Colending Policy

1. Introduction

The Reserve Bank of India (“RBI”) vide Reserve Bank of India (Non-Banking Financial Companies – Transfer and Distribution of Credit Risk) Directions, 2025 (RBI/DOR/2025-26/352 DOR.STR.REC.271/21.04.048/2025-26) dated November 28, 2025 (“Directions”) has laid down a framework for the Co-Lending Arrangements between regulated entities under Part B of the Directions.

Respo Financial Capital Private Limited (“Company”) is a non-deposit taking Non-Banking Financial Company registered with the Reserve Bank of India, engaged in the business of digital personal lending. The Company intends to leverage Co-Lending Arrangements (CLAs) with banks and other regulated entities to scale its credit operations and efficiently distribute its resources. The Directions provide that the NBFCs shall frame a policy for governing the Co-Lending Arrangements (CLA) with other regulated entities. Accordingly, the Board of Directors of the Company has approved and implemented this Co-Lending Policy (“Policy“) outlining the operational framework for such arrangements. It is hereby clarified that under this Policy, the Company shall participate in Co-Lending Arrangements solely in the capacity of an Originating RE, and shall not assume the role of a Partner RE in any CLA with another regulated entity.

2. Definitions

For the purposes of this Policy, the words referred shall carry the following definitions:

a)“Co-Lending Arrangement (CLA)” shall mean an arrangement, formalised through an ex-ante agreement, between the Originating RE and the Partner RE, to jointly fund a portfolio of loans, in a pre-agreed proportion, involving revenue and risk sharing.

b)“Regulated Entity/RE” shall mean an entity under the purview of the regulatory framework of the RBI such as banks and non-banking financial companies.

c)“Originating RE” shall mean the Regulated Entity that inter alia, sources, appraises, originates and services the loans under the For the purposes of this Policy, the Originating RE shall be the Company.

d)“Partner RE” shall mean a Regulated Entity that co-lends and funds the loan originated by the Originating RE.

e)“Co-lending Partner/s” shall mean the Originating RE and the Partner

f)“Master Agreement (MA)” shall mean the co-lending master agreement executed between the Company and the Partner RE governing all CLAs between them.

g)“Default Loss Guarantee (DLG)” shall mean a contractual arrangement, called by whatever name, between the Partner RE and the Originating RE or any other entity, under which the latter guarantees to compensate the Partner RE, for the loss due to default up to a certain percentage of the loan portfolio of the Partner RE, specified Any other implicit guarantee of similar nature, linked to the performance of the loan portfolio funded by the Partner RE and specified upfront, shall also be covered under the definition of DLG.

h)“CIC” shall mean the companies that have been granted a certificate of registration under section 5 of the Credit Information Companies (Regulation) Act, 2005.

i)“SMA/NPA”: “Special Mention Account”/”Non-Performing Asset” shall mean the Special Mention Account / Non-Performing Asset, classified per RBI’s extant prudential norms for

3. Objective

The objective of this Policy is to establish a Board-approved framework for the Company’s participation in Co-Lending Arrangements as an originating RE, in compliance with the Directions and other applicable guidelines. The Policy aims to facilitate scalable loan origination through the Company’s digital platform and customer reach while enabling access to funding from Partner REs. It further sets out the governance, operational, risk management, compliance, and borrower protection framework applicable to all CLA activities, including disclosures, grievance redressal, due diligence of the Partner RE, DLG governance etc.

4. Eligibility and Scope

This policy applies to all Co-Lending Arrangements in relation to personal loans originated through the Company’s digital platform, with banks, NBFCs and such other Regulated Entities as may be prescribed under the Directions.

The CLA hereunder shall continue to be governed by Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025 dated November 28, 2025 as amended from time to time. The Co-Lending Partners shall ensure compliance with the aforesaid directions.

Under the Co-Lending Arrangement, the Originating RE and the Partner RE shall jointly contribute funds for each facility under the CLA. The Originating RE and the Partner RE shall conduct proper due diligence as per its respective policy prior to sanctioning of the credit facility to any borrower. Each Co-lending Partner shall maintain each individual borrower’s account to the extent of their respective exposures under such loan.

