Light Microfinance Pvt. Ltd. (“Light”) displays client protection code in all of its branches and offices in vernacular language.

Light ensures that all its product and services are provided to eligible clients and are in compliance with RBI guidelines.

Light ensures that loan approval will be strictly based on client authenticity and repayment capacity and no discrimination will be done on the basis of caste, religion and race or social/political affiliation.

Light ensures that only relevant documents necessary for completion of transaction are collected and it is in compliance with RBI guidelines.

All products delivered by Light are based on the principles of Joint Liability of Group and all terms and conditions related to product and insurance linked with the product are communicated to the clients in vernacular language.

Light ensures that consent of the client are taken in all the cases.

Light ensures that proper due diligence is conducted and repayment capacity of client is analyzed before sanctioning of the loan.

In no circumstances, Light lends to a client who has indebtedness from two separate microfinance companies.

In no circumstances, Light allows to exceed the total debt limit of the client as mandated by RBI.

Field staff of Light strictly follows the code of conduct while interacting with clients.

Light provides receipt for every payment received from the borrower.

Light deals with all defaulter clients as per RBI guidelines.

Light does not collect shortfall in collection of clients from employees, except in the cases of proven fraud.

Light uses client information strictly for loan related transactions and it is disclosed to third party after due consent from the client or as a legal requirement.

Light informs the new client about its policies, procedures and grievance redressal mechanism in its client training program.

Policy Objective

The objective of this policy is to ensure that collection of loan installment and recovery of overdue is strictly as per company’s guidelines and is in compliance with RBI guidelines DNBR (PD) CC.No.047/03.10.119/2015-16 dated July 01, 2015. This policy also ensures that similar practices are deployed across all its branches to have smooth and timely recovery of dues and common practices to be followed in case of disputes.


For the purpose of Collection Policy client is defined as a person who has availed at least one of the loan products of the company.


Light strictly adheres to the repayment guidelines of RBI in dealing with clients during collection of dues.

Light ensures that all loan recoveries are made by its employees and no third party will engage in the process.

Light employees deputed for collection and recovery makes themselves visible by displaying identity card issued by Light at appropriate place during collection.

Light collects all loan installments in the center meeting except when client is absent in two consecutive center meetings, recovery is done at house or workplace of client.

Light gives acknowledgement of all money collected from its clients.

All communications related to collection of dues are made in vernacular language and copies of all documents are kept for record.

Light staff usually makes collection from clients between 0700 hrs to 1900 hrs. In some special circumstances might contact clients beyond this time frame and with due consent from the client.

Light ensures that client’s request for not contacting at particular time of a day is honored unless client is misguiding the staff with mala‐fide intentions.

Light employees are adhered to follow code of conduct and show professional behavior during collection of dues.

Light ensures that no employee will do harassment of any kind of its clients during collection. Thorough enquiry is done on receipt of such complaints and immediate action is taken if proved.

Light makes all efforts to resolve any disputes and differences related to repayment up to the satisfaction of clients.

Light initiates any legal action against client only after giving prior notice to client with sufficient time to resolve the issue.

Light encourages clients to pay installments on time and make them aware of benefits of timely payment and consequences of late payment and overdue.

Light strictly follows all procedures in collection of overdue.

Settlement of loan, if any is considered only after evaluating all the criteria related to it and with prior consent of the management.

Write‐off of any loan is as per the company’s write‐off policy.

Prepayment if any is only made at branch only after due approval from head office.


6.1. Collection during the normal course of Business

A day in advance Cash Disbursement Sheet (CDS) is generated for each field staff and BM/ABM verifies the CDS.

Field staff makes the collection at center meeting and gives acknowledgement by signing in each of the client’s loan schedule.

Center leader crosschecks the cash collected with loan schedule of clients and arrange it in denominations.

Field staff takes center leader signature on CDS after verification of cash collected.

After receiving the amount field staff updates the collection status in Light’s Mobile Application (Mobilight).

After making all collection as per CDS field staff deposits the amount with BM/ABM at branch at most by 1300 hrs.

In case any member is absent or not paying then other group members are required to contribute and make payment for the defaulter client.

Light might take action against the group members in case of non‐compliance for payment of installment of defaulter client.

6.2. Overdue collection

All loans whose installment is delayed by one day or more are overdue.

BM/ABM downloads the overdue list from MIS on a daily basis and plans the recovery action for each defaulting client, in compliance with company’s policies and procedures.

FE, BM, ABM, CM, AM and Operations ‐ Head are responsible for overdue recovery at different stages as mentioned in the following table along with the process followed at each stage:

