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     CIN NO = U65910RJ1996PTC046219

Regulations and Risk Management

CARE Grading Highlights

Particulars Rating
Name of Rating agency CARE
Date of rating December 02, 2013
Rating Grade mfR 3+


Lending Model Joint Liability Group (JLG) model
Microfinance Loans ARTH extends a loan of INR 10000 to 35000 per member for a period of 104 weeks at a diminishing interest rate of 26%. ARTH charges one percent of the loan amount as loan processing fees.
Borrowers Base 20443 borrowers
63 (41 credit officers)
11 branches
Loan outstanding INR 1763.92 lakhs
Loans disbursed INR 3062.12 lakhs
Operational areas Seven districts in Rajasthan (Jaipur, Jhalawar, Kota, Baran, Bundi) and Madhya Pradesh (Indore, Mandsaur)
Information about interest rates and processing charges communicated in writing to the clients Yes
Access to loan from other MFIs and repayment an important criteria for selection of clients Yes
Aggregate amount of loan extended for income generating activities 100%
Borrower’s household annual income in rural areas INR 60000
Borrower’s household annual income in non-rural areas INR 120000
Collaterals for loans None taken
Margin Cap Below 12 %

Compliance of Regulations and Ratings

RBI Guidelines Compliance

ARTH, being a non-deposit taking NBFC, has complied with all applicable regulations of the Reserve Bank of India. As per Non-Banking Finance Companies RBI Directions, 1998, the Directors hereby report that ARTH did not accept any public deposits during the year and did not have any public deposits outstanding at the end of the year. ARTH has pioneered many responsible practices in the MFI sector right from its inception in 2007 and has abided by all regulations brought in by RBI. ARTH has complied with all the regulations of the Reserve Bank and implemented the guidelines issued from time to time, including the Fair Practices Code.

NBFC-MFI Classification

The RBI vide its circular DNBS.CC.PD.No. 312 /03.10.01/2012-13, dated December 07, 2012 issued a checklist of documents to be submitted along with the application for seeking a Certificate of Registration from the RBI with regard to the re-classification of existing NBFCs as NBFC-MFIs. ARTH has accordingly submitted its application along with the supporting documents as per the aforesaid circular to the RBI in support of its application seeking its re-classification as an NBFC-MFI and awaiting its classification..

CRAR and Debt Equity Ratio

Being a Systemically Important Non-Deposit Accepting NBFC, is subject to capital adequacy requirements prescribed by the RBI. All institutions have to maintain a minimum ratio of 15% as prescribed under the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 (as amended from time to time) based on the total Capital to Risk (weighted) Assets Ratio (CRAR). ARTH has maintained a health Capital Risk Adequacy Ratio (CRAR) throughout the year @68.67%.

Sa-Dhan Guidelines

ARTH abides by the code of conduct defined by Sa-Dhan.

Fair Practices Code

The RBI on February 18, 2013 amended the Fair Practices Code for all NBFCs including MFIs and Gold Loan companies, requiring NBFCs to lay down an appropriate grievance redressal mechanism within their organization to resolve disputes between the company and its customers. The mechanism is to ensure that all disputes arising out of the decisions of lending institutions’ functionaries are heard and disposed of at least at the next higher level.At the operational level, all NBFCs are required to display prominently details of their company’s grievance redressal officer, including details of the local office of the RBI at their branches and other places of business, for the benefit of their customers. ARTH has revised the Code of Conduct along with relevant policies in line with the RBI’s amended Fair Practices Code for NBFCs and the details of its grievance redressal officer and the local office of the RBI, have been displayed at its branches.

Code of Conduct Assessment

In its Code of Conduct assessment (COCA), it has got a score of 71.9/100 signifying "HIGH LEVEL OF ADHERENCE".

Loan portfolio Audit

The Loan Portfolio Audit is conducted internally at ARTH. The Loan portfolio audit was to verify independently the repayment rate & portfolio at Risk reported by the company. The loan portfolio audit confirms the nearly 100% repayment rate and very negligible Portfolio at Risk.