5. Agreement between the Co-lending Partners:

a)The terms of the CLA shall be clearly stipulated under a Master Agreement between the Co-lending Partners.

b)The Master Agreement shall include detailed terms and conditions of the arrangement including:

c)Lending service shall refer to the set of activities related to lending such as customer acquisition, underwriting, pricing, servicing, monitoring, and recovery of specific loan or loan portfolio, etc. performed by the REs or their agents (in conformity with extant outsourcing guidelines issued by the Reserve Bank of India).

d)The Master Agreement shall be reviewed at least annually, or earlier upon any material regulatory change, to ensure continued alignment with regulatory requirements and business objectives of the Co-lending Partners.

e)The loan agreement signed with the borrower shall make an upfront disclosure regarding the segregation of the roles and responsibilities (such as sourcing, and servicing) of each concerned REs, including clear identification of the entity being the single point of interface with the such borrower. Any subsequent change in customer interface shall only be done after prior intimation to the The loan-agreement shall also appropriately disclose suitable provisions related to customer protection, and grievance redressal mechanism.

f)All required details of CLA shall be disclosed appropriately to the concerned borrower as laid down on ‘Key Facts Statement (KFS) for Loans & Advances’ under Reserve Bank of India (Non-Banking Financial Companies-Responsible Business Conduct) Directions, 2025 dated November 28, 2025.

g)The co-lending partners shall adhere to the applicable accounting standards, while booking of unrealised profit under CLAs, if However, such profits, shall be deducted from CET 1 capital or net owned funds for meeting regulatory capital adequacy requirement till the maturity of such loans.

6. Operational Framework

a)Each Co-lending Partner under a CLA shall be required to retain a minimum 10 per cent share of the individual loans in its books.

b)The Originating RE shall undertake the following activities:

c)The CLA shall entail an irrevocable commitment on the part of partner RE to take into its books, on back to back basis, its share of the individual loans as originated by the Originating

d)The CLA shall ensure that the respective shares of the REs are reflected in the books of both REs without delay after disbursement by the originating RE to the borrower, in any case not later than 15 calendar days from the date of disbursement.

e)The Company shall also ensure that it transfers the loan under CLA only to the partner RE, as per the ex-ante agreement and as specified in the KFS at the time of sanction of loan.

f)If the Company is unable to transfer the share of the exposure to the partner RE under CLA within 15 calendar days for any reason, then the loan/s shall remain on the books of the Company and can be transferred to other eligible lenders only under the provisions of Part A of the Directions.

g)Each Co-lending Partner shall maintain a borrower’s account individually for its respective

h)The loans under the CLA shall be included in the scope of internal/ statutory audit by each Co-lending Partner to ensure adherence to their respective internal guidelines, terms of the agreement and applicable regulatory requirements.

i)The Co-lending Partners shall implement a business continuity plan to ensure uninterrupted service to their borrowers till repayment of the loans, in the event of termination of CLA between the Co-lending Partners.

7. KYC:

The Co-Lending Partners shall comply with the prescribed norms under the Reserve Bank of India (Non-Banking Financial Companies – Know Your Customer) Directions, 2025 dated November 28, 2025, as amended from time to time and any other applicable regulation as stipulated by the RBI. KYC cannot be outsourced and both the Originating RE and the Partner RE, at their option, may rely on KYC documents shared / customer due diligence done by the other lender, subject to conditions, specified by RBI in the said KYC Directions.

8. Escrow Mechanism:

a)The disbursements and repayments under the CLA shall be processed through an escrow mechanism to ensure transparency and clear segregation of funds and timely reconciliation between the Co-lending Partners.

b)Accordingly, all transactions (disbursements / repayments) between the REs, as well as with the borrower, shall be routed through an escrow account maintained with a The Master Agreement shall clearly specify the manner of appropriation between the Co-lending Partners.

c)The Co-lending Partners shall ensure compliance with the extant regulatory directions and guidelines including Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025 dated November 28, 2025 and Reserve Bank of India (Non-Banking Financial Companies – Managing Risks in Outsourcing) Directions, 2025 dated November 28, 2025.

9. Interest Rate and Other Fees/ Charges

a)The interest rate and any other fees / charges on the underlying loans charged to the borrower shall be based on the contractual agreement, subject to the regulatory norms applicable to the CLA. Specifically, the final interest rate charged to the borrower shall be the blended interest rate which is calculated as an average rate of interest derived from the interest rates charged by respective REs, as per their internal lending policies and risk profile of the same or similar borrower, weighted by the proportionate funding share of concerned Co-lending Partner under CLA.

b)Any change in rates by respective REs under CLA shall be made as per their credit policy and extant regulatory norms, and the same shall be reflected in the updated blended rate and communicated to the borrower.

c)Any fees / charges payable by the borrower such as processing fees in addition to the blended interest rate shall be allocated between the Co-lending Partners as per mutual agreement and shall be incorporated in computation of annual percentage rate (APR) and disclosed appropriately in the All other fees related to the loan shall be mutually agreed between the Co-lending Partners.

d)As part of the credit policy, the Company shall lay down the objective criteria for fees/ charges payable for lending services, depending upon relevant factors such as the nature of service provided, quantum of loan, Such fees/ charges shall not involve, directly or indirectly, any element of credit enhancement/ default loss guarantee unless permitted otherwise.

