Code of Conduct

Introduction

The business of Artha Solutions Pte Ltd (“Company”) is to enable credit delivery to Small and Medium Enterprises, also known as SMEs (“Borrower”) from lending institutions including banks (”Lender Bank(s)”). This will be done using an innovative technology led platform which ensures credit delivery using proprietary, unique functionalities to unlock financing for SMEs and create value for lenders while reducing risks and costs for all.

The Company's business will be conducted in accordance with prevailing statutory and regulatory requirements in each jurisdiction where it operates, with due focus on global and local regulations, customer-orientation and corporate governance principles.

Accordingly, the Board of Directors have adopted a Code of Conduct for Artha Solutions Pte Ltd. (“Company”).

Key Considerations

This Code of Conduct has been adopted based on the guidelines provided by Monetary Authority of Singapore (“MAS”), the Fair Practices Code circulars issued by Reserve Bank of India (“RBI”) and the Responsible Lending Code issued by the Digital Lending Association of India(“DLAI”). The Company shall also adhere to the relevant guidelines issued by relevant regulatory bodies in the jurisdictions in which it intends to operate.

The key elements of the policy and processes are as detailed in the below paragraphs
  1. Commitment to Borrower(s)
    1. The Company commits to act fairly and reasonably in all dealings with Borrower(s), who obtain loans through its platform, by ensuring that services offered by it meet relevant laws and regulations of respective jurisdictions.

    2. The Company shall provide Borrower(s) with adequate clarity about the services offered through the platform, terms and conditions, documents needed from the Borrower to process loan applications, rates, charges and other fees applicable etc.

    3. The Company will keep the Borrower informed of changes in terms and conditions as and when applicable. Such intimations may be communicated through internet – including email and notifications on website.

    4. The Company shall not discriminate any Borrower on the basis of race, caste, religion, gender, marital status or disability. The Company shall ensure that all advertising and promotional material displayed on its website is clear and not misleading.

  2. Privacy and confidentiality
    1. The Company has in place a consent-based architecture for data capture with informed consent provided by the Borrower based on explanation of the data being captured and used (including sharing of such data with third parties). The Company shall preserve such digital records of Borrower consent(s) as proof of informed consent.

    2. All personal information of Borrower(s) shall be treated as private and confidential and shall be guided by the following principles and policies. The Company shall not reveal information or data relating to Borrower accounts, whether provided by the Borrower(s) or otherwise, to anyone, including other companies except in the following exceptional cases:
      1. If the information is to be given by law;
      2. If there is a duty towards the public to reveal the information;
      3. If the Company’s interest require it to give the information to a specific person or entity
      4. If the Company requires it to share with other associates, partners and third party for purposes of rendering effective services by the lending platform including credit scoring, lending and repayment behaviour, financial statements and other relevant data (to be read together with the Company’s Privacy Policy)
      5. If the Borrower requests the Company to reveal the information, or the information can be given with the Borrower’s permission;
      6. The Company shall not use Borrower’s personal information for marketing purposes unless the Borrower authorizes it to do so.

    3. When a Borrower requests for a loan through the Company’s platform and the Company wishes to undertake a credit check on the Borrower through a Credit Reference Agency, Company shall:
      1. Inform the Borrower when Company may pass his/ her account details to credit reference agencies and the checks Company may make with them. Such intimation to the Borrower shall be made at the time of processing the loan application;
      2. Company may give information to credit reference agencies about the personal debts the Borrower owes to it if;
        1. The Borrower has fallen behind with his/ her payments;
        2. The amount owed is not in dispute;
        3. The Borrower has not made proposals that the Company is satisfied with, for repaying his/ her debt, following Lender Bank’s demand;
      3. The Company may give credit reference agencies other information about the Borrower’s account if the Borrower has given them his/ her permission to do so;
      4. A copy of the information given to the credit reference agencies shall be provided by the Company to a Borrower, if so demanded.

  3. Know Your Customer (KYC) guidelines
    1. The Company shall carry out due diligence as required under “Know Your Customer” guidelines of the Company before processing of a loan request based on the following guidelines :
      1. Ask the Borrower to submit or provide necessary documents or proofs to do so;
      2. Obtain only such information that will help to meet with Company’s KYC, Anti Money Laundering or any other statutory requirements. In case any additional information is asked for, it will be sought separately.
      3. Provide the account opening forms and other material to the Borrower. The same shall contain details of essential information required to be furnished and documents to be produced for verification and/ or for record for meeting the KYC requirements.


  4. Quality and integrity of the credit scoring process
    1. The credit scoring methodology adopted by the platform is rigorous, systematic and can be subjected to objective evaluation based on historical experience and back testing.

