Glossary
A consolidated glossary of terms used across this spec. Designed for both human reading and LLM retrieval (each term is a self-contained one-paragraph definition).
For unfamiliar terms, use this page as a first stop; for depth, follow the section reference.
AA — Account Aggregator — RBI-regulated NBFC class that brokers consent-based financial-data sharing between Financial Information Providers (FIPs, typically banks) and Financial Information Users (FIUs, typically lenders). Examples: Setu, FinBox, OneMoney, Finvu, Saafe, Anumati. See 2.8 and 4.3.
ABB — Average Bank Balance — Average end-of-day balance in a bank account over a defined period; a key bank-statement underwriting metric.
Adverse Media — Negative news / regulatory action mentions about a borrower or beneficial owner found in published media; part of sanctions-screening checks.
AI Crawler Allowlist — Explicit listing in robots.txt of AI / LLM crawlers (GPTBot, ClaudeBot, anthropic-ai, Google-Extended, etc.) permitting them to index content.
ALM — Asset-Liability Management — The discipline of matching asset (loan) maturities with liability (debt) maturities to avoid liquidity / interest-rate mismatches. See RBI ALM guidelines for NBFCs.
Anchor — In supply-chain finance, the large corporate buyer or seller around whose ecosystem suppliers / distributors are financed. See 1.6.
ANBC — Adjusted Net Bank Credit — The denominator for PSL target computation. See 2.6.2.
APR — Annual Percentage Rate — All-in cost of credit expressed as an annualised percentage, including interest and all fees. Mandated in KFS per RBI Digital Lending Guidelines. See 2.3.
Base Layer (NBFC-BL) — Lowest tier under RBI Scale-Based Regulation, asset size < ₹1,000 Cr (excluding higher categories). Default for new NBFCs. See 2.2.
BBPS — Bharat Bill Payment System — NPCI’s bill payment infrastructure. Lenders can onboard as billers; borrowers pay via any BBPS-enabled UPI app or netbanking.
Beneficial Owner (BO) — Natural person who ultimately owns or controls a non-individual customer; per PMLA, defined as >= 25% ownership for companies, >= 15% for partnerships and trusts.
BSA — Bank-Statement Analysis — Automated parsing of bank statements (PDF or AA-fetched) to extract transaction-level data, categorise, compute aggregates, and detect tampering. Major vendors: Perfios, FinBox, Precisa. See 4.4.
Bureau — Credit Bureau / CIC — Credit Information Company; one of CIBIL TransUnion, Experian, Equifax, CRIF High Mark. Provides borrower credit history. See 4.1.
CAR / CRAR — Capital to Risk-weighted Assets Ratio — Capital adequacy ratio; minimum 15% for most NBFCs.
CERSAI — Central Registry of Securitisation Asset Reconstruction and Security Interest. Operates CKYCR and the security-interest registry under SARFAESI. cersai.org.in.
CGTMSE — Credit Guarantee Fund Trust for Micro and Small Enterprises; government scheme guaranteeing collateral-free credit to MSEs. See 2.14.2.
CIN — Corporate Identification Number; unique 21-digit MCA identifier for a company.
CICRA — Credit Information Companies (Regulation) Act, 2005. Requires lenders to report monthly to all four bureaus.
CKYC / CKYCR — Central Know Your Customer Records Registry. Single repository of KYC records of customers of all REs in India. Operated by CERSAI. See 2.7.
CLM-1 / CLM-2 — Co-Lending Model variants. CLM-1 is synchronous co-origination (both lenders book at origination); CLM-2 is assignment-based (originator books, then assigns partner’s share). See 1.2 and 2.6.
Co-lending — RBI-blessed structure for joint lending by a bank and an NBFC, typically in a pre-agreed funding ratio (e.g., 80:20 partner:NBFC). Drives scale for sub-₹500 Cr NBFCs.
Consent Artefact — Cryptographically signed record from an AA evidencing the borrower’s consent to data sharing, including scope, purpose, FIPs, validity, frequency.
COSMOS — RBI’s online NBFC registration and supervisory portal. cosmos.rbi.org.in.
Daily Classification — Daily computation of each loan’s IRACP class (Standard / SMA-0 / SMA-1 / SMA-2 / NPA / sub-NPA categories) per RBI’s Nov 2021 clarification. See 2.10.
DA — Direct Assignment — Bilateral sale of a loan or pool of loans from one RE to another under TLE-MD. See 2.6.1.
DIN — Director Identification Number — MCA identifier for directors.
Digital Lending Guidelines (DL Guidelines) — RBI’s DOR.CRE.REC.66/21.07.001/2022-23, Sep 2022. Governs digital lending including LSP model, KFS, fund flow, cooling-off, etc. See 2.3.