Overdue Period Responsible Authority Action
  • Visit client, if possible along with center leader at client’s house or work place for collection.
  • Determine the reason for non‐repayment.
  • Request center leader to arrange the money from other group members as part of their liability.
  • Make them aware of the consequences of late repayment on them and the group.
  • Obtain verbal commitment from the client and record the discussion and report it to CM & AM.
  • Visit client, if possible along with center leader at client’s house or work place for collection.
  • Determine the reason for non‐repayment.
  • Request center leader to arrange the money from other group members as part of their liability.
  • Mutually agreed relaxation for time is given in case of disagreement between group members. Approval for it to be taken from Operations Head.
  • Make them aware of the consequences of late repayment on them and the group.
  • Obtain verbal commitment from the client and record the discussion and report it to the AM and Operations‐ Head.
  • Visit client along with center leader and other group members at client’s house or work place.
  • Make them aware of the consequences of late repayment on them and the group.
  • Demand the client to pay the money and make them aware of future legal action.
  • Request center leader to arrange the money from other group members as part of their liability.
  • First loan default letter in vernacular language will be served upon the client maximum by 15th day in front of all members and contents of the letter will read out in front of all the members.
  • Take receipt of letter (if issued) from the client and record the discussion and report it to the AM and Operations – Head.
16‐22 DPD FE,BM/ABM & CM
  • Visit client along with center leader and other group members at client’s house or work place.
  • Make them aware of the consequences of late repayment on them and the group.
  • Demand the client to pay the money and make them aware of future legal action.
  • Request center leader to arrange the money from other group members as part of their liability.
  • Second loan default letter in vernacular language will be served upon the client maximum by 22nd day in front of all members and contents of the letter will read out in front of all the members.
  • Take receipt of letter (if issued) from the client and record the discussion and report it to the Operations– Head.
23‐30 DPD FE,BM/ABM, CM & AM
  • Visit client along with center leader and other group members at client’s house or work place.
  • Make them aware of the consequences of late repayment on them and the group.
  • Demand the client to pay the money and make them aware of future legal action.
  • Request center leader to arrange the money from other group members as part of their liability.
  • First loan default letter in vernacular language will be served upon the client maximum by 15th day in front of all members and contents of the letter will read out in front of all the members.
  • Take receipt of letter (if issued) from the client and record the discussion and report it to the Operations– Head.
Post 30 days FE,BM/ABM, CM, AM & HO Operations Team
  • Visit Client along with center leader and other group members at client’s house or work place.
  • Ask the client and group members to pay the money and inform the client that company will send the legal notice after seven days in case of non‐ compliance.
  • After seven days company will send the legal notice to client clearly stating that if outstanding dues are not settled within the next fifteen days from the date of the issuance of the letter then company will file legal recovery petition.
  • Take receipt of letter (if issued) from the client and record the discussion and report it to the Operations– Head and Management Committee.

After recovery action the designated person reports to the branch and status of collection is updated in the MIS.

All documents related to recovery of overdue and behavior of client are maintained and kept on record at branch.

6.3. Settlement of loan

Light encourages the clients to repay the loan and make them aware of consequences of non‐repayment on them and other group members.

Light evaluates the defaulter client’s willingness to repay and repayment capacity before considering settlement. Final decision on settlement is taken by CEO and Operations Head.

Settlement is considered only as a last resort after all other possibilities for collection of overdue have been considered and exhausted.

Settlement of loan is client specific and criteria applicable to one client may not be applicable for other.

Light negotiates with the client to repay outstanding principal in exchange for a closure letter.

Settlement is only done at branch and in presence of BM/ABM and CM/AM.

Following criteria may be considered for selection of client with whom settlement can be made:

  • Clients willing to repay part of the loan as a one‐time payment and do not have the capacity to repay full loan outstanding.
  • Clients who are closing their business and are relocating to other place which is beyond the Light’s area of operation.
  • Clients with large outstanding and not having capacity to repay the loan.
  • Clients with small outstanding from whom cost of recovery is likely to be higher than overdue amount.

In all circumstances decision of management will be final.

6.4. Prepayment

Prepayment of loan is allowed only after consideration and approval by management.

6.5. Write‐off

Any write off is done only as per the procedures and guidelines given in Write‐off policy.


The following document serves to provide the details of grievance redressal mechanisms for customers and the procedure the employees at Light need to follow when such a complaint arises.

Mode of Complaints

Considering customer profile, their literacy level and vulnerability, LIGHT has identified various channels of sourcing customer complaints proactively.

Customer Enquiries / Complaints received at field

Customers can submit their written or verbal enquiries / complaints to any LIGHT staff who meets them at any forum such as center meetings, MGTs, GRTs and exit interviews, dedicated CGR phone number etc. These enquiries / complaints shall be forwarded to Branch Helpdesk for further follow up and resolution. If any complaints are received during center meeting visit then visitor should update the same in Center Meeting Checklist, in the Branch Helpdesk, which will investigate the issue with the assistance from CM’s/AM’s and provide resolution to customer.

Customer walk-ins at branches

Verbal Complaints – Nodal officers or contact persons at Branch will record the complaints and provides the solutions

Written Complaints – Customer can obtain Complaint Form (enclose format) and fill her complaint details (branch staff will assist if customer is not literate), deposit the same in the complaint box, provided in each Branch. All written complaint forms shall be sent to Complaint Resolution Officer thru post/courier, every week. Branches should keep copies of customer complaint forms for assisting the customer.

Customer Call-ins

Customer calls to CGR phone number – who will record the complaint, does follow ups and provides the resolution

Customer calls to Complaint Resolution Officer dedicated for collating the customer grievances– Customers can call or write to Grievance Redressal Officer to escalate their unresolved grievances

Whistle Blower

A Whistle blower is an LIGHT employee who gives complaint against a colleague who allegedly involved in prohibited activities and breaches code of conduct such as fraud, misappropriation of funds, unethical behavior, mistreatment of customers etc. A whistle blower would also be a customer who gives complaint against an employee or/and customer of LIGHT who allegedly involved in prohibited activities, mentioned above. In this regard, internal staff or customer of LIGHT can call Regional office or Dedicated Whistle blower in charge and submit their complaint. Investigations will occur and appropriate actions will be taken. (Caller name will be kept confidential if requested)

However, the caller should have enough evidence on correctness of the customer grievance and should avoid raising unrealistic complaints. A whistle blower reporting unrealistic complaints shall not be punished if the complaint was raised with good intention and if there enough grounds to suspect a colleague. A staff reporting unrealistic complaints with a bad intention/motivation is liable to receive a disciplinary action i.e. oral warning on first instance and a written warning in case of repetition.

