Our company, a private limited firm, connects clients with a partner Non-Banking Financial Company (NBFC) for loans. While the NBFC handles the loan process, we anticipate some defaults. We’ve heard about the First Loss Default Guarantee (FLDG) structure where we absorb a percentage of early defaults. Could you advise on the legal setup for this? Would a simple agreement with the NBFC, along with funds in a separate account for FLDG, suffice? Or are there specific legal challenges we need to be aware of?

Apni Law
Apni Law
Law Forum › Category: Banking / Finance › Our company, a private limited firm, connects clients with a partner Non-Banking Financial Company (NBFC) for loans. While the NBFC handles the loan process, we anticipate some defaults. We’ve heard about the First Loss Default Guarantee (FLDG) structure where we absorb a percentage of early defaults. Could you advise on the legal setup for this? Would a simple agreement with the NBFC, along with funds in a separate account for FLDG, suffice? Or are there specific legal challenges we need to be aware of?
Vote Up
230
Vote Down
Apni Law Staff asked 11 months ago

Our company, a private limited firm, connects clients with a partner Non-Banking Financial Company (NBFC) for loans. While the NBFC handles the loan process, we anticipate some defaults. We’ve heard about the First Loss Default Guarantee (FLDG) structure where we absorb a percentage of early defaults. Could you advise on the legal setup for this? Would a simple agreement with the NBFC, along with funds in a separate account for FLDG, suffice? Or are there specific legal challenges we need to be aware of?

1 Answers
Vote Up
22
Vote Down

Best Answer

Apni Law Staff answered 11 months ago

A simple agreement with the NBFC, coupled with funds in a separate account for FLDG, might be sufficient. However, legal challenges could arise from regulatory scrutiny, potential misinterpretation as an unauthorized financial activity, and the need to comply with anti-money laundering and know-your-customer regulations. Consulting with a legal expert specializing in financial services would be crucial to ensure compliance and mitigate potential risks.

You Might Also Like

My sons took out an education loan in 2005, and I’ve been making monthly payments ever since. I sent Rs 2,500 to the SBI account, but they only transferred Rs 1,610 to the loan account. They also charged me more than Rs 2,200 in fees. I raised this issue in 2010, but never got a response. I stopped making payments in 2012. I was asked to attend a Lok Adalat, where I offered to pay Rs 2 lakh (the outstanding amount was Rs 3 lakh). They refused my offer. Now they’ve transferred the loan to Reliance ARC, and they’re demanding full repayment. My loan was unsecured. Is it legal for them to transfer an unsecured loan to an ARC?

We took an education loan from SBI a year ago for ₹4 lakhs. We’ve been struggling financially and couldn’t repay the loan. We did manage to pay ₹30,000 in interest towards the loan. However, without any notice, SBI deducted ₹50,000 directly from our personal savings account, which is not connected to the education loan account. How can this happen? Is there any legal recourse for us to get this amount back?

What happens if someone took a personal loan and credit card loan from a bank in India and couldn’t repay due to financial difficulties? If the bank sent notices for a while but didn’t file a lawsuit, what legal steps can they take after 8 years? If the borrower wants to settle the loan by paying a minimal amount they can afford, what decision might a court make if the bank files a case against them?

My mom and I are planning to buy an apartment together. I’m planning to take a home loan, but I don’t want the property to be in my name. Is it possible to have the ownership solely in my mother’s name while I contribute half the payment through the loan and she contributes the other half? Could you advise me on this?

My wife, a school teacher, co-signed a loan for a friend who is now refusing to pay. This person is capable of paying, but the bank is pressuring my wife and even approached her at her workplace. It’s putting a lot of stress on her. Why isn’t the bank going after the actual borrower? It’s a government bank. Any advice?

Share This Article
Previous Article I’m a 25 year old Hindu woman, married for just two months. My marriage was forced upon me, and I’ve left my husband to be with my boyfriend. I left a note for him. If he files a police complaint, what will happen? If I tell the police I came with my boyfriend of my own free will, will they take action against him? I don’t want to go back to my husband, I want to stay with my boyfriend. Divorce can only be filed after a year. What should I do? I’m also considering filing a case against my family for forcing me into marriage. Please guide me, I need clear advice.
Next Article My family has a case pending in the Chandigarh High Court since 2002. We won in both the lower courts, but the High Court hearing was postponed from November 2016 to February 2017. However, our case didn’t come up on the February 14th list. Two petitions have been filed by the opposing party, and their status is “delivered” – but we have no information about their content or the case’s progress. How can I get details about these petitions and what can I do to get our case heard sooner?

Follow US

Find US on Social Medias
Popular News
- Advertisement -
- Advertisement -
Ad imageAd image

📢 Stay Connected!

Join our community on Telegram and WhatsApp for instant updates, news, and exclusive offers.