DigiLocker — Government of India digital document wallet; can fetch OVDs pre-validated by issuing authority for KYC.
DLA — Digital Lending App — Mobile / web app through which digital lending is offered. Per DL Guidelines, the RE must publish a list of DLAs it engages.
DLG / FLDG — Default Loss Guarantee / First Loss Default Guarantee — Contractual arrangement under which an LSP compensates an RE for losses on a defined portfolio, capped at 5% per RBI’s June 2023 framework. See 2.5.
DPD — Days Past Due — Number of calendar days a payment is overdue. Drives SMA / NPA classification.
DPDP Act, 2023 — Digital Personal Data Protection Act — India’s comprehensive personal data protection law. See 2.12.
DPN — Demand Promissory Note — Negotiable instrument payable on demand; common security document accompanying loan agreement.
DSA — Direct Selling Agent — Outsourced sales channel for lender’s products. Governed under outsourcing framework.
DRA — Debt Recovery Agent — Recovery agent certified by IIBF; recommended for FPC compliance. See 2.11.2.
DSC — Debt-Service Capacity — Ratio of available operating cash flow to proposed EMI / debt service; underwriting metric.
ECL — Expected Credit Loss — IndAS 109 forward-looking provisioning concept; three-stage model (12-month, lifetime, lifetime credit-impaired).
eKYC — Electronic KYC; can be Aadhaar-OTP-based, biometric, offline XML, or DigiLocker-fetched.
eNACH — Electronic NACH mandate via Aadhaar, debit card, or netbanking; faster activation than paper NACH.
eSign — Aadhaar-OTP or DSC-based digital signature; legally valid under IT Act, 2000. Vendors: Leegality, Digio, SignDesk.
eStamp — Digital stamp paper / state-issued electronic stamping certificate. SHCIL is the central operator.
EWS — Early Warning Signal — Pre-default risk signal (drop in bank balance, GST late filing, anchor relationship change, etc.) that triggers risk-team review.
Factoring — Outright purchase of receivables; regulated under Factoring Regulation Act 2011 (amended 2021).
FIP — Financial Information Provider — Bank / MF / insurance company / GSTN etc. that holds customer’s financial data and releases it on consent via an AA.
FIU — Financial Information User — Entity (typically a lender) that consumes data via an AA with customer consent.
FOIR — Fixed Obligation to Income Ratio — Sum of existing EMIs / monthly income. Underwriting metric for assessing capacity.
FPC — Fair Practices Code — RBI-mandated conduct rules for borrower-facing operations. See 2.11.
GST — Goods and Services Tax — Central + State value-added tax. Lender pays GST on fees; borrower’s GST returns are a key underwriting input.
GSP — GST Suvidha Provider — Authorised intermediary between GSTN and external systems for GST APIs. Examples: Cygnet, Karix, Webtel, MasterIndia, Taxgenie, Vayana.
GSTIN — Goods and Services Tax Identification Number; unique 15-digit identifier per registered entity per state.
GSTR-1 / 3B / 2A / 2B — Monthly GST returns. GSTR-1 (outward supplies), 3B (summary), 2A (auto-populated inward), 2B (static inward summary). Used heavily in SME underwriting.
HFC — Housing Finance Company — NBFC category specialising in housing finance, now regulated by RBI (previously NHB).
Hypothecation — Charge on movable assets (inventory, receivables, equipment) given as collateral; less rigorous than mortgage.
IDR — Issuer-Default Risk — Standalone counterparty credit risk used in some bond / debt instruments; not directly used in SME WC.
IndAS — Indian Accounting Standards; mandatory for NBFCs above specified size thresholds. Materially affects provisioning via IndAS 109 ECL framework.
IRACP — Income Recognition, Asset Classification and Provisioning — RBI prudential norms governing how lenders recognise income and classify assets. See 2.10 and 2.10.1.
IRN — Invoice Reference Number — Unique identifier assigned to an e-invoice on the GST IRP; used for invoice authenticity verification.
IT MD — RBI Master Direction on IT Governance — DOS.CO.CSITEG/SEC.7/31.01.015/2023-24, Nov 2023. Covers IT governance, BCP, security, audit, outsourcing. See 2.13.
JSON-LD — JavaScript Object Notation for Linked Data; schema.org structured data format used for SEO. Implemented in site head with WebSite + Person schema.
KFS — Key Fact Statement — RBI-standardised disclosure document issued to borrower before loan execution. Includes loan amount, tenure, APR, all fees, penal charges, cooling-off, grievance contact. See 2.4.
KIN — KYC Identifier Number — 14-digit CKYC identifier per customer.
KYB — Know Your Business — Verification of entity borrowers — GSTIN, Udyam, MCA, BO mapping.
