Call Loans provided by the Company with respect to following specific parameters:
3.1. Period of loan during
3.2. Sanction authority
3.3. Performance Review
3.4. Roll-Over of the facility
3.5. Terms of Repayment
3.6. Income Recognition, Asset Classification & Provisioning
3.7. Collaterals
A Detailed summary of the terms of the facility shall be provided in the Key Fact Statement ("KFS") / Sanction Letter and Agreement.
4. Definitions:
The definitions provided hereunder are for reference only. Definitions provided by Reserve Bank of India, as amended from time to time, shall supersede the definitions provided hereunder:
4.1. Companies in the Group – It includes an arrangement involving two or more entities related to each other through any of the following relationships:
Subsidiary – parent (defined in terms of AS 21), Joint venture (defined in terms of AS 27), Associate (defined in terms of AS 23), Promoter-promotee (as provided in the SEBI (Acquisition of Shares and Takeover) Regulations, 1997) for listed companies, a related party (defined in terms of AS 18), Common brand name, and investment in equity shares of 20% and above.
4.2. Cut-off date- it shall refer to a date specified in the loan/credit facility agreement within which the company shall review the performance and continuation of the demand call loan/credit facility, including consideration of renewal, roll-over, modification or decision to recall the loan, in whole or part. In case nothing is determined, the date shall represent the date at the end of the stipulated period.
4.3. Digital Lending Application- Mobile and/or web-based applications, on a standalone basis or as a part of suite of functions of an application with user interface that facilitate digital lending services. DLAs shall include applications of the RE as well as those operated by Lending Service Provider (LSP) engaged by the company for extending any credit facilitation services in conformity with extant outsourcing guidelines issued by the Reserve Bank.
4.4. Demand / Call Loan – It means a loan/credit facility that a lender can require to be repaid in full at any time.
4.5. Stipulated Period – It is the period within which the Demand / Call would be made for repayment.
4.6. Standard Asset – It shall mean the asset in respect of which, no default in repayment of principal or payment of interest is perceived and which does not disclose any problem or carry more than normal risk attached to the business.
4.7. Non-Performing Asset (NPA) – It shall mean:
a. an asset, in respect of which, interest has remained overdue for a period of more than 90 days.
b. a term loan inclusive of unpaid interest, when the instalment is overdue for a period of more than 90 days or on which interest amount remained overdue for a period of more than 90 days.
c. a demand or call loan, which remained overdue for a period of more than 90 days from the date of demand or call or on which interest amount remained overdue for a period of more than 90 days.
d. a bill which remains overdue for a period of more than 90 days.
e. the interest in respect of a debt or the income on receivables under the head 'other current assets' in the nature of short-term loans/advances, which facility remained overdue for a period of more than 90 days.
f. any dues on account of sale of assets or services rendered or reimbursement of expenses incurred, which remained overdue for a period of more than 90 days.
g. the lease rental and hire purchase instalment, which has become overdue for a period of more than 90 days
4.8. Sub-Standard Asset – It shall mean:
a. an asset which has been classified as non-performing asset for a period not exceeding 18 months;
b. an asset where the terms of the agreement regarding interest and / or principal have been renegotiated or rescheduled or restructured after commencement of operations, until the expiry of one year of satisfactory performance under the renegotiated or rescheduled or restructured terms.
4.9. Doubtful Asset – It shall mean:
a. a term loan, or
b. a lease asset, or
c. a hire purchase asset, or
d. any other asset,
which remains a sub-standard asset for a period exceeding 18 months.
4.10. Loss Asset – It shall mean:
a. an asset which has been identified as loss asset by the Company or its internal or external auditor or by RBI during the inspection of the Company, to the extent it is not written off; and
b. an asset which is adversely affected by a potential threat of non-recoverability due to either erosion in the value of security or non-availability of security or due to any fraudulent act or omission on the part of the customer.
5. Period:
5.1. The Demand / Call Loan shall be sanctioned for a minimum of 3 days and a maximum of 1 year as per cut-off date specified in the agreement or sanction document.
5.2. The loans may be subject to roll-over as stated in the agreement post a review of parameters, laid down in the policy, by the credit team / rule engine of the application. The process for roll-over of loan shall be as mentioned in the loan agreement or as highlighted in the FAQ section of application.
5.3. In case no Demand / Call is made prior to the expiry of the stipulated period, the Loan shall be deemed to be demanded / called on such expiry/cut-off date. Necessary clauses empowering such demands / calls shall be incorporated in the Loan Agreements entered with customers
6. Sanctioning and Approval Process:
Since, the company is engaged in digital lending, a rule engine-based decision making shall run on back end of the Digital Lending Application. However, for offline cases sanctioning authority shall be as determined by the board in the credit policy.
6.1. A higher-level sanction approval shall be obtained depending on the size and risk profile of the loan, as laid down in the credit policy.
6.2. At the time of sanctioning any demand or call loan, a special approval of Board / Credit Head shall be required and the rationale for setting the repayment cut-off date, especially if the date exceeds one year from the loan sanction date shall be appropriately documented. This ensures that all decisions are backed by valid business justifications and maintain transparency.
