Independent Director — Financial Services (Series C · NBFC)

Reference: GILA/ID/SC-FS/2612 Board seat: Independent Director, Non-Executive — contractually constituted at the holding company; concurrent appointment to the regulated subsidiary board is contemplated Board meeting locations: Bengaluru and Mumbai Term: Three years, renewable Status: Live. Appointment sought within one quarter.

Anonymised client snapshot

A privately held financial services group built around a technology platform with a regulated lending entity inside it.

• Series C completed in the last 12–24 months, in the USD 60–150 million range, with participation from global growth investors alongside the existing Series A and B holders. Post-money valuation in the USD 500 million to USD 1.2 billion band.
• Two-entity architecture: a holding/technology company owning the customer interface, underwriting stack and distribution, and a wholly owned RBI-registered non-banking financial company through which regulated lending is conducted.
• Assets under management in the ₹3,000–9,000 crore range across own-book and partner-book, with a mix of co-lending arrangements, direct assignment and sourcing-and-servicing arrangements with banks and larger NBFCs.
• Product set spans unsecured personal and consumer credit, merchant or small-business lending, and a secured product being scaled, with substantial digital origination.
• Two founders, both operational; combined founder holding materially reduced by three rounds; investor directors now constitute the largest bloc on the board.
• An IPO is discussed internally on a three-to-five year horizon but is not an active process.

Why this seat exists

The company is at the precise stage where a growth-stage board becomes inadequate for a regulated business, and the mismatch is the risk.

The board today is composed of founders and investor nominees. Every investor nominee owes a duty to the company but arrived through a fund with a return horizon, a mark, and a portfolio construction logic. On most matters this is unproblematic. On a specific set of matters — the pace of growth in an unsecured book, the adequacy of provisioning, the treatment of a partner's first-loss obligation, whether a collections practice is defensible, whether to disclose an incident to the regulator — the interests are not naturally aligned, and there is currently no one in the room whose only obligation is to the company and its regulatory standing.

That is the seat. It is not a governance formality and the Series C investors negotiated for it specifically.

Structure of the appointment

This requires careful reading.

• The holding company is a private limited company and is not statutorily required to appoint an independent director. The seat arises under the Series C shareholders' agreement, which provides for an independent director appointed by agreement between the founders and a specified majority of the investors.
• The NBFC subsidiary is separately regulated. RBI's Scale Based Regulation framework, the applicable board and committee requirements for its layer, and the fit and proper criteria for NBFC directors including the declaration and undertaking and the deed of covenant, all apply at that entity. The company intends to appoint the successful candidate to the NBFC board as well, subject to that entity's own fit and proper process.
• Candidates should therefore expect two board seats, two sets of statutory duties, and a materially higher regulatory exposure than a typical private company independent directorship. The remuneration reflects this. Candidates who are not comfortable holding a directorship in an RBI-regulated entity should not proceed.

Board and committee position

Holding company board of seven: two founders, three investor nominees, one investor observer, and this seat. NBFC board of five to six with overlapping composition.

• Audit Committee (both entities) — Chair.
• Risk Management Committee (NBFC) — Member.
• Asset Liability Committee — board-level oversight participation.
• IT Strategy Committee (NBFC) — Member, per RBI's IT governance requirements.
• Customer Grievance and Conduct Review — Chair. A committee the company does not currently have and which this appointee is expected to establish.