    2. The credit score generated by the platform will be based on pre-determined rules established in the credit risk engine. Any manual revision in the credit score will be subjected to formal assessment and approval by the Company’s risk committee.

    3. The credit rating process is documented and appropriate training will be provided to every employee who will be involved in processing the credit scoring.

    4. Credit score of all Borrower(s) will be reviewed annually and monitored at regular intervals.

    5. Credit scoring methodology is proprietary to the Company and the Company is under no obligation to explain or provide clarifications on the credit score or methodology.

  5. Applications for loans and their processing
    1. Loan applications will be made directly with the Lender Bank who have referred the Borrower(s) to the Company’s platform. The Lender Bank will provide the Borrower(s) with its own standardized loan application forms and terms of the loan including interest rates, repayment obligations etc. so that the Borrower can make an informed decision.

    2. The loan application form may also indicate the documents required to be submitted along with the application form. Preferably, all particulars required for processing the loan application shall be collected by the Company at the time of application. However, where it needs any additional information, the Borrower would be contacted by the Company and provided the rationale while requesting the additional information by the Company staff.

  6. Loan Appraisal and Terms/Conditions
    1. Loan applications will be considered and appraised as per the Company’s appraisal norms and accordingly the assessment report will be provided to the Lender Bank(s). The decision on loan approval will be taken by the Lender Bank and not by the Company. Once the loan application has been approved by a Lender Bank on the platform, the Company shall convey the approval through an email or through the website or other appropriate means.

  7. Regulation of fees and other payments charged by the Company
    1. The Company shall lay down appropriate internal principles and procedure in determining processing fees, service charges, penalties and other charges payable by the Borrower.

  8. Clarification regarding repossession of hypothecated assets financed by the Lender Bank(s) on the Company’s platform
    1. The loan documents issued to the Borrower by the Lender Bank or by the Company on behalf of Lender Bank(s) shall have a built-in re-possession clause which must be legally enforceable. To ensure transparency, the terms and conditions of the contract/loan agreement of the Lender Bank should also contain provisions regarding:
      1. The notice period before taking possession by the Lender Bank;
      2. The circumstances under which the notice period can be waived;
      3. The procedure for taking possession of the security / asset by the Lender Bank;
      4. A provision regarding final chance to be given to the Borrower for repayment of loan before the sale/auction of the security / asset by the Lender Bank;
      5. The procedure for giving repossession to the Borrower and
      6. The procedure for sale / auction of the property.

    2. A copy of such terms and conditions will be made available by the Lender Bank or the Company on behalf of the Lender Bank to the Borrower(s) by providing him/her a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement.

  9. Repayment of loans and Collection of dues
    1. The Company does not engage in any collection proceedings against the Borrower. However, the Company may work with the Lender Bank in supporting the latter’s collection process.

    2. The Company has a defined policy and process for tracking repayments. The process will involve reminding the Borrower about maturing loans and repayments due by sending him/her notice via email, sms or notification on website.

  10. Dealings with Guarantors
    1. When an individual is to be a guarantor to a loan, he/ she should be informed by the Lender Bank about:
      1. His/her liability as guarantor;
      2. The amount of liability he/she will be committing him/herself to the Lender Bank;
      3. Circumstances in which Lender Bank will call on him/ her to pay up his/ her liability;
      4. Whether the Lender Bank has recourse to his/her other monies in the Company if he/she fail to pay up as a guarantor;
      5. Whether his/her liabilities as a guarantor are limited to a specific quantum or are they unlimited; and
      6. Time and circumstances in which his/her liabilities as guarantor will be discharged as also the manner in which the Lender Bank or the Company on behalf of the Lender Bank will notify him/ her about this.

  11. General
    1. The Company shall adhere to all applicable laws and regulations concerning financial services and consumer protection and all directions, guidelines, circulars and notifications issued by the relevant regulatory bodies in the jurisdictions in which it operates.

    2. The Company shall refrain from interference in the affairs of the Borrower except for the purposes provided for in the terms and conditions of the loan agreement (unless new information, not earlier disclosed by the Borrower, has come to the notice of the Company).

  12. Wide Dissemination and Periodic Review
    1. The Company shall put the above Code of Conduct outlined hereinabove on its website, for the information of various stakeholders.

    2. The Company will also review and refine the Code periodically, as may be required, based on its own experience and fresh guidelines, if any, issued by the regulatory authorities of the jurisdictions in which it operates.

  13. Borrower Complaints & Grievances
    1. The Company has established a Grievance Redressal Mechanism. A borrower can raise a complaint or express their dissatisfaction of the company service by any method listed below:

      Email us the borrower issues at contact@arthacredit.com

      The Borrower should clearly understand that the Company can only address grievances within its control and those that emanate out of the services provided by the Company and not that of the Lender Bank or any third-party service provider.