Loan Broker Agreement Template for India

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Key Requirements PROMPT example:

Loan Broker Agreement

"I need a Loan Broker Agreement for my Mumbai-based NBFC that will engage independent brokers to source small business loans, with strict compliance requirements and a tiered commission structure based on loan values."

Document background
The Loan Broker Agreement is essential for financial institutions and lending companies operating in India who engage third-party brokers to source and facilitate loan arrangements. This document is particularly relevant in the context of India's growing financial services sector, where regulatory oversight requires clear documentation of intermediary relationships. The agreement typically outlines the broker's authority to represent the lender, compensation structure, compliance with RBI and SEBI regulations, and data protection requirements. It should be used whenever a financial institution wants to formalize its relationship with loan brokers, ensuring compliance with Indian banking and financial services regulations while protecting both parties' interests. The agreement becomes especially important given India's strict regulatory framework for financial intermediaries and the need for clear documentation of roles, responsibilities, and compliance obligations.
Suggested Sections

1. Parties: Identifies the loan broker and the principal company, including their registered addresses and company details

2. Background: Explains the context of the agreement, including the broker's qualifications and the principal's business needs

3. Definitions: Defines key terms used throughout the agreement, including technical and financial terms

4. Scope of Services: Detailed description of the loan broking services to be provided

5. Broker's Obligations: Specific duties and responsibilities of the broker, including regulatory compliance requirements

6. Principal's Obligations: Responsibilities of the principal company, including provision of necessary information and documentation

7. Compensation Structure: Details of brokerage fees, commission rates, and payment terms

8. Regulatory Compliance: Compliance requirements under Indian financial regulations and applicable laws

9. Confidentiality: Provisions for handling confidential information and data protection obligations

10. Term and Termination: Duration of the agreement and conditions for termination

11. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority

12. Liability and Indemnification: Allocation of risks and responsibilities between parties

13. Dispute Resolution: Procedures for handling disputes, including jurisdiction and governing law

14. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment

Optional Sections

1. Non-Compete: Restrictions on broker's ability to work with competitors, include when exclusivity is required

2. Marketing and Branding: Guidelines for using principal's brand and marketing materials, include when broker will be involved in marketing activities

3. Training and Support: Details of training provided by principal to broker, include when ongoing support is part of the relationship

4. Performance Metrics: Specific targets and performance evaluation criteria, include when performance-based compensation is involved

5. Insurance Requirements: Specific insurance coverage requirements for the broker, include when dealing with high-value transactions

6. Sub-broking Arrangements: Terms for engaging sub-brokers, include when sub-broking is permitted

7. Digital Services: Terms specific to online or digital loan broking services, include when digital platforms are used

Suggested Schedules

1. Schedule 1 - Fee Structure: Detailed breakdown of commission rates, fees, and payment calculations

2. Schedule 2 - Service Level Agreement: Specific service standards, response times, and performance metrics

3. Schedule 3 - Compliance Checklist: List of regulatory requirements and compliance procedures

4. Schedule 4 - Required Documentation: List of documents required for loan processing

5. Schedule 5 - Territory Definition: Geographic areas where broker is authorized to operate

6. Appendix A - Standard Operating Procedures: Detailed procedures for loan application processing and documentation

7. Appendix B - Reporting Templates: Standard formats for periodic reporting and documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Insurance

Real Estate

Mortgage Services

Microfinance

Corporate Finance

Retail Banking

Commercial Banking

Investment Banking

Consumer Finance

Small Business Lending

Relevant Teams

Legal

Compliance

Finance

Risk Management

Operations

Business Development

Credit

Partnerships

Commercial

Regulatory Affairs

Relevant Roles

Chief Financial Officer

Legal Counsel

Compliance Officer

Business Development Manager

Loan Officer

Financial Services Manager

Risk Manager

Operations Manager

Channel Partnership Manager

Relationship Manager

Credit Manager

Financial Controller

Legal Director

Compliance Director

Head of Lending

Chief Risk Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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