External Complaints

Complaints received from (on behalf of customer or on the basis of public interest) general public & other stake holders such as Govt agencies, RBI, police, lawyers, industry ombudsman (MFIN & SAADHAN etc) & social activists will also be recorded at branch level and provided with appropriate solutions. Hence, any staffs who receive complaints from such agencies should escalate them to Complaint Resolution Officer immediately.

Complaint Resolution Process & Documentation

CCRs and Branch helpdesk will use the Helpdesk software solution for documenting and tracking customer grievances. In case branch does not have access to the software, branch should use a simple excel tracker to document and report customer complaints. The process to be followed by CRM and Branch Helpdesk is given below.

Steps CRM
Step 1 Fill Excel Complaint Tracker and send to Branch Helpdesk
Step 2 Helpdesk will fill the complaint in the software and provides CRM with reference number
Step 3 Helpdesk send complaint details to the "Owner" who will be responsible for resolution and keep Complaint Resolution Officer in Loop
Step 4 Helpdesk will log resolution details in Helpdesk software
Step 5 Helpdesk will convey resolution details to customer/CRM

Turn-around Time: - All complaints will be resolved within 5 days unless and otherwise there is a reason for verification and enquiry.

If the complaint / dispute is not redressed by LIGHT within a period of one month, the customer may appeal to the Officer-in-Charge of the Regional Office of DNBS of RBI – Ahmedabad. Branch display on grievance redressal mechanism should also contain contact details of both LIGHTComplaint Resolution Officer and the Officer-in-Charge of Regional Office of the RBI.

Assessing completeness of resolution

Repeated Complaints: - Each time a customer calls, there must be checked to determine whether the call is regarding a new issue or a "follow up" call. Each personnel who receive the complaint must ensure that a follow up call can be traced back to the original call using the call reference number or the customer details. There must be immediate action and resolution sought in case of repeated complaints

Cross Check: - HO Service Quality Team is responsible to call complainants on random sample basis to assess satisfactory and timely resolution of complaints.

FLOWCHART (General Process of Complaint Resolution)

Internal Process

All grievances will be segregated based on their severity and criticality. Severity here is defined as the intensity of loss to the customer and to the company. Grievances if necessary will be forwarded to concerned departments for further action.

The grievances of the customers will be categorized in three levels based on their severity. For example,

Issue Level 1 Level 2 Level 3 Level 4
Fraud Cases Yes
Staff Misbehavior Yes
Service Delays or Service Defects Yes
Others Yes

NOTE: This list will be amended as per need

LEVEL 1: Integrity Issues, Revenue loss, etc.

LEVEL 2: Disciplinary, Misbehavior concerns, Harassment etc.

LEVEL 3: Disbursements delays, loan application delays, center meeting delays, etc.

LEVEL 4: Others, such as Co-ordination concerns in customer's group, centre, meeting place, etc.

All levels of grievances will be treated equally with the same sense of urgency and speed. However the resolution given and the action taken might vary depending on the severity.

Roles & Responsibilities

1. Customer Care Representative: The BOE/BOM present at the branch are available for the customers to place their complaints directly through walk-ins or phone calls.

2. Branch Staff (CRM/ABM/Others): If there is no Customer Care Representative, the BOE/BOM should record the complaint in tracker and should forward the same to Head Office helpdesk. During CRM's absence, the branch staffs have to provide the customer with the contact information of the Head Office helpdesk and Complaint Resolution Officer, despite the fact that the same is being displayed in the office Notice Board at all Branches.

3. Help Desk Representatives: Head Office has a Help Desk team that works from 9:30am to 6:30pm on week days. All complaints will be registered and resolved through phone. They will follow the grievance redressal escalation process, if the resolution is not found in the given time frame. Helpdesk is also responsible for calling customers (who registered their complaints at branches) on random sample basis to cross-check on customer's satisfaction & timeliness of complaint resolution.

4. VP – Operations (for Final Escalation): Grievance officer shall escalate all complaints which are unresolved after standard TAT to VP - Operations. VP - Operations shall take up the complaint with concerned supervisor for immediate resolution.

5. Disciplinary committee and Internal Audit Department: If the grievance raised is related to a fraud accusation against a customer or an employee of LIGHT, this is escalated to the Field Auditor for their respective procedure.

6. Human Resources: When there is a proven fraud case or customer abuse case against an employee of LIGHT, this information should be forwarded to the HR team so that further action can be taken.

7. Audit Department: Field Auditors, during their customer meets, shall check customer awareness level on grievance redressal process (whether customers are aware of toll-free number and GRC concept) and advice branch accordingly. If there is any service defects or customer complaints found in the field should be updated in center meeting visit checklist. Audit shall also check whether the branch displayed latest FPC posters properly or not? Are there any pending customer complaints for more than prescribed TAT? Crosschecking with few customers on satisfactory and timely resolution of complaints can also be done by Auditors.


1. Human Resource Dept should have code of conduct for field staff recruitment, training and supervision. There should be minimum qualification necessary for the field staff and shall have necessary training tools identified for them to deal with the customers. Guidelines provided in Industry Code of Conduct by MFIN & Sadhan, which was already approved and adopted by Board, should be implemented effectively.