6.3. In cases where cut-off date is beyond the loan tenure, the Board or designated authority will ensure that all terms and conditions of the loan, including the repayment date, are revisited periodically to ensure alignment with business objectives and liquidity considerations.
7. Cut-off Date:
A specific cut-off date will be set for each demand or call loan, within which repayment must be requested or called in the loan agreement. The company may send a communication through its application / email / offline / any other to call a loan within the cut-off date period. Post calling of loan, the customer shall be provided grace days as stated in the credit policy.
8. Interest Rate:
8.1. The interest rate on demand and call loans will be determined at the time of sanction based on market conditions, customer risk profile, and the company's cost of funds.
8.2. The rate of interest will be clearly documented in the loan agreement, sanction letter, and Key Fact Statement (KFS) along with an Annualized Percentage Rate (APR) as per the regulatory directions.
8.3. Interest Payment Frequency: Interest shall be payable either monthly, as agreed in the lending terms.
8.4. Penal Charges: In case of delayed repayment or any other breach of Material Terms and Conditions, a one-time penal charge will be charged as per the List of Penal Charge as disclosed on its website / application and agreed in the KFS.
9. Performance Review:
All demand or call loans exceeding six months must be reviewed before the end of the sixth month. The review process will include:
9.1. Credit Risk Assessment: Evaluation of the customer's creditworthiness and financial position.
9.2. Collateral Valuation: Assessing the current value of the collateral and any risks associated with it.
9.3. Liquidity Management: Ensuring that continued funding remains feasible and does not adversely impact the company's liquidity position.
9.4. Actions Based on Review:
a. If performance is unsatisfactory, the company may decide to demand repayment or take corrective actions.
b. A satisfactory review is mandatory for any loan roll-over or roll-over.
10. Roll over:
The Demand / Call loans shall be reviewed to decide on whether it should be fully / partially Rolled-Over or Demanded / Called on end of expiry period upon request of the borrower.
Roll-Over shall be offered only if:
10.1. Interest payment has satisfactory performance
10.2. Collateral Value, if any, is sufficient for the current loan or additional collateral is provided
10.3. Credit Risk pertaining to the Customer has not increased since the last sanction/ review of the loan.
10.4. Regular Performance Review has provided satisfactory result
At least 7 days prior to the end of the stipulated period, the customer shall apply for rollover of the facility through dedicated section in the Website / E-mail / physical / extension option on app). The company shall refrain from enhancing the credit limit of the customer without their information and consent. However, may consider Top-up request made through app / website / email / physically / other means of communication
On roll-over, the Demand / Call loan shall be continue under the existing new demand / call loan agreement, although it may continue under same customer / loan account number. At the time of roll-over, the terms of the loan including pricing, tenor, and collateral may be renegotiated and agreed in writing between the Company and the borrower.
In case, the terms of loan are renegotiated a fresh KFS with revised terms may be issued to the customer, although renewal shall continue under the existing loan agreement.
11. Repayment Terms:
11.1. Repayment on Demand: The outstanding amount (as defined in the loan agreement) must be repaid upon demand by the company or at the end of the stipulated period.
11.2. Discretion to Demand: The company may demand repayment at any time without giving reasons.
11.3. Early Repayment: Customers may repay the loan before the stipulated period without penalty unless agreed and part of terms and conditions i.e. no pre-payment charges.
11.4. Demand Procedure: The mode and authority for issuing repayment demands will be documented and followed consistently.
11.5. Penal Charges: If repayment is not made within the stipulated timeline, penal charges will be applied. Day end procedure shall be displayed on website / application for customer education to ensure customer can avoid penal charges
11.6. Prepayment Facility: Customers may prepay the loan, subject to charges outlined in the lending agreement or KFS.
12. Income Recognition, Asset Classification, and Provisioning:
12.1. Income recognition on Demand and call loans classified as Non-Performing Assets (NPA) will be accounted for on a receipt/realization basis.
12.2. Asset Classification and Provisioning: This will be in accordance with RBI guidelines and the company's NPA policy.
12.3. The company's Liquidity Risk Management system will treat NPAs as illiquid assets, impacting liquidity planning.
13. Collaterals:
The Company shall ensure that adequate Collaterals have been taken for Secured Demand / Call Loans and necessary documentation / reporting has been affected before disbursement / roll-over. The Company shall regularly monitor the collaterals in terms of its Loan to Value ratio to be maintained, risks relating to volatility in its value, etc. The Company shall, on satisfactory repayment of loan, release the collaterals promptly as per the Fair Practice Code adopted.
14. Exception Handling:
The policy shall always be updated with extant regulatory provisions. However, in case of conflict between the Policy and regulations, the regulatory provisions shall always supersede the policy.
The updated policy shall be adhered at all the times and exceptions if any to the policy shall be approved by the board of directors after recording a reason in writing.
15. Adoption, Effective Date and Review:
This policy has been adopted vide resolution of the Board of Directors of the Company dated ______________. This policy shall be applicable organization wide with effect from _____________. This policy shall be reviewed by the Board of Directors on atleast an Annual basis.