CLIENT INTRODUCTION
Our client is a systematically important (having asset size more than INR 1,000 Crores and growing fast), non-deposit taking NBFC. It is part of a global financial services player in the Agricultural, Construction Equipment and Commercial Vehicles finance businesses and supports its main brand customers and dealers with tailored financial solutions by offering a full range of retail financing, leases, rental programs and insurance products.
Client has field based financial specialists whose key role is to interact with customers to understand their financing needs and offer tailored financial solutions to meet their requirements making use of a digital platform for a faster turnaround time, transparency and real-time tracking.
Client Challenges
Our client operates in highly regulated and competitive business. While the entity was newly formed, but challenges are not of a typical startup as it was expected to gear up fast to support the national network of its parent entity with a thin, shared team, lower budgets and yet remain aligned with the global risk frameworks of its NYSE listed group.
- Newly formed entity of highly compliant organisation with very high growth projections, zero tolerance of compliance
- Team has dual reporting structure – Global legal & Operational teams of parent entity in India
- Lack of confidence in the list of applicable Acts and Compliances.
- Consolidated view of regulatory updates and changes in the laws applicable on the business
- Bringing everyone on same page on expectations w.r.t., Regulatory compliance obligations
- Co-ordination with internal and external users to get status of compliance on monthly / quarterly basis for Board reporting
- Categorisation of compliance risks to align with risk based frameworks of the group
CLIENT HIGHLIGHTS
- Subsidiary of large commercial automobile giant with business operations across India
- Supports dealers & end clients of parent entity with tailor made finance offerings
- Part of an NYSE listed automobile group having presence across 180+ countries
- RBI Registered NBFC in India
- Asset Size – INR 1,000 crores+
- Employees – 200+
- Headquartered in Gurgaon, Delhi / NCR, India
IMPLEMENTATION PROCESS
The client chose to implement GCMS solution offered by Lawrbit after evaluating alternatives available in market, despite having a Compliance Management Software from a Big 4 implemented at their parent entity.
STEP 1 – Business Discovery
During this phase, our team of legal experts engaged with the client’s functional users to understand business. Post detailed interactions, we understood all aspects of client’s business impacting laws:
- Locations, Nature of Establishment
- Product / Service portfolio
- Third party contractors, service providers
- Industry Specific Obligations
STEP 2 – Compliance OBLIGATION FINALISATION
- Shared list of applicable laws, regulations, master circulars, directions with Functional Heads, Project SPOC
- Round of discussions held with Functional SPOCs to clarify their queries around compliance
- Identified process gaps and helped client to fix basis best practices
- Identified and finalised compliance obligations applicable on the business in consultation with Functional SPOCs
- Finalised Ownership & responsibility Matrix for each compliance obligation covering internal and external stakeholders
- Compliance Owner –> Approver –> Group Owner
STEP 3 – APPLICATION CONFIGURATION
Application configured basis information gathered:
- Location & Department Master
- User Master, access rights for CXOs & Auditors
- Mapping of laws to location & functions
- Responsibility & Authority Matrix for compliance
- Event Trigger Rights & Approval Matrix
- Pre & Post Compliance responsibility mapping
STEP – 4: USER TRAINING & Go-Live
- Multiple training sessions for end users
- Follow up help desks to resolve any Post Go-Live support issues
- Training Manuals and Ticket Centre
LIFETIME SUPPORT
Client now enjoys the benefits of our lifetime support,
- Regulatory Updates are provided on Near Real Time basis without any manual intervention
- Application is hosted on SaaS, so no involvement from client’s IT team for application support
- Technology updates, upgrades and new features are introduced on regular basis
THE IMPACT
- The Risk and Compliance Head now has better control over its organisation’s compliance
- Everyone’s on same page with understanding and sensitivities of compliance obligations
- Organisation wide Risk parameters and tolerance levels are fixed and standardised
- Resulted into better visibility, transparency and accountability in the system
- The initiative was well received and appreciated by the global legal head
- Management’s reliance on analytical dashboards, regulatory updates is high
- Helped client reduce cost of compliance
PROJECT HIGHLIGHTS
- 70+ Applicable Laws, Rules and Regulations
- 3,500+ Compliance applicable
- 50+ system Users across India & globally
- Post Go-Live application support provided by Lawrbit
- On-boarded global Risk Head for compliance controls
- Compliance Service providers given system access & training
- Faster turn around
KEY LAWS APPLICABLE ON CLIENT
| Companies Act, 2013 | Goods and Service Tax Act |
| Income Tax Act | Arbitration and Conciliation Act |
| Debt Recovery Tribunal Act | The Prevention of Money Laundering Act |
| IBC (Information Utilities) Regulations | Shops and Establishments Act – Haryana |
| Indian Stamp Act | RBI (COVID-19 – Regulatory Package) |
| Negotiable Instrument Act | Employee Provident Fund Act |
| FEMA (Master Direction – External Commercial Borrowings, Trade Credits, and Structured Obligations) | RBI (Instruction – Filing of records of equitable mortgages with the Central Registry) |
| NBFC (Approval of Acquisition or Transfer of Control) Directions | RBI (LEI for for Participation in Non-derivative Markets) |
| RBI (Master Direction – Monitoring of Frauds in NBFCs) | Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 |
| RBI (Master Direction – Information Technology Framework for the NBFC Sector) | RBI (Circular- Reporting to Central Repository of Information on Large Credits) |
| RBI (Directions – Managing Risks and Code of Conduct in Outsourcing of Financial Services by NBFCs) | RBI (Master Direction – Non-Banking Financial Companies Auditor’s Report) |
| Master Direction – Reserve Bank of India (Filing of Supervisory Returns) Directions, 2024 | RBI (Commercial Paper Directions) |