2. Staff Education: All field staff shall be mandatorily trained on below mentioned concepts as part of their Basic Level Training (Induction) and refresher trainings at periodical intervals:

  • The importance of Fair Practices Code (FPC)
  • The importance of Grievance Redressal Mechanism
  • Their role in effective implementation of above policies
  • Various methods and best practices of FPC implementation
  • Basic communication and soft skills to inculcate appropriate behavior towards borrowers without adopting any abusive or coercive debt collection / recovery practices.

3. Compensation methods and performance review of staff should have more emphasis on areas of service and borrower satisfaction.

4. Penalties shall also be imposed on cases of non-compliance of field staff with the Code of conduct.

5. All branches, regional & head office of LIGHT shall prominently display a simplified Fair Practices Code & Grievance Redressal Mechanism in English and vernacular language for client's information.

6. A copy of this FPC & Grievance Redressal Policy should be put up on the website for the information of various stake holders.

7. Client Education: Customers should be educated on the Fair Practices Code, grievance redressal mechanism and escalation matrix for their unresolved complaints, options, choices and responsibilities vis-à-vis financial products and services available. Client education to be made thru both printed education materials and effective verbal communication as the literacy level among clients is generally low.

8. New clients must be informed about the organization's policies and procedures to help them understand their rights as borrowers.

Policy Objective

The interest rates for the “Qualifying Assets” charged by Light Microfinance Pvt. Ltd. are based on the extant RBI guidelines as applicable to NBFC-MFIs.


Light strictly adheres to the repayment guidelines of RBI in dealing with clients during collection of dues.

The interest rate charged by Light to its borrowers is the lower of the following:

a)The cost of fund plus applicable margin; or (The Cost of Fund as calculated according to RBI & MFIN guidelines – Interest accrued on Qualifying Assets is divided by the fortnightly average of the outstanding of the assets, is compared with the Interest Cost Borne plus the amortization of Processing Fees & Stamp Duty paid as reduced by the accrued interest on Cash Collateral as divided by the fortnightly average of the debt outstanding and the same reduced by Cash Collateral.)

b)The average base rate of the five largest commercial banks by assets multiplied by 2.75. The average of the base rates of the five largest commercial banks as advised by the Reserve Bank on the last working day of the previous quarter, which determines the interest rates for the ensuing quarter.

All applications received post the applicability of the rate change (as per extant guidelines, typically the first day of the quarter) will attract the revised interest rate).

The revised interest rate becomes applicable from the first day of the quarter. The MIS is updated with the applicable interest rate within couple of hours from the announcement of the base rate by RBI. Basis the new applicable interest rate the revised repayment schedules are communicated to the all the branches.

The Revised Rates are displayed on the website and in the Offices of Light Microfinance within 7 days of the notification for such rate change.


The Board of Directors (the “Board”) of Light Microfinance Private Limited (the “Company”) has adopted this Policy upon the recommendation of the Audit Committee and the said Policy includes the materiality threshold and the manner of dealing with Related Party Transactions (“Policy”) in compliance with the requirements of Section 188 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges in India. Amendments, from time to time, to the Policy, if any, shall be considered by the Board based on the recommendations of the Audit Committee. This Policy applies to transactions between the Company and one or more of its Related Parties. It provides a framework for governance and reporting of Related Party Transactions including material transactions.


This Policy is intended to ensure due and timely identification, approval, disclosure and reporting of transactions between the Company and any of its Related Parties in compliance with the applicable laws and regulations as may be amended from time to time. The provisions of this Policy are designed to govern the approval process and disclosure requirements to ensure transparency in the conduct of Related Party Transactions in the best interest of the Company and its shareholders and to comply with the statutory provisions in this regard.


“Audit Committee or Committee” means the Committee of the Board constituted from time to time under the provisions of Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013.

“Board” means the Board of Directors as defined under the Companies Act, 2013.

“Key Managerial Personnel” means Key Managerial Personnel as defined under the Companies Act, 2013.

“Material Related Party Transaction” means a Related Party Transaction which individually or taken together with previous transactions during the financial year, exceeds ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company or such limits as may be prescribed either in the Companies Act, 2013 or the Listing Agreement, whichever is stricter, from time to time.

“Related Party” a means related party as defined under the Companies Act, 2013 read with Clause 49 of the Listing Agreement and as amended from time to time.

“Related Party Transaction” means any transaction between the Company and any Related Party for transfer of resources, services or obligations, regardless of whether a price is charged and includes –

a. Sale, purchase or supply of any goods or materials;

b. Selling or otherwise disposing of, or buying property of any kind;

c. Leasing of property of any kind;

d. Availing or rendering of any services;

e. Appointment of any agent for the purchase or sale of goods, materials, services or property;

f. Such related party's appointment to any office or place of profit in the Company, its subsidiary Company or associate Company;

g. Underwriting the subscription of any securities or derivatives thereof, of the Company;

h. Financing (including loans and equity contributions in cash or kind); 3

i. Providing or obtaining guarantees and collaterals; and

j. Deputation of employees. (The above is an indicative list and not an exhaustive one).

“Relative” means a relative as defined under the Companies Act, 2013 and includes anyone who is related in any of the following manner –

a. Members of a Hindu undivided family;

b. Husband or wife;

c. Father (including step-father);

d. Mother (including step-mother);

e. Son (including step-son);

f. Son’s wife;

g. Daughter;

h. Daughter’s husband;

i. Brother (including step-brother); or

j. Sister (including step-sister).

“Transaction” with a related party shall be construed to include a single transaction or a group of transactions. The terms Director, Chief Financial Officer, Company Secretary, shall have the same meaning as assigned under the Companies Act, 2013.


