FAIR PRACTICE CODE

Introduction:
This Fair Practice Code is aimed to provide to all the customers effective overview of practices followed by the company in respect of the financial facilities and services offered by the company to its customers. This code is in accordance with Reserve Bank of India guidelines issued by the Department of Non-Banking Financial Companies vide Master Circular RBI/2014-15/34 DNBS (PD) CC No.388/03.10.042/2014-15 dated 1st July, 2014 on Fair Practices Code for NBFCs

Objective:
This code has been developed:

• To promote good, fair and trust‐worthy practices by setting standards in dealing with customers
• To ensure transparency in the Company’s dealings with its customers
• To ensure compliance with legal norms in matters relating to recovery of advances
• To enable customers to have better understanding of what they can reasonably expect of the services offered by the Company
• To reckon with market forces, through competition and strive to achieve higher operating standards
• To strengthen mechanisms for redressal of customer grievances

Application For Loans And Their Processing:

• All Loan Application Forms shall contain detailed information relating to the terms and conditions governing the Loan and other relevant information affecting the interest of our valuable customers. These forms shall also contain the particulars of standard documents to be submitted with the Application Form. However, the Company may, depending on the credit underwriting requirements require other documents from the customers, as it may deem fit
• The Company explains to the customers the contents of various loan documents in the vernacular language and further ensures that the customer understands the terms and conditions governing the Loan.
• Loan application forms shall include necessary information which affects the interest of the borrower, so that a meaningful comparison with the terms and conditions offered by other NBFCs can be made and informed decision can be taken by the borrower. The loan application form may indicate the documents required to be submitted with the application form.
• Wherever applicable, the Company shall follow the system of issuing acknowledgements for receipt of all loan applications. The Company will consider all the documents submitted and the information provided, verify the credit worthiness of the customer and evaluate the proposal at its sole discretion. The Company shall further endeavour to intimate the status of all loan applications regarding its acceptance or rejection within 7 working days of receiving the application along with all necessary documents.
• The completed loan application form shall indicate the loan amount to be disbursed, information which affects the interest of the borrower, the annualised rate of interest applicable, processing fee (if any), dates of interest payments due, loan tenure etc. Company shall provide the acknowledgement receipt of the loan application form with the time frame within which loan applications will be disposed of.
• Credit Fair shall convey or explain to the borrower in the vernacular language his/her/their loan sanction Amount, Rate of Interest, EMI date , Monthly EMI Amount, Etc. and preserve the call recording for office records. The company shall also collect the vernacular declaration regarding the acceptance of the terms and conditions by the borrower in his/her/their langauage.

Loan Appraisal And Terms And Conditions:

The company shall convey or explain to the borrower in the vernacular language as understood by the borrower the following particulars:

• Assets details
• Sanctioned Loan Amount
• Rate of Interest to be charged
• Tenure of loan
• Installment amount and structure
• EMI Date

The Company shall furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction / disbursement of loans.

Company shall mention the penal interest charged for late repayment in bold in the loan agreement.

Acceptance of the Sanction Letter by the customer shall be kept on record

Disbursement Of Loans Including Changes In Terms And Conditions:

The Company will give notice to all it’s borrower for any change and conditions and for any changes in the disbursement schedules, rates of interest or other prepaid charges etc. Proper mention will be made in the Loan agreement as and when required.

Recall Of Loan:

Any decision to recall or accelerate the payment will be carried out as per the Loan agreement.

Release Of Securities:

The Company will release all the securities on repayment of its loan in full and realisation of all outstanding amounts of the loan by the customers subject to any legitimate right to lien for any outstanding claim of the Company against its borrower(s). The Borrower(s) will be given appropriate notice(s) about the claim retained by the Company against the outstanding of the borrower

Company shall ensure that the charge over any security provided by the customer is relinquished upon the happening of any of the following events, subject to any legitimate right or lien for any other claim against the customer:

• payment of all dues by the customer
• transfer of account and consequent settlement of all dues.
• closure of the loan file in due course following settlement as per agreement

In the event any other right or lien exists, the customer shall be notified about the same with full particulars thereof.

General Clauses

• Transfer of Account

Whenever a request for transfer of loan account is received from a customer, Company shall respond to the same within 21 days of receipt of request. Acceptance or refusal thereof shall be in accordance with terms of the agreement. Such transfer shall be as per transparent contractual terms in consonance with law.

