Loan Repayment and Settlement Policy

1. Objective

This policy governs the repayment and settlement norms of the Insta Loan product designed for short-term requirements with a tenure of 7 to 45 days.

The objective is to ensure timely recovery, transparent settlement processes, and responsible credit behavior while accommodating legitimate borrower constraints.

2. Scope

Applies to all Personal loans issued under the Insta Loan scheme with a tenure of 7 to 45 days. It includes:

• Repayment terms
• Early repayment
• Delay and delinquency handling
• Compromise settlement provisions
• Procedures in case of death
• Reporting obligations

3. Repayment Terms

• Tenure: 7 to 45 days from Loan start Date
• Mode of Repayment: Single bullet repayment
• Repayment Method: NACH mandate, post-dated cheque, or auto-debit
• Due Date: Specified in the sanction letter and repayment schedule

4. Early Repayment / Pre-closure

• Allowed at any time within the loan tenure
• No prepayment penalties for early closure within 7-45 days unless specified in the sanction
• Must be settled in full; part payments are generally not permitted unless in special cases with approval

5. Delinquency and Penalty Handling

EMI Bounce / Repayment Failure

• Any repayment failure must be investigated via Telephonic Verification Report (TVR)
• Proper written or recorded clarification must be obtained from the customer
• Multiple bounce instances may lead to legal recovery action or ineligibility for future credit

Late Payment Interest

• 2% per month interest on overdue amount
• Applies from the day after the due date till the full recovery
• Calculated on a daily basis

6. Full and Final Settlement (Compromise Settlement)

Eligibility

Genuine financial distress, including:

• Sudden business cash flow disruptions
• Medical emergencies
• Natural calamities impacting business continuity

A Fund/Reserve must be created for all such settlements, with the principal amount written off from Capital / Reserve and Surplus accounts as per financial governance norms.

7. Borrower's Death

In case of the borrower's death within loan tenure:

• Legal heirs may request for closure via settlement

8. Legal Recovery

• Non-cooperative or fraudulent cases may be referred for legal action immediately after the due date grace period
• Legal settlements must go through the Legal & Recovery Team
• Settlement amounts and payment timelines to be recorded in recovery logs

9. Documentation Required for Any Settlement

• Settlement request letter
• Proof of hardship (if applicable)
• Internal approval note
• Closure confirmation

10. Credit Bureau Reporting

• All loans settled, closed, or written-off are to be reported to Credit Bureaus within 15 calendar days
• Reporting includes settlement status, overdue duration, and payment remarks

11. Compliance & Governance

• All settlements and processes must adhere to regulatory guidelines (e.g., RBI, NBFC norms)
• Periodic audit and MIS tracking of delinquency trends