Charter

1. Draw the regulatory perimeter, precisely. Which activities sit in the NBFC and which in the technology company; whether any activity conducted at the holding company is in substance a regulated activity; the intra-group service agreements and their arm's-length basis; how the outsourcing directions apply between the two entities; and whether the structure would survive an RBI inspection unchanged. This is the highest-consequence item on the list and the one least likely to be raised by anyone else on the board.
2. Digital lending compliance, substantively. The RBI Digital Lending Directions govern flow of funds, disclosure of the Key Fact Statement, all-inclusive APR presentation, cooling-off periods, the role and disclosure of lending service providers, and data collection limited to what is necessary. Compliance here is frequently documented rather than achieved. The Audit Committee should test it against actual customer journeys, not against a policy document.
3. Default Loss Guarantee arrangements. Where the company provides or receives DLG in a partner arrangement, the cap, the form, the recognition and provisioning treatment, and the disclosure to the partner's board all matter. Structures that exceed the permitted cap, or that achieve economically equivalent risk transfer through another instrument, are the sector's most common serious compliance failure. Assume nothing.
4. Provisioning adequacy and unseasoned book risk. In a fast-growing unsecured book, delinquency metrics computed on a rapidly expanding denominator systematically understate the real position. The board must see static pool and vintage curves by cohort, not portfolio-level DPD. If management has never presented this, that is itself the finding.
5. Collections practice. Recovery agent conduct, whether outsourced or in-house; call recording and monitoring; complaints alleging harassment and their disposition; and the escalation path when an incident occurs. This is the sector's largest reputational and regulatory risk, it is almost always outsourced, and boards almost always learn about problems from the press. Establish the Conduct Review Committee and give it teeth.
6. Fair practices and grievance redress. Fair Practices Code implementation, the internal ombudsman requirement where applicable, RBI Ombudsman awards and their pattern, and complaint root-cause analysis reaching the board.
7. Capital, liquidity and funding concentration. Capital adequacy at the NBFC against the applicable layer's requirement and against a stress scenario; ALM mismatches; lender concentration and the covenant package; and what happens to origination if the two largest lenders reduce lines simultaneously.
8. Cap table, preference stack and the founder question. Liquidation preference structure across three rounds and what it means for common shareholders in a mid-case exit; ESOP pool adequacy and the exercise-price position of employees granted at higher valuations; anti-dilution mechanics; and the honest conversation about the down-round scenario, which should be had before it is needed rather than during it.
9. Data and information security. DPDP Act obligations with a high likelihood of significant data fiduciary designation; RBI's IT governance and cyber requirements at the NBFC; CERT-In reporting; the security of the credit bureau interface; and third-party and API-partner risk.

Eligibility

• Section 149(6) applied as a voluntary benchmark at the holding company; RBI fit and proper criteria applied as a hard requirement at the NBFC, including the declaration and undertaking, the deed of covenant and the NBFC board's own assessment.
• Valid DIN, active KYC; no Section 164 disqualification; within Section 165 limits.
• No directorship, advisory role or investment in a competing lender or lending platform, and no relationship with the company's co-lending partners that would compromise independence in a partner negotiation.
• No borrowing relationship with the NBFC, personally or through connected entities.
• No pending SEBI, RBI, ED, SFIO or IBBI proceeding.
• Candidates who are partners or employees of a fund invested in the company, or of a fund with a competing portfolio position, are ineligible.

Profile sought

Essential

• Regulated lending experience at a senior level. Bank, NBFC or financial institution — in credit, risk, compliance, or as a CEO/CFO with regulatory accountability. The distinguishing test is whether the candidate has personally been accountable to a regulator for something that went wrong.
• Credit risk depth in unsecured or small-ticket lending, with an understanding of how these books behave in the second and third year rather than the first.
• Financial literacy sufficient to chair audit committees at two entities.
• Willingness to hold a directorship in an RBI-regulated entity, with the exposure that entails.

Strongly preferred

• Prior RBI supervisory, regulatory or compliance-head experience.
• Experience of a credit cycle turn in an unsecured portfolio — the 2018–19 or the 2020–21 experience is directly relevant and will be probed.
• Experience on a growth-stage board where founder and investor interests diverged, and of how that was handled.
• Understanding of the co-lending and partnership economics from the bank side of the table.
• Familiarity with what an eventual listing would require, without treating this as a pre-IPO seat — it is not, and candidates who position it that way will be screened out.

Time commitment

Holding company board 6–8; NBFC board 6–8 (the NBFC must meet at least quarterly and in practice meets more often); Audit Committees at both entities 4–6 each; Risk 4; IT Strategy 4; Conduct Review 4. Ad hoc availability during any regulatory interaction or incident.

Realistic total: 35–45 days per annum. This is a heavy seat and candidates should not underestimate it.

Remuneration and terms

• Fixed annual fees at both entities, set at a level reflecting the regulatory exposure and the time commitment. Indicative range shared at first interaction; it is materially above a typical private company independent director fee.
• Sitting fees for board and committee meetings at both entities.
• A modest equity or option grant at the holding company is available, time-vested over the term. Candidates should note that the RBI's compensation guidelines constrain variable and share-linked pay for directors of regulated entities, and any grant will be structured at the holding company level and disclosed. Candidates who prefer a cash-only arrangement may elect it without prejudice, and some will consider that the cleaner position given the regulated subsidiary role.
• Indemnity deed and D&O cover at both entities are conditions of appointment. Candidates should verify that the policy responds to regulatory investigation costs.

Process

Separate conversations with the founders, with two investor directors and with the NBFC's CEO and Chief Risk Officer → SYMPHONY™ assessment with a regulated-lending module → review under NDA of the last four quarters of board packs, the most recent RBI inspection correspondence where disclosable, and the DLG and co-lending arrangements → reference triangulation including one regulatory-side reference → NBFC fit and proper assessment → appointment at both entities.