The Audit Committee shall review and approve all Related Party Transactions based on this Policy. All proposed Related Party Transactions must be reported to the Audit Committee for prior approval by the Committee in accordance with this Policy. In the case of frequent / regular / repetitive transactions which are in the normal course of business of the Company, the Committee may grant standing pre – approval / omnibus approval, details whereof are given in a separate section of this Policy. In exceptional cases, where a prior approval is not taken due to an inadvertent omission or due to unforeseen circumstances, the Committee may ratify the transactions in accordance with this Policy.


Every Director and Key Managerial Personnel will be responsible for providing a declaration in the format as per Annexure 1 containing the following information to the Company Secretary on an annual basis:

1. Names of his / her Relatives;

2. Partnership firms in which he / she or his / her Relative is a partner;

3. Private Companies in which he / she is a member or Director;

4. Public Companies in which he / she is a Director and holds along with his/her Relatives more than 2% of paid up share capital;

5. Any Body Corporate whose Board of Directors, Managing Director or Manager is accustomed to act in accordance with his / her advice, directions or instructions; and

6. Persons on whose advice, directions or instructions, he / she is accustomed to act (other than advice, directions or instructions obtained from a person in professional capacity).

Every Director and the Key Managerial Personnel will also be responsible to update the Company Secretary of any changes in the above relationships, directorships, holdings, interests and / or controls immediately on him / her becoming aware of such changes. The Company Secretary shall be responsible to maintain an updated database of information pertaining to Related Parties reflecting details of –

1. All Directors and Key Managerial Personnel;

2. All individuals, partnership firms, companies and other persons as declared and updated by Directors and Key Managerial Personnel;

3. Company’s holding company, subsidiary companies and associate companies;

4. Subsidiaries of holding company;

5. Director or Key Managerial Personnel of the holding company or their Relatives;

6. All Pfizer Group entities; and

7. Any other entity which is a Related Party as defined under Section 2(76) of the Companies Act, 2013 read with Clause 49 of the Listing Agreement or the relevant Accounting Standard.

The database shall be updated whenever necessary and shall be reviewed at least once a year jointly by the Company Secretary and Chief Financial Officer. The functional / business heads / Chief Financial Officer /Company Secretary/ shall have access to the updated database.

Every Director, Key Managerial Personnel, Functional / Business heads / Chief Financial Officer will be responsible for providing prior Notice to the Company Secretary of any potential Related Party Transaction. They will also be responsible for providing additional information about the transaction that the Board / Committee may request, for being placed before the Committee and the Board.

The suggested details and list of records and supporting documents which are required to be provided along with the Notice of the proposed transaction are provided in Annexure 2 to this Policy.

The Company Secretary in consultation with the Chief Financial Officer may refer any potential related party transaction to any external legal/transfer pricing expert and the outcome or opinion of such exercise shall be brought to the notice of the Audit Committee. Based on this Notice, the Company Secretary will take it up for necessary approvals under this Policy.

4.2REVIEW AND APPROVAL OF RELATED PARTY TRANSACTION All Related Party Transactions shall be subject to the prior approval of the Audit Committee whether at a meeting or by resolution by circulation or through electronic mode. A member of the Committee who (if) has a potential interest in any Related Party Transaction will not remain present at the meeting or abstain from discussion and voting on such Related Party Transaction and shall not be counted in determining the presence of a quorum when such Transaction is considered.

4.2.1 CONSIDERATION BY THE COMMITTEE IN APPROVING THE PROPOSED TRANSACTIONS While considering any transaction, the Committee shall take into account all relevant facts and circumstances including the terms of the transaction, the business purpose of the transaction, the benefits to the Company and to the Related Party, and any other relevant matters. Prior to the approval, the Committee shall, inter-alia, consider the following factors to the extent relevant to the transaction:

a. Whether the terms of the Related Party Transaction are in the ordinary course of the Company’s business and are on an arm’s length basis; 5

b. The business reasons for the Company to enter into the Related Party Transaction and the nature of alternative transactions, if any;

c. Whether the Related Party Transaction includes any potential reputational risks that may arise as a result of or in connection with the proposed Transaction; and

d. Whether the Related Party Transaction would affect the independence or present a conflict of interest for any Director or Key Managerial Personnel of the Company, taking into account the size of the transaction, the overall financial position of the Director, Key Managerial Personnel or other Related Party, the direct or indirect nature of the Director’s interest, Key Managerial Personnel’s or other Related Party’s interest in the transaction and the ongoing nature of any proposed relationship and any other factors the Committee deems relevant.

While considering the arm’s length nature of the transaction, the Committee shall take into account the facts and circumstances as were applicable at the time of entering into the transaction with the Related Party. The Committee shall take into consideration that subsequent events (i.e., events after the initial transactions have commenced) like evolving business strategies / short term commercial decisions to improve / sustain market share, changing market dynamics, local competitive scenario, economic / regulatory conditions affecting the global / domestic industry, may impact profitability but may not have a bearing on the otherwise arm’s length nature of the transaction.

4.2.2 APPROVAL BY CIRCULAR RESOLUTION OF THE COMMITTEE In the event the Company Management determines that it is impractical or undesirable to wait until a meeting of the Committee to enter into a Related Party Transaction, such transaction may be approved by the Committee by way of circular resolution in accordance with this Policy and statutory provisions for the time being in force. Any such approval must be ratified by the Committee at its next scheduled meeting.

4.2.3 APPROVAL BY THE BOARD If the Committee determines that a Related Party Transaction should be brought before the Board, or if the Board in any case elects to review any such matter or it is mandatory under any law for Board to approve the Related Party Transaction, then the Board shall consider and approve the Related Party Transaction at a meeting and the considerations set forth above shall apply to the Board’s review and approval of the matter, with such modification as may be necessary or appropriate under the circumstances.


