Risk Framework
Risk Management Policy
Entity: FinMudra Credit Pvt. Ltd. (Brand Name: FinMudra)Approved on: 8 September 2026 (Reviewed by Board of Directors)
1. Preamble
- 1.1 The Board of Directors ("Board") of FinMudra ("Company") has adopted the following policy, encompassing practices relating to identification, assessment, monitoring, and mitigation/treatment of various risks to the business.
- 1.2 The Risk Management Policy ("Policy") aims to minimize unfavorable impacts on business objectives and enhance stakeholder value. Furthermore, risk management practices are intended to sustain and enhance the Company's long-term competitive advantage.
2. Purpose
- 2.1 This Policy is framed in accordance with the Risk Management Framework issued by the Reserve Bank of India (RBI) vide Master Direction DNBR. PD. 008/03.10.119/2016-17 dated September 01, 2016, and subsequent amendments.
- 2.2 The Policy addresses potential losses to the Company's human resources and financial assets, without unnecessarily limiting activities that advance its mission and goals. Effective systems have been introduced to manage various risks, which are critical to the Company's continued growth.
3. Principles
- Risk management must create and protect value.
- It must be integrated into organizational processes.
- It supports informed decision-making.
- It focuses on uncertainties around achieving objectives.
- It must be tailored to the business context.
- It must be dynamic, iterative, and responsive to change.
4. Definitions
Board: Board of Directors of the Company
Company: FinMudra Credit Pvt. Ltd. (FinMudra)
Directors: Members of the Board
Policy: Risk Management Policy
RBI: Reserve Bank of India
5. Policy Objectives
- Continuously identify organizational risks affecting business operations.
- Protect shareholder rights and values through an effective risk management framework.
- Enhance and maintain risk management tools to support strategic and operational decisions.
6. Risk Identification, Measurement, and Assessment
- 6.1 The management, under Board supervision, is responsible for implementing the Risk Management Program and establishing risk identification processes.
- 6.2 Risks are measured using qualitative and quantitative methods based on likelihood and impact.
- 6.3 Risks are categorized into inherent and residual types based on their nature and potential effect.
- 6.4 Key Risk Categories Identified:
- • Strategic Risk
- • Operational Risk
- • Market Risk
- • Financial Risk
- • Credit & Concentration Risk
- • Regulatory & Compliance Risk
- • Human Resource Risk