KYC — Know Your Customer — Verification of natural-person borrowers — PAN, Aadhaar, OVDs.
LAP — Loan Against Property — Secured loan against residential / commercial property; typically ₹25 lakh+ ticket, 36 – 180 months tenure.
LLPIN — Limited Liability Partnership Identification Number — MCA identifier for LLPs.
LMS — Loan Management System — Post-disbursement loan accounting, accrual, classification, provisioning, repayment processing, closure. See 3.J.
LOS — Loan Origination System — Pre-disbursement application, KYC, decisioning, sanction workflow.
LSP — Lending Service Provider — Per RBI DL Guidelines, an agent of an RE performing customer acquisition, underwriting support, servicing, monitoring, or recovery. Can layer DLG up to 5%. See 1.3.
LTV — Loan to Value — Sanctioned loan as % of collateral value; used in secured products.
MAB — Monthly Average Balance — Average end-of-day bank balance over a month; similar to ABB but monthly cuts.
MCA — Ministry of Corporate Affairs — Government regulator for company law in India. Issues company / director identifiers, holds filings.
MCLR — Marginal Cost of funds-based Lending Rate — Bank benchmark lending rate; sometimes used as reference rate for floating-rate loans.
MHP — Minimum Holding Period — Minimum time a loan must sit on transferor’s books before being transferred under TLE-MD. See 2.6.1.
MITC — Most Important Terms and Conditions — Standardised summary document for borrower clarity, sometimes separate from KFS.
MLI — Member Lending Institution — Lender enrolled with CGTMSE to extend covered loans.
MOTD — Memorandum of Deposit of Title Deeds — Equitable-mortgage instrument; deposit of title with intention to create security. Cheaper alternative to registered mortgage. See 2.14.1.
MRR — Minimum Retention Requirement — 10% of cash flows of transferred assets that transferor must retain under TLE-MD. See 2.6.1.
MSME / MSMED Act, 2006 — Definitional framework for Micro, Small, Medium Enterprises; revised by S.O. 2119(E) dated 26 June 2020 with composite investment + turnover thresholds.
Multi-AZ / Multi-Region — Cloud deployment patterns for HA / DR. RBI IT MD expects geographic separation of primary and DR.
NACH — National Automated Clearing House — NPCI’s bulk debit / credit system. Lenders present daily debits via sponsor bank; ack file returned next day.
NBFC — Non-Banking Financial Company — Company licensed by RBI under Section 45-IA of RBI Act, 1934 to conduct financial activities.
NBFC-ICC — NBFC Investment and Credit Company; the default category for lending NBFCs.
NBFC-AA — NBFC Account Aggregator; the AA class.
NBFC-MFI — NBFC Microfinance Institution.
NBFC-BL / ML / UL / TL — Base / Middle / Upper / Top layer under Scale-Based Regulation.
NESL — National E-Governance Services Limited; operates the Information Utility under the IBC for credit information.
NIC code — National Industrial Classification code; identifies a business’s industry; used for sectoral classification and PSL eligibility.
NIM — Net Interest Margin — Interest income minus interest expense as % of average earning assets.
NOC — No Objection Certificate — Issued by lender to borrower on loan closure.
NOF — Net Owned Fund — Defined capital metric for NBFCs; equity + reserves minus specific group exposures. Minimum ₹10 Cr for NBFC-ICC (phased to 2027).
NPA — Non-Performing Asset — Loan overdue beyond 90 days (general rule). See 2.10.
NPCI — National Payments Corporation of India — Operates UPI, NACH, IMPS, BBPS, RuPay, etc.
Outsourcing MD — RBI Master Direction on Outsourcing of IT Services, DoS.CO.CSITEG/SEC.16/31.01.015/2022-23, Apr 2023. Plus the broader financial-services outsourcing framework. See 2.14.
OVD — Officially Valid Document — Aadhaar, Passport, Voter ID, Driving Licence, NREGA card; permitted KYC identity proofs.
PAN — Permanent Account Number — Income tax department identifier for individuals and entities; mandatory for any financial account.
PEP — Politically Exposed Person — Person in a prominent public position; subject to enhanced due diligence under AML / KYC rules.
PMLA — Prevention of Money Laundering Act, 2002 — Framework for AML / CFT; underpins KYC rules.
PSL — Priority Sector Lending — RBI-mandated lending categories (agriculture, MSME, weaker sections, etc.) with bank-specific targets. See 2.6.2.
PSLC — Priority Sector Lending Certificate — Tradeable certificate representing PSL fulfilment; traded on RBI’s e-Kuber. See 2.6.2.
PTC — Pass-Through Certificate — Securitisation instrument representing claim on a pool of loans, issued by an SPV.
PTP — Promise to Pay — Borrower commitment captured during collections; tracked for performance.
