- Introduction
The Credit Policy of Yuvaraj Finance Private Limited outlines our approach to loan eligibility, risk evaluation, credit assessment, and approval processes. It serves to ensure compliant and responsible lending practices aligned with regulatory standards and internal risk management frameworks.
- Objectives
The primary objectives of the Credit Policy are to:
- Maintain consistent credit assessment standards.
- Minimize credit risk through prudent evaluation criteria.
- Ensure transparent decision-making and regulatory compliance.
- Safeguard customer data privacy in all loan transactions.
- Scope
This policy applies to loan products offered by Yuvaraj Finance Private Limited through Digital Lending Applications and is to be read in conjunction with Annex 1, which is an integral part of this Policy, and with related policies, including the Fair Practice Code, Privacy Policy, Grievance Redressal Policy, Interest Rate and Charges Policy, and others.
- Eligibility Criteria for Loan Approval
To approve a loan, the following must be met:
- A completed loan application form with all required data.
- A credit report fetched from an RBI-approved Credit Information Company.
- Aadhaar XML data obtained through Digilocker, or alternate documents as stipulated.
- Verification through the NSDL database.
- KYC Requirements
5.1. Mandatory Documents:
- Aadhaar XML from Digilocker.
- Verified PAN number.
- Self-photo for identity validation.
5.2. Optional Documents:
- Aadhaar and PAN card photos (where required for validation).
- External Data Requirements
The following data is essential for credit evaluation:
- Credit report for all applicants.
- Verification of the applicant’s bank account.
- Customer De-duplication
Duplicate customer profiles are identified and restricted based on:
- Mobile Number: Used as a unique identifier.
- PAN and Aadhaar: Ensuring a single profile per identification document.
- Risk Assessment Metrics
- Debt-to-Income (DTI) Ratio: Calculated as (Requested Loan Amount) / (Income Estimate).
- Income Estimate: Based on declared income or other suitable metrics.
- Loan Rejection Criteria
Loan applications will be declined if any of the following conditions apply:
- Duplicate profiles based on PAN.
- DTI exceeds 100%.
- Declared income falls outside specified limits.
- Age limits not met.
- Existing outstanding balance from previous loans.
- Insufficient time lapse since last approved application (3 days for new applicants).
- Applicant is blacklisted.
- Credit score is above the internal cutoff.
- Adverse credit report findings (e.g., DPD exceeds allowable thresholds).
- Mandatory KYC documents are not uploaded.
- Inconsistencies in applicant data (e.g., Aadhaar or PAN name mismatch).
- Non-verification or issues with provided PAN or Aadhaar photos.
- Compliance and Review
This policy will be reviewed periodically to align with regulatory updates and evolving business needs. Changes to policy and credit criteria will be communicated as needed.
- Appendices
Appendix 1, which provides a more detailed procedures for specific cases, forms an integral part of this Policy.
APPENDIX 1: CREDIT POLICY FOR LOANS VIA DIGITAL LENDING APPLICATIONS
1. Policy tenets
To approve a loan the following is required:
- Loan application filled in and submitted with all data items needed to evaluate criteria enumerated in this document
- Credit bureau report is fetched from RBI-mandated credit bureau
- Aadhaar XML data is fetched from Digilocker
- In case of failed XML data fetch photos of optional documents are provided
- PAN is verified in NSDL database via third-party vendor
- None of the rejection criteria from section “Rejection rules” is met
2. Required KYC documents
Obligatory documents:
# | Item | Remarks |
1 | Aadhaar XML from Digilocker | To be fetched online in cpu-cpu mode |
2 | PAN number verification result | To be fetched online in cpu-cpu mode |
3 | Self-photo | To be uploaded during loan application filing |
Optional documents:
# | Item | Remarks |
1 | Aadhaar card photo | To be uploaded during loan application filing |
2 | PAN card photo | To be uploaded during loan application filing |
3. Required external data
# | Item | Remarks |
1 | Credit report | To be fetched online in cpu-cpu mode |
2 | Bank account verification | To be fetched online in cpu-cpu mode |
Credit reports to be fetched for all applications prior to approval. Credit report fetch is optional for applications to be rejected on criteria not related to credit report.
4. Customer de-duplication
Mobile phone number is to be used as de-duplication key during profile creation. A new profile cannot be created if there is already a profile with the same mobile phone number.
The same PAN and Aadhaar numbers cannot be used on more than one customer profile and are checked for duplicates during loan application filing.
5. Risk input formulas
# | Item | Formula | Remarks |
1 | DTI | (Requested loan amount)/(Income estimate) | |
2 | INCOME_ESTIMATE | DECLARED_INCOME |
6. Rejection rules
REJECT if any of the conditions are TRUE.
# | Rule | Remarks |
1 | There already exists other customer profile with same PAN number | Checked in the app during data entry |
2 | DTI > 100% | |
3 | INCOME_ESTIMATE < 1000 | |
4 | INCOME_ESTIMATE > 100000 | |
5 | AGE < 19 | |
6 | AGE > 120 | |
7 | OUTSTANDING_BALANCE>0 | There are unpaid loans in |
8 | Time since last approved application < 3 days | Not applicable to new (first time) customers |
9 | Customer profile is blacklisted | |
10 | Value of the application credit score is above cut-off point | |
11 | Current maximum DPD of active loans reported in the credit report is:
a. Higher than 30 days for new customers b. Higher than 15 days for repeat customers |
|
12 | One of the obligatory KYC documents is not uploaded/fetched | PAN, Aadhaar card photos are not required if Aadhaar XML is present |
13 | Name on Aadhaar is different than customer’s name | Degree of spelling difference is allowed, subject to UW staff decision in each case |
14 | Name on PAN is different than customer’s name | Degree of spelling difference is allowed, subject to UW staff decision in each case |
15 | Father’s name on Aadhaar is different than the one entered by the customer | Not applicable if there is no father’s name on Aadhaar card
Degree of spelling difference is allowed, subject to UW staff decision in each case |
16 | Father’s name on PAN is different than the one entered by the customer | Degree of spelling difference is allowed, subject to UW staff decision in each case |
17 | PAN number is verified as non-existent or disabled | |
18 | Face in Aadhaar XML is different than the self-photo | |
19 | Face on Aadhaar card is different than the self-photo | If Aadhaar card photo is provided |
20 | Face on PAN card is different than the self-photo | If PAN card photo is provided |
21 | Customer bank account is verified as non-existent or disabled | |
22 | Prior loan applications with self-photo of same person but from different customer profile exist |
APPENDIX 2: APPROVAL PROCESS