In the case of frequent / regular / repetitive transactions which are in the normal course of business of the Company, the Committee may grant standing pre-approval / omnibus approval. While granting the approval the Audit Committee shall satisfy itself of the need for the omnibus approval and that same is in the interest of the Company. The omnibus approval shall specify the following:

a. Name of the related party

b. Nature of the transaction

c. Period of the transaction

d. Maximum amount of the transactions that can be entered into

e. Indicative base price / current contracted price and formula for variation in price, if any

f. Such other conditions as the Audit Committee may deem fit.

Such transactions will be deemed to be pre-approved and may not require any further approval of the Audit Committee for each specific transaction unless the price, value or material terms of the contract or arrangement have been varied / amended. Any proposed variations / amendments to these factors shall require a prior approval of the Committee.

Further, where the need of the related party transaction cannot be foreseen and all prescribed details are not available, Committee may grant omnibus approval subject to the value per transaction not exceeding Rs.1,00,00,000/- (Rupees One Crore only). The details of such transaction shall be reported at the next meeting of the Audit Committee for ratification. Further, the Committee shall on an annual basis review and assess such transactions including the limits to ensure that they are in compliance with this Policy. The omnibus approval shall be valid for a period of one year and fresh approval shall be obtained after the expiry of one year.

4.2.5 APPROVAL OF MATERIAL RELATED PARTY TRANSACTIONS All Material Related Party Transactions shall require approval of the shareholders through special resolution and the Related Parties shall abstain from voting on such resolution.

4.2.6 TRANSACTIONS NOT IN ORDINARY COURSE OF BUSINESS OR NOT AT ARM’S LENGTH All Related Party Transactions in excess of the limits prescribed under the Companies Act, 2013, which are not in the Ordinary Course of Business or not at Arms’ Length shall also require the prior approval of the shareholders through special resolution and the Related Parties shall abstain from voting on such resolution.

4.2.7 RELATED PARTY TRANSACTIONS NOT PREVIOUSLY APPROVED In the event the Company becomes aware of a Related Party Transaction that has not been approved or ratified under this Policy, the transaction shall be placed as promptly as practicable before the Committee or Board or the Shareholders as may be required in accordance with this Policy for review and ratification. The Committee or the Board or the Shareholders shall consider all relevant facts and circumstances respecting such transaction and shall evaluate all options available to the Company, including but not limited to ratification, revision, or termination of such transaction, and the Company shall take such action as the Committee deems appropriate under the circumstances.


Every Related Party Transaction entered into by the Company shall be referred to in the Board’s report to the shareholders along with justification for entering into such transaction. The Company Secretary and the Chief Financial Officer shall be, responsible for such disclosure. The Company Secretary shall also make necessary entries in the Register of Contracts required to be maintained under the Companies Act, 2013.


In the event of any conflict between the provisions of this Policy and of the Listing Agreement / Companies Act, 2013 or any other statutory enactments, rules, the provisions of such Listing Agreement / Companies Act, 2013 or statutory enactments, rules shall prevail over this Policy.


Either this Policy or the important provisions of this policy shall be disseminated to all functional and operational employees and other concerned persons of the Company and shall be hosted on the intra-net and website of the Company and web link thereto shall be provided in the annual report of the Company.

Policy Objective

The objective of this policy is to outline the company’s approach to risk management and integrate it into daily operations which will help in improved decision making, accountability and outcomes. This policy lays down the guidelines in accordance with RBI to identify, access and prioritize risk and to formulate strategies for effective mitigation of the risk.


Light Microfinance Pvt. Ltd. (Light) will continuously identify various risks which directly or indirectly effects the functioning of the company.

Light will ensure protection of rights and values of stakeholders by formulating effective risk mitigation strategies.

Light will have risk management committee which will be responsible for ensuring identification, measuring and effectively mitigation of the current and foreseen risks.

All employees of Light will be responsible and accountable for managing risks within their area of responsibility.

Light will ensure that proper training is given to employees as and when required which will enable them to effectively control the current risk and identify and strategize for foreseen risks.

Light will ensure non-discrimination in managing risk associated with its human resource.

Light will ensure that all its policies and documents are in accordance with the regulatory norms and are reviewed within the time as decided by the board.

Light will ensure that risk management procedural manuals related to all identified risks are documented and circulated to all its human resource.

Responsibility Matrix

Institutional Role Responsibility
  • Review & approve risk management policy, procedures and indicators
  • Review of results
Senior Management
  • Identifying and prioritizing risk
  • Developing indicators and setting acceptable range
  • Designing policy and procedures to manage risk
  • Assigning responsibility for implementation
  • Monitoring and reviewing results
  • Review of policy and procedures
Office & Branch Management
  • Implement control procedure and monitor compliance
Operating Staff
  • Complying with policies and procedures
  • Provide input and suggestion on effectiveness of policy and procedures and need for new policy
Risk Management Committee & Audit Committee
  • Review of policy and procedures
  • Monitoring control and results
  • Training staff on procedures implementation
  • Identifying weakness in the process

Risk category

Credit Risk

Credit risk is one of the major risk which impacts the stability and functioning of the company.

Credit risk arises due to failure of client to repay the outstanding loan obligation.

Light will have board approved Credit Policy and Repayment Policy and strictly adhere to procedures given in them.

Light will ensure loan credit to worthy clients through credit check and due diligence.

Operational Risk

Operational risk involves all risks which are inherent to Light’s business operations. It includes but not limited to risk due operational ineffectiveness, information security risk, physical security risk, fraud and error, system and technical failure.

Light will ensured that procedures given in its Operational Manual are strictly followed in all its business operations to nullify operational ineffectiveness and error.

Light will have Fair Practice Code and Client Protection Code to ensure client security and safety.

Light will maintain and follow guidelines and procedures given in Security Policy for information security and physical asset security.

Light will maintain support team to overcome discrepancies arising due to system failures and technical glitches and ensures speedy recovery of faults as and when it occurs.

Financial Risk

Financial risks arise due to company’s inability to maintain liquidity, control of cost, changes in interest rate etc.

Light will have effective Asset Liability Management Policy and Investment Policy to maintain optimum fund flow.

Light will follow the accounting procedures as given in its Accounting Manual for efficient reporting and tracking fund requirements.

Light will have Interest Rate Policy in place to deal with the risk arising due to change in interest rate.

Human Resource Risk

This risk generally arise due to ineffective management and utilization of human resource, lack of staff, discrimination among employees, cultural differences, resistance to change etc.

Light will have an effective Human Resource Policy to overcome Human Risk.

Light will have regular training of its staff to equip them with new skills and new practices followed by company.

External Risks

These risks arise due to changes in market conditions, government policies, legal and compliance norms and any natural disaster.

Light will have an effective risk management committee and compliance team to identify existing and future external risks and to strategize procedures to mitigate them.

Internal Control and Compliance

Light will have Risk Management Committee which will include senior member from each department and Internal Audit Committee to monitor and control the risk management policy and procedure implementation and their results and to review the policies and procedures as and when required.

Policy Objective

The objective of this policy document is to provide necessary safeguard for protection of all associated stakeholders from reprisals or victimization, for raising concern and reporting malfunctioning, frauds and unethical practices followed within the company. This policy document outlines framework of company’s safe and secure vigil mechanism and encourages its stakeholders to report concerns which will help company to fulfill its commitment to adhere to the highest standards of ethical, moral and legal conduct of business operations.


‘Audit Committee’ means the Audit Committee of the Company as constituted by the Board of Directors of the Company as per the guidelines of Reserve Bank of India and the Companies Act, 2013.

‘Business Associates’ means vendors associated with the Company and who have dealt with the Company or have been associated with the Company successfully or unsuccessfully in the past.

‘Complainant/Whistle Blower’ means a person who exposes misconduct, alleged dishonest or illegal activity occurring in the Company.

‘Disciplinary Action’ means any action that can be taken on the completion of / during the investigation proceedings including but not limiting to a warning, imposition of fine, suspension from official duties or any such action as is deemed to be fit considering the gravity of the matter.

‘Employee’ means an employee of the Company including outsourced, contract personnel, probationer, trainee, ex‐employee, the Directors in the employment of the Company.

‘Ethics Committee’ means the Ethics committee of the company as constituted by Board of Directors of the Company

‘Investigator/Investigators’ mean those persons authorized, appointed, consulted or approached by the Ethics Committee and includes the person authorized by the Company.

‘Light/Company’ means Light microfinance Pvt. Ltd.

‘Protected Disclosure’ means any communication made in good faith that discloses or demonstrates information that may evidence unethical or improper activity.

‘Subject’ means a person against or in relation to whom a Protected Disclosure is made or evidence gathered during the course of an investigation.

Scope & Eligibility

This Policy document is applicable to all employees, Directors, Business Associates and Partners of Light.

This policy covers malpractices and events which have taken place / suspected to have taken place, misuse or abuse of authority, frauds or suspected frauds, violation of company rules, manipulations, negligence causing danger to public health and safety, misappropriation of monies, and other matters or activity on account of which the interest of the Company is affected and formally reported by Whistle Blowers concerning its employees.

Whistle Blowers should not act on their own in conducting any investigative activities, nor do they have a right to participate in any investigative activities other than as requested by the Ethics/Audit Committee or the Investigators.


Light has secure vigil mechanism as applicable under section 177 subsection (9) and (10) of The Companies Act, 2013.

Light ensures a protected reporting channel for its stakeholders, which enables them to raise concern and report any unehical practices, frauds and breach of its code of conduct.

Light ensures that genuine Whistle Blower will be provided protection from reprisal or victimization.


Light provides protection to all genuine Whistle Blower against unfair treatment/victimization. However, any abuse of this protection will warrant disciplinary action.

Light may take strong penal or disciplinary action against Whistle Blowers, who make any Protected Disclosure which have been found to be bogus or false and done intentionally with malafide intent.

Whistle Blowers, who make 2(two) or more Protected Disclosures, which have been subsequently found to be mala fide or malicious, frivolous, baseless or reported otherwise than in good faith, will be disqualified from reporting further Protected Disclosures under this Policy.


Whistle Blower can make the Protected Disclosure to Chairperson of Ethics Committee or Chairperson of Audit Committee, as the case may be through any of the mentioned channel as soon he become aware of the ongoing mal practice.

Whistle Blower can report through any of the following channel:

a)In the form of Letter with subject “Protected Disclosure under Vigil Mechanism” to be given personally or through postal mail to-

The Chairperson

Ethics Committee

Light Microfinance Pvt. Ltd.

310, Pinnacle Business Park

Corporate Road, Prahladnagar

Ahmedabad - 380015

b)In the form of E-mail to address with subject “Protected Disclosure under Vigil Mechanism”.

c)Through Phone to Ethics Committee which will be documented and recorded, on following number: +91-7575002324

d)Whistle Blower can also report orally to any of the member of ethics committee which will be documented and recorded.

In case Protected Disclosure is received by any of the employee other than member of Ethics Committee, it should immediately be forwarded to Ethics Committee and concerned employee should maintain confidentiality of the matter.

Protected Disclosures should preferably be reported in writing so as to ensure a clear understanding of the issues raised.

For all Protected Disclosures which contains names of member/s of Ethics Committee shall be directly reported to Chairperson, Audit Committee in sealed envelope or through email. The Contact information is as follow:

Light microfinance Pvt. Ltd.

310, Pinnacle Business Park

Corporate Road, Prahladnagar

Ahmedabad – 380015


The Company encourages and strongly recommends that the Protected Disclosure should contains necessary and relevant details of the fraud or misconduct or suspected fraud or misconduct or any other unfair practice including the name of the employees or any other person who have engaged or who may have engaged, in the opinion of the Whistle Blower, in the misconduct or fraud or any other unfair practice.


All Protected Disclosures reported under this Policy are thoroughly investigated by the Ethics/ Audit Committee of the Company.

The Chairperson of the Ethics/Audit Committee may at his discretion, consider involving any Investigators for the purpose of investigation.

The decision to conduct an investigation taken by the Ethics/Audit Committee is by itself not an accusation and is to be treated as a neutral fact‐finding process. The outcome of the investigation may not support the conclusion of the Whistle Blower that an improper or unethical act was committed.

The Whistle Blower is expected to co‐operate with the Investigation Officer, when the matter is under inquiry and is expected to disclose such information or provide documents as may be required for the purpose of the investigation.

Subject will normally be informed of the allegations at the outset of a formal investigation and have opportunities for providing their inputs during the investigation. Identity of the subject is kept confidential unless required legally to disclose.

Subject have the right to consult any person of his choice other than those involved in the investigation process and can engage counsel at their own cost to represent them during investigation proceedings.

Ethics/Audit committee documents and maintains all proofs, reports of the proceedings and ensures they are secured.

Investigation Officer should submit the report within 45 days of complaints. Extension may be provided in some special cases by Audit Committee Chairperson.


Light ensures that no unfair treatment is meted out to a Whistleblower by virtue of his/her having reported a Protected Disclosure under this Policy.

If an investigation leads the Chairperson of Ethics/Audit Committee to conclude that an improper or unethical act has been committed, he/she shall recommend to the management of the Company to take such disciplinary or corrective action as he/she may deem fit. It is clarified that any disciplinary or corrective action initiated against the Subject as a result of the findings of an investigation pursuant to this Policy shall adhere to the applicable personnel or staff conduct and disciplinary procedures.

If the report of investigation is not to the satisfaction of the complainant, the complainant has the right to report the event to the appropriate legal or investigating agency. A complainant who makes false allegations of unethical & improper practices or about alleged wrongful conduct of the Subject will be subject to appropriate disciplinary action in accordance with the rules, procedures and policies of the Company.


Light ensures that no unfair treatment is meted out to a Whistleblower by virtue of his/her having reported a Protected Disclosure under this Policy.

The Company, as a policy, condemns any kind of discrimination, harassment, victimization or any other unfair employment practice being adopted against Whistleblowers.

Complete protection is given to Whistleblower/s against any unfair practice like retaliation, threat or intimidation of termination/suspension of service, disciplinary action, transfer, demotion, refusal of promotion, or the like including any direct or indirect use of authority to obstruct the Whistleblower’s right to continue to perform his/her duties/functions including making further Protected Disclosure.

The Company takes steps to minimize difficulties, which the Whistle Blower may experience as a result of making the Protected Disclosure. Thus if the Whistleblower is required to give evidence in criminal or disciplinary proceedings, the Company arranges for the Whistleblower to receive advice about the procedure, etc.

Light ensures that the Whistle Blower, if a Business Associate, is protected from any adverse action which may include but is not limited to unfair termination of the contract, unfair withholding the payments due, non-acceptance of the goods or any other unfair act which may arise solely out of the concerned Business Associate.

The identity of the Whistle Blower is kept confidential. Any other Employee assisting in the said investigation or furnishing evidence is also protected to the same extent as the Whistle Blower.

The Whistle Blower has the right to directly approach the chairperson of audit committee in case of violation of above protection guidelines or occurrence of any adverse action against him/her.


Light maintains confidentiality/secrecy of all complaints registered and only share the details with the specific persons involved in the process unless legally bound to disclose.

The Whistle Blower, the Ethics Committee, the Investigator, the Subject and all other persons involved in the process are required to maintain complete confidentiality/secrecy of the matter.

The identity of the Whistle Blower is kept confidential. In some special case where it is necessary to disclose complainant’s identity, it will be disclosed only after prior approval from the complainant.

Light keeps all documents and records related to case confidential unless legally required to be produced.

Retention of documents

All Protected disclosures in writing or documented along with the results of Investigation relating thereto, are retained by the Light for a minimum period of 7 (seven) years.


The company reserves the right to modify or amend the part or whole of the policy as and when required. However all amendment will be in compliance with the regulatory guidelines and will be applicable when communicated in writing whether physically or electronically.

Policy Objective

This Policy document on Fair Practice Code is in accordance with the RBI guidelines. The objective of this document is to ensure fair treatment for all stakeholders and to maintain transparency and ethics in all its operations.

Download Fair Practice Code

Annual Report

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Annual Report

Annual Report- FY 2020-21

Form MGT 7

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