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Fair Practices Code
This has reference to the RBI Circular No. 2006-07/138/DNBS (PD) CC No.80/03.10.042/2005-06 dated September 28, 2006, wherein the Reserve Bank of India (RBI) has issued draft Guidelines on Fair Practice Code for NBFC's.
RBI has asked NBFC's to implement Fair Practice Code based on these guidelines.
This Code sets minimum Fair Practice standards for the company to follow when it is dealing with the customer. It provides information to customers and explains how the company is expected to deal with the customers on day to day basis.
(I) Objective of the Code
The Code has been developed with an object to:
(II) Application of the Code
The Code applies to all products offered by the Company.
(III) The Code is Committed to
(a) To help borrower / customer to understand how Company's financial products and services work by:
(i) Ensuring that the customer is given clear information about Company's product and services, the terms and conditions and interest rates/service charges which apply to them.
(ii) Keeping customer informed about changes in the interest rates, charges, terms and conditions
(b) To act fairly and reasonably in all dealings with the customer;
(c) To treat personal information of customers as private and confidential
(IV) Information regarding Financial Products & Processing of Loan applications
(a) The customer shall be given information regarding interest rates, terms and conditions for loan and other charges. Besides this, all other necessary information which affects the interests of the borrower shall be furnished so that the borrower is in a position to make a meaningful comparison with the terms and conditions offered by other NBFCs and informed decision can be taken by the borrower.
(b) Acknowledgement shall be given on receipt of loan application documents. Normal time frame for processing of the Loan Application would also be informed to the customers
(c) After the loan is sanctioned, customer shall be informed about the interest rate at which loan is sanctioned, and method of application thereof, mode & time at which the interest will be debited (whether monthly or quarterly) and other terms and conditions applicable to loan.
(V) Disbursement of Loan including changes in Terms and Conditions
a) The Company would ensure timely disbursement of loans in conformity with the terms and conditions of loan sanctioned. It would give notice of any change in the terms and conditions including disbursement schedule, interest rates, service charges, repayment charges etc. It would ensure that changes in interest rates are changed only prospectively.
b) Decision to recall/accelerate payment or performance under the agreement shall be in consonance with the loan agreement.
c) The Company would release all securities on repayment of all dues or on realization of outstanding amount of loan subject to any legitimate right or lien for any other claim the company may have against the borrower with prior notice to borrower. The Notice will provide full particulars about the remaining claims and the conditions under which the company is entitled to retain the securities till the relevant claim is settled/paid fully.
(VI) Non-Interference in the Affairs of the Borrower : The Company should refrain from interference in the affairs of the borrower except for what is provided in the terms and conditions of the loan agreement (unless new information, not earlier disclosed by the borrower, has come to the notice of the company).
(VII) General
a) The Company shall treat customer information as private and confidential and shall be guided by following principles and policies:
The information shall be parted by the Company only in the following circumstances:
i. Information required to be given under law or as demanded or required by Statutory authorities
ii. Information is given with customer’s specific written permission
b) In case of receipt of request from borrower for transfer of borrowal account, the consent or otherwise i.e. objection by the company if any, would be conveyed within 21 days from the date of receipt of request, such transfer shall be as per transparent contractual terms in consonance with law.
c) In the matter of recovery of loan, the company would adopt legally valid processes and not resort to undue harassment or use of force viz. persistently bothering the borrower at odd hours, use of muscle power for recovery of loans etc.
(VIII) Grievance Redressal
Disputes arising out of decision of the company's functionaries would be disposed of at the next higher level. Grievance if any in connection with the code should be addressed to Ms. Sarabjeet Kaur in writing at the registered office of the company, M-6, IInd Floor, Greater Kailash - II, New Delhi - 110048.
(IX) Review
a. A review of compliance of the Code and the functioning of grievance redressal mechanism would be done by the Board of Directors once in 12 months.
RBI has asked NBFC's to implement Fair Practice Code based on these guidelines.
This Code sets minimum Fair Practice standards for the company to follow when it is dealing with the customer. It provides information to customers and explains how the company is expected to deal with the customers on day to day basis.
(I) Objective of the Code
The Code has been developed with an object to:
- Promote fair practices by setting minimum standards in dealing with customer
- Increase transparency so that customer can have a better understanding of what type of service level can be expected from the Company
- Foster customer confidence in the Company
(II) Application of the Code
The Code applies to all products offered by the Company.
(III) The Code is Committed to
(a) To help borrower / customer to understand how Company's financial products and services work by:
(i) Ensuring that the customer is given clear information about Company's product and services, the terms and conditions and interest rates/service charges which apply to them.
(ii) Keeping customer informed about changes in the interest rates, charges, terms and conditions
(b) To act fairly and reasonably in all dealings with the customer;
(c) To treat personal information of customers as private and confidential
(IV) Information regarding Financial Products & Processing of Loan applications
(a) The customer shall be given information regarding interest rates, terms and conditions for loan and other charges. Besides this, all other necessary information which affects the interests of the borrower shall be furnished so that the borrower is in a position to make a meaningful comparison with the terms and conditions offered by other NBFCs and informed decision can be taken by the borrower.
(b) Acknowledgement shall be given on receipt of loan application documents. Normal time frame for processing of the Loan Application would also be informed to the customers
(c) After the loan is sanctioned, customer shall be informed about the interest rate at which loan is sanctioned, and method of application thereof, mode & time at which the interest will be debited (whether monthly or quarterly) and other terms and conditions applicable to loan.
(V) Disbursement of Loan including changes in Terms and Conditions
a) The Company would ensure timely disbursement of loans in conformity with the terms and conditions of loan sanctioned. It would give notice of any change in the terms and conditions including disbursement schedule, interest rates, service charges, repayment charges etc. It would ensure that changes in interest rates are changed only prospectively.
b) Decision to recall/accelerate payment or performance under the agreement shall be in consonance with the loan agreement.
c) The Company would release all securities on repayment of all dues or on realization of outstanding amount of loan subject to any legitimate right or lien for any other claim the company may have against the borrower with prior notice to borrower. The Notice will provide full particulars about the remaining claims and the conditions under which the company is entitled to retain the securities till the relevant claim is settled/paid fully.
(VI) Non-Interference in the Affairs of the Borrower : The Company should refrain from interference in the affairs of the borrower except for what is provided in the terms and conditions of the loan agreement (unless new information, not earlier disclosed by the borrower, has come to the notice of the company).
(VII) General
a) The Company shall treat customer information as private and confidential and shall be guided by following principles and policies:
The information shall be parted by the Company only in the following circumstances:
i. Information required to be given under law or as demanded or required by Statutory authorities
ii. Information is given with customer’s specific written permission
b) In case of receipt of request from borrower for transfer of borrowal account, the consent or otherwise i.e. objection by the company if any, would be conveyed within 21 days from the date of receipt of request, such transfer shall be as per transparent contractual terms in consonance with law.
c) In the matter of recovery of loan, the company would adopt legally valid processes and not resort to undue harassment or use of force viz. persistently bothering the borrower at odd hours, use of muscle power for recovery of loans etc.
(VIII) Grievance Redressal
Disputes arising out of decision of the company's functionaries would be disposed of at the next higher level. Grievance if any in connection with the code should be addressed to Ms. Sarabjeet Kaur in writing at the registered office of the company, M-6, IInd Floor, Greater Kailash - II, New Delhi - 110048.
(IX) Review
a. A review of compliance of the Code and the functioning of grievance redressal mechanism would be done by the Board of Directors once in 12 months.