RBI — Reserve Bank of India — Central bank; regulator of banks, NBFCs, payment systems.
RE — Regulated Entity — Per RBI: banks, NBFCs, HFCs, AIFIs subject to RBI direct regulation.
Restructuring — Modification of original loan terms for reasons of borrower financial difficulty; downgrades the asset per IRACP unless covered by special schemes.
RPO / RTO — Recovery Point / Time Objective — Maximum acceptable data loss / downtime for DR. RBI IT MD expects defined RPO / RTO.
SARFAESI Act, 2002 — Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. Permits NBFCs (above threshold) to enforce security without court intervention. Relevant for secured products.
SBR — Scale-Based Regulation — RBI’s four-layer NBFC framework (BL / ML / UL / TL), effective Oct 2022. See 2.2.
SCF — Supply-Chain Finance — Financing within a supply chain anchored by a large corporate; includes payable finance, dealer/distributor finance, invoice discounting. See 1.6.
Schedule II of PMLA — Categories of financial transactions / entities with specific KYC norms (e.g., requiring biometric Aadhaar).
SHCIL — Stock Holding Corporation of India — Central operator for e-stamping in many states. shcilestamp.com.
SMA — Special Mention Account — Pre-NPA category. SMA-0 (1–30 DPD), SMA-1 (31–60), SMA-2 (61–90).
SPV — Special Purpose Vehicle — Bankruptcy-remote entity used in securitisation.
TDS — Tax Deducted at Source — Withholding tax on certain payments; lender deducts TDS on vendor / DSA payouts and remits to government.
TLE-MD — Master Direction on Transfer of Loan Exposures — DOR.STR.REC.51/21.04.048/2021-22, Sep 2021. Governs DA, securitisation, stressed-asset transfer. See 2.6.1.
TReDS — Trade Receivables Discounting System — RBI-regulated exchange for invoice financing of MSME receivables. Exchanges: RXIL, Invoicemart, M1xchange.
TSP — Technology Service Provider — In the AA context, the integration layer between FIU and AAs; not regulated but practically necessary.
Udyam — MSME registration portal at udyamregistration.gov.in. Replaced Udyog Aadhaar (UAM) in 2020.
UIDAI — Unique Identification Authority of India; issues Aadhaar.
UPI — Unified Payments Interface — NPCI-operated real-time payment system.
UPI AutoPay — UPI-based recurring debit; alternative to NACH for repayments.
UTR — Unique Transaction Reference — Bank-issued reference for an NEFT / RTGS / IMPS transaction.
V-CIP — Video Customer Identification Process — RBI-compliant video KYC session; trained agent, live video, OVD verification, geo-tag, recording retained.
Virtual Account — Per-borrower sub-account under a master collection account; auto-allocates inbound transfers to the right loan.
Wilful Defaulter — Borrower classified by RE as having capacity to repay but deliberately defaulting; reportable to bureau and CICs; subject to restrictions on further credit.
WC — Working Capital — Short-tenure (30 – 180 days) financing for business’s operational cycle. Primary product for the SME wedge.
Yandex Verification — Site-ownership verification meta tag for Yandex search engine; included in site head.
Numbers and acronyms used in this spec
Section titled “Numbers and acronyms used in this spec”5%DLG cap — Default Loss Guarantee maximum per RBI’s June 2023 framework.80:20co-lending ratio — Common partner:NBFC funding split in CLM-1 arrangements.90 DPD— NPA trigger for term loans.15%CRAR — Minimum capital adequacy ratio for most NBFCs.₹10 CrNOF — Minimum NOF for NBFC-ICC (phased to 2027).25%single-borrower cap — Of Tier-1 capital for NBFC-BL.40%PSL target — Bank’s overall PSL target as%of ANBC.7.5%MSME-Micro sub-target — Within bank’s PSL.120 days— Typical DLG invocation window post NPA.6 hours— Material cyber incident reporting window to RBI per IT MD.
Useful URLs (for quick reference)
Section titled “Useful URLs (for quick reference)”- RBI:
rbi.org.in - COSMOS (NBFC registration portal):
cosmos.rbi.org.in - CKYC:
ckycindia.in - CERSAI:
cersai.org.in - CGTMSE:
cgtmse.in - Udyam:
udyamregistration.gov.in - GST:
gst.gov.in - MCA:
mca.gov.in - DigiLocker:
digilocker.gov.in - NPCI:
npci.org.in - Sahamati (AA ecosystem):
sahamati.org.in - SHCIL eStamp:
shcilestamp.com - TReDS:
rxil.in,invoicemart.com,m1xchange.com - Bureaus:
cibil.com,experian.in,equifax.co.in,crifhighmark.com - IIBF (DRA certification):
iibf.org.in