10. Reporting to credit information companies (CICs)

Each Co-lending Partner under the CLA shall comply with the applicable reporting requirements to Credit Information Companies (CICs) for their respective share of the loan account, in accordance with the Policy for Credit reporting adopted by the Board of directors as per Credit Information Companies (Regulation) Act, 2005, and Reserve Bank of India (Non-Banking Financial Companies – Credit Information Reporting) Directions, 2025 along with relevant Rules and Regulations issued by the RBI from time to time.

11. Default Loss Guarantee:

The Company may provide default loss guarantee up to five per cent of loans outstanding in respect of loans under CLA. Provision of such default loss guarantee shall be governed mutatis mutandis in terms of Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025 dated November 28, 2025 as amended from time to time .

The DLG amount shall be maintained as an earmarked provision and shall be deducted from the Net Owned Funds (NOF) of the Company for the purposes of computing regulatory capital adequacy, until the underlying loans are repaid or settled. The Board of Directors shall, on an annual basis, review the adequacy and continued appropriateness of any DLG commitments outstanding, with due regard to the Company’s capital position.

12. Asset Classification Norms

The Company shall apply a borrower-level asset classification for their respective exposures to a borrower under CLA, implying that if either of the REs classifies its exposure to a borrower under CLA as SMA / NPA on account of default in the CLA exposure, the same classification shall be applicable to the exposure of the other RE to the borrower under CLA. The Company shall put in place a robust mechanism for sharing relevant information in this regard on a near-real time basis, and in any case latest by end of the next working day.

13. Transfer of Loan Exposures:

Any subsequent transfer of loan exposures originated under CLA to third parties, or any inter-se transfer of such loan exposures by the Company, shall be strictly in compliance with the provisions of Part A of the Directions. Such transfers to a third party, however, can be done only with the mutual consent of both the Originating and Partner REs.

14. Disclosures:

a)In addition to the applicable disclosure requirements under extant regulations, the Company shall also prominently disclose on their website, a list of all active Co-Lending Partners, which shall be updated within 30 days of any addition to or exit from the list of such partners.

b)The Company shall also make appropriate disclosures in their financial statements, under ‘Notes to Accounts’, relating to necessary details of CLAs on an aggregate The details may inter alia include quantum of CLAs, weighted average rate of interest, fees charged / paid, broad sectors in which CLA was made, performance of loans under CLA, details related to default loss guarantee, if any, etc. The disclosure shall be done on annual basis or as applicable to the Co-Lending Partners.

15. Business Continuity Plan:

Notwithstanding the termination of the co-lending Master Agreement, the Co-Lending Partners agree and acknowledge that the servicing of the loan disbursed under the CLA shall continue to be rendered till each loan originated under the CLA is completely repaid or settled as per the terms agreed between the Co-lending Partners. The Company’s Business Continuity Plan (BCP) for CLA operations shall be documented, periodically tested (at least once a year), and shall be aligned with the requirements of the Reserve Bank of India (Non-Banking Financial Companies – Information Technology Governance, Risk, Controls and Assurance Practices) Directions, 2023, as amended from time to time. The BCP shall specifically address scenarios including technology failure of the origination/servicing platform, exit or default of the Partner RE, and data loss or breach affecting CLA loan accounts.

16. Grievance Redressal:

a)The Co-lending Partners shall comply with the applicable regulatory directions and the fair practice code as adopted by them and the grievance redressal mechanism as prescribed under such regulations.

b)In case the complaint registered by a borrower is not resolved by the Co-lending Partner/s within 30 days from the date of receipt, the borrower would have the option to escalate the same under the RBI’s Integrated Ombudsman Scheme (IOS) / Centralised Receipt and Processing Centre (CRPC), including the Customer Education and Protection Cell (CEPC) of the The Company shall ensure that its internal grievance redressal mechanism is compliant with the timelines and procedures mandated under the Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025 and shall maintain a complaint register tracking resolution timelines for all CLA-related complaints.

c)All complaints received from the borrower in relation to loans disbursed under the CLA shall be processed as per mutually agreed terms between the Co-lending Partners.

17. Policy Review

This Policy shall be reviewed at least once every financial year by the Board and may be amended, modified or revised from time to time in accordance with applicable laws, regulatory requirements and business needs. Any amendment, clarification, circular or direction issued by the RBI or any other applicable regulatory authority shall automatically apply to this Policy and prevail in case of any inconsistency, until the Policy is accordingly updated.