Showcases Northern Arc’s technological prowess in the co-lending domain
Chennai, Tamil Nadu, India – Northern Arc Capital, a leading diversified NBFC and financial services platform, has signed a Memorandum of Understanding (MoU) with DCB Bank Ltd., a prominent new generation scheduled commercial bank to leverage Northern Arc’s cutting-edge nPOS platform to enhance and scale DCB Bank’s digital lending capabilities further cementing a more than a decade old relationship between both organizations.
Powered by data-rich technology solutions, strong sectoral expertise, robust risk management, and a financial ecosystem of originator partners, Northern Arc operates a diversified Lending, Placements, and Fund Management business to facilitate finance of over Rs. 1.89 trillion aiming to empower the underserved households and businesses. In FY24, nPOS facilitated transactions worth more than Rs. 59,890million.
nPOS is Northern Arc’s proprietary technology co-lending solution. It operates as a cloud-based, API-enabled platform designed to strengthen and infuse greater efficiency to loan origination, underwriting, disbursement, and collection reconciliation processes for DCB Bank. This state-of-the-art platform will facilitate seamless co-lending and partnership lending activities, between the Bank and various loan originator partners. The advanced security measures of nPOS includes multi-factor authentication, encryption, customizable business rule engines that leverage data points such as bureau and debt-to-equity, FOIR and other ratios, enabling sophisticated, rule-based decision-making across various financial products.
nPOS is unique in its modular design and microservices-based architecture, enabling fast data exchange and automated processing without any manual interventions. This significantly reduces processing time and enhances productivity. Its ability to support various loan types and integrate seamlessly with existing systems makes it an efficient and effective platform for DCB Bank to adapt quickly to market changes and expand its retail portfolio effectively.
nPOS platform also will enable DCB Bank to leverage Business Correspondent (BC) Partnerships, Direct Assignment (DA) and Co-Lending, allowing for quick onboarding of various NBFCs and streamlining accounting, distribution, and reconciliation processes. The digital solution shall enable the Bank to reap the benefits of efficiency, provide better experience for customers and enhance its lending capabilities.
Speaking on this arrangement, Mr. Praveen Kutty, Managing Director & CEO, DCB Bank, said, “We are thrilled to announce the exciting new partnership with Northern Arc Capital. This marks a significant step forward. It enables DCB Bank to continue to innovate and enhance product offerings for our customers. Working together with a forward-thinking business, we are confident of unlocking new opportunities and delivering greater value to our stakeholders. We believe that nPOS is a business growth enhancer and look forward to leverage the potential of this solution and prepare the Bank for the future. Together, we are stronger and better positioned for success.”
Mr. Ashish Mehrotra, CEO & MD, Northern Arc Capital, commented, “We are delighted to partner with DCB Bank to accelerate the next phase of digital lending transformation. At Northern Arc Capital, our commitment to harnessing technology is exemplified through our proprietary platforms – nPOS, Nimbus, and Nu Score. The nPOS platform is tailored to meet the dynamic needs of the financial sector, empowering banks like DCB Bank to optimize operations and strengthen their digital reach. This MOU exemplifies the commitment of both DCB Bank and Northern Arc Capital to leverage emerging market opportunities, enhance technological capabilities, and introduce cutting-edge products that cater to a diverse customer base, including improving access to retail credit for businesses and households across India.”
The MoU was exchanged in Mumbai between Mr. Praveen Kutty, Managing Director and CEO, DCB Bank, and Mr. Ashish Mehrotra, CEO & MD, Northern Arc Capital, in the presence of Mr. Amit Mandhanya, EVP, Partnership Based Lending, Northern Arc Capital.
About DCB Bank
DCB Bank is a new generation private sector bank with 451 branches (as on 30th September 2024) across India. It is a scheduled commercial bank regulated by the Reserve Bank of India. It is professionally managed and governed. DCB Bank has contemporary technology and infrastructure including state-of-the-art internet banking for personal as well as business banking customers.
DCB Bank’s business segments are Retail, micro-SME, SME, mid-corporate, Agriculture, Government, Public Sector, Indian Banks, Co-operative Banks and Non-Banking Finance Companies (NBFC). DCB Bank has approximately two and a half million customers and continues to grow its presence in various geographies.
The Bank’s network of state-of-the-art, customer friendly branches are situated across Andhra Pradesh, Bihar, Chhattisgarh, Daman, Delhi/NCR, Goa, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Silvassa, Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand and West Bengal.
About Northern Arc
Northern Arc is one of the leading players amongst India’s diversified NBFCs in terms of AUM as of March 31, 2024^ dedicated to empowering the lives of underserved individuals and businesses. Powered by technology and data, Northern Arc offers a suite of solutions including lending, placements, and fund management in key sectors like MSME Financing, MFI, Consumer Financing, Vehicle Financing, Affordable Housing Financing, and Agricultural Supply Chain Finance. Since 2009, Northern Arc has facilitated the financing of over Rs. 1.89 trillion cumulatively, for its clients, spread across 686 districts in 28 states and 7 Union Territories in India. Our work, including that of our originator partners, has impacted the lives of over 111 million people.
Northern Arc handles an AUM of Rs. 15,121 crores through its balance sheet and active AIF funds as of September 30, 2024. The firm is backed by marquee equity investors like IFC, Sumitomo Mitsui Banking Corporation, LeapFrog, 360 ONE (formerly known as IIFL), Accion, Affirma Group, Dvara Trust, and Eight Roads (a proprietary arm of Fidelity).
^Source: Report titled “Analysis of NBFC sector and select asset classes” dated June 2024 prepared and released by CRISIL
