Fair Practice Code
The board has formulated the following Fair Practice Code in line with directions issued by the Reserve Bank of India to Non-banking financial companies (NBFCs).
Fair Practice Code
The board has formulated the following Fair Practice Code in line with directions issued by the Reserve Bank of India to Non-banking financial companies (NBFCs).
Pursuant to the directions issued by the Reserve Bank of India in Master Direction
DNBR.PD.007/03.10.119/2016-17 dated 01.09.2016 issued to Non-banking financial companies
(NBFCs), the Board has formulated Fair Practice Code.
1. Application for Loans and their Processing
1.1
The Company will put loan applications through a process of due diligence to assess whether the loans sought will conform to its current lending policies and meet its credit and legal requirements.
1.2
All communications to the borrower shall be in the vernacular Language or a language as understood by the applicant.
1.3
Loan Application Forms 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 indicates the documents required to be submitted with the application form.
1.4
The Company would give acknowledgement for receipt of all loan applications. The communication process is automated and once the KYC is validated, client account is created instantly with a dashboard available for them to track their application status etc.
2. Loan appraisal and terms / conditions
2.1
The Company shall convey in writing to the borrower by means of sanction letter, the amount of loan sanctioned along with the terms and conditions including annualised rate of interest and method of application thereof. The Company shall keep the acceptance of these terms and conditions by the borrower on its record. The Company shall also communicate to the borrower if the loan is rejected. The Company shall mention the penal interest charged for late repayment in the loan agreement.
3. Disbursement of loans including changes in terms and conditions
3.1
The Company shall give notice to the borrower in the vernacular language or as understood by the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges etc. On disbursement of loans including changes in terms and condition that Customers will be given notice in the vernacular language or a language as understood by the borrower. The Company shall ensure that changes in interest rates and charges are affected only prospectively. The Company shall not charge foreclosure charges / pre-payment penalties on all floating rate term loans sanctioned to individual borrowers.
3.2
Decision to recall / accelerate payment or performance under the agreement shall be in consonance with the loan agreement.
3.3
The Company shall release all securities on repayment of all dues or on realisation of the outstanding amount of loan, subject to any legitimate right or lien for any other claim the Company may have against the borrower. If such right of set off is to be exercised, the borrower shall be given notice about the same with 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.
4. General
4.1
The Company shall refrain from interference in the affairs of the borrowers except for the purposes 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.
4.2
In case of receipt of request from the borrower, the transfer of borrowal account, the consent or otherwise i.e the Company’s objection, if any, shall 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.
4.3
The Company would not discriminate on grounds of sex, caste and religion in the matter of lending. However, this does not preclude the Company from participating in credit-linked schemes framed for weaker sections of the society.
4.4
In the matter of recovery of loans, the Company shall not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc. The Company’s staff are adequately trained (including not to behave rudely) to deal with the customers in an appropriate manner.
4.5
The Company has laid out appropriate internal principles and procedures in determining interest rates and processing and other charges and also to ensure transparency in respect of terms and conditions of the loans.
4.6
The company shall ensure that its publicity and promotional literature and other materials are not misleading.
4.7
The Company shall treat as confidential non-public private information it receives about its customers in the course of its business, and shall not disclose the information to others except where:
- Required by law or by a judicial, quasi-judicial, or regulatory authority; or
- The Company is obliged to disclose in the public interest;
- The Company’s interests require disclosure or
- The customer has consented to or asked for such disclosure
5. Disclosure to credit reference agencies
5.1
The customer shall be informed that the details of the customer’s account shall be passed on to credit reference agencies.
5.2
The Company may give credit reference agencies other information about the customer’s account if the customer has given his / her permission to do so.
5.3
The Company shall, if demanded by the customer, furnish a copy of the information submitted to the credit reference agencies.
6. Responsibility of Board of directors
6.1
Grievances Redressal Mechanism has been laid down by the Board of Directors to ensure that all disputes arising out of the decisions of the functionaries are heard and disposed of at least at the next higher level.
6.2
Periodical review of the compliance of Fair Practices Code and functioning of the Grievances Redressal Mechanism has also been provided for at various levels of management and a consolidated report of such reviews will be submitted to the Board of Directors.
7. Grievances
7.1
The Company shall address/respond to all complaints/grievances within a reasonable time and shall update the customer as to the status of redressal of the complaints /grievances.
7.2
A review of compliance of the Fair Practices Code and the functioning of the grievance redressal mechanism would be done at various levels of management regularly and a consolidated report of such reviews will be submitted to the Board of Directors once in 6 months.
7.3
Grievances, if any, shall be addressed by:
Name: Gorav Gupta
Designation: Director
Address: Navin’s Presidium, 103, B Block 8th Floor, Nelson Manickam Road, Aminjikarai,
Chennai – 600029.
Email ID: [email protected]
Contact No.:9841663644
Grievances officer can be approached by the public for resolution of complaints against the Company.
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 of Department of Non-Banking Supervision (DNBS), Reserve Bank of India, Fort Glacis, Rajaji Salai, Chennai 600 001, Tamil Nadu, Tel: 044 25393406, under whose jurisdiction the registered office of the Company falls.
For the benefit of our customers, the above information on “grievances” will be displayed at our
branches / places where business is transacted. In addition, drop box facility may be kept at all
branches to enable complaint letters to be physically lodged by the customers; a mechanism for
maintaining logbook for the same may be implemented.
8. Gradation of risk
The rate of interest specified for each loan is payable monthly, with the corresponding annualised rate being arrived at through DigiMoney Finance Private Limited interest rate model which takes into account relevant factors such as cost of funds, margin and risk premium. The Company takes a comprehensive approach to the gradation of risk that does not discriminate between classes of borrowers, but rather tailors the interest rate to each loan. The decision to give a loan and the rate of interest thereon are carefully assessed on a case by case basis based on multiple factors which may include the borrower’s cash flows (past, current and projected), borrower’s other financial commitments, the borrower’s credit record, the security for the loan as represented by underlying assets or other financial guarantees etc. Such information is gathered based on information provided by the borrower, credit reports, market intelligence and information gathered by field