• Recovery Process

If any recovery proceedings need to be initiated, these shall be conducted in accordance with the rights provided under the Agreement and in accordance with legally accepted norms. We train our staff adequately to deal with the customers in an appropriate manner. The Company does not resort to coercive measures (like persistently bothering at odd hours, use of muscle power, rude behaviour or harassment from any of the staff of the Company) for recovery of loan.

• Foreclosure charges/ Pre-payment penalties on floating rate term loans

As a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loans by borrowers of the Company, Company shall not charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to all borrowers.

Repossession Of Security:

The Company has the right to take possession of the Asset by giving 30 days’ notice to the Borrower to clear the dues or to hand over possession of the Asset. Such notice need not be given in the following circumstances:

• when the Borrower agrees for waiver of such notice
• when the Borrower has expressed his willingness to surrender the possession of the Asset voluntarily
• when there is reasonable apprehension to the Lender or its officers/agents that such notice may defeat the taking of possession of the Asset due to any foul play or forcible resistance from the part of the Borrower/Guarantor(d) when the Asset remains abandoned by the Borrower for any reason
• when the Borrower ceases to exist and
• for any other similar reasons so as to facilitate peaceful taking possession of the Asset by the Lender
• on such other conditions as mentioned in the loan agreement executed between the Company and the borrower

The procedure for taking possession of the Asset includes

• when the Borrower fails to follow the demand made in the above referred notice, the Lender may approach appropriate forum for an order enabling it to take possession of the Asset by suitable ways either by way of a commissioner or receiver
• by asking the customer personally to surrender the vehicle/Assets at a place convenient to the Lender
• by compelling the Borrower to hand over possession through the authorities so as to prevent the use of the Asset by the Borrower

The above two clauses (i and ii) are not applicable to the cases wherein the Borrower surrenders the Asset voluntarily.

Provision regarding final chance to be given to the borrower for repayment of the loan before the sale / auction of the property

• The Lender is entitled to transfer in any form like sale, rental and conversion for own use etc. the Asset, the possession of which is obtained in any of the ways stated above or otherwise, in connection with the default, in the way convenient to the Company and appropriate the proceeds thereof towards repayment/dues from the Borrower, when the Borrower and Guarantor fails to follow the notice for repayment of the dues within 7 days in any of the modes of service of such notice at the convenience of the Lender, as a final chance to avoid the transfer under this clause. This right to transfer does not take away the sole discretion of the Company to return the possession of the Asset in appropriate cases

If such sale proceeds are insufficient to discharge the entire dues, Lender shall move further against the Borrower and/or the Guarantor and if the sale proceeds exceeds the due, the balance shall be paid to the Borrower when he claims it. However the above entitlement is no bar for the Lender to proceed against the Borrower and/or Guarantor directly, sparing the proceedings against the security.

The Lender is entitled to recover from the Borrower all types of expenses on full indemnity basis, incurred by or on behalf of the Lender in ascertaining the where about of the Asset, taking possession, garaging, insuring, transporting and selling the Asset and also for other legal steps in connection with this Agreement.

Responsibility Of Board Of Directors:

The Board of Directors or the Committee thereof of Company shall lay down appropriate grievance redressal mechanism within the organization. Such a mechanism should ensure that all disputes arising out of the decisions of Company’s functionaries are heard and disposed of at least at the next higher level. The Board of Directors either through itself or by through any Committee thereof shall also provide for periodical review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management. A consolidated report of such reviews may be submitted to the Board at regular intervals, as may be appropriate.

Grievance Redressal And Customer Relationship Management:

It shall be the endeavour of the Company to improve the quality of service and redress complaints and grievances, if any, of the customers as part of Customer Relationship Management.

Customer complaints, shall in the first instance, be logged in at the nearest branch between the business hours commencing from 10.30 am to 6.00 pm except on holidays.

The Company shall disclose the following at all its branches/ places where business is transacted and on its website :

• the name and contact details (Telephone / Mobile nos. as also email address) of the Grievance Redressal Officer who can be approached by the public for resolution of complaints against the Company.
• that if the complaint / dispute is not redressed within a period of one month, the customer may appeal to the Officer-in-Charge of the Regional Office.

Interest Rates And Gradation Of Risk

• At the time of Sanctioning of the Loan all terms and conditions of the Loan including the payment of interest along with the tenure of the Loan will be communicated to the Borrower.
• The Risk and Rationale for charging different rates of interest to different categories of borrowers shall be disclosed to the Customers while making the application and or while issuing the sanctioned letter.

The Company shall disclose the interest rates and gradation of risks on its website.

Board Of Director Meetings And Review

Fair Practice Code Committee shall oversee the implementation of the code and shall review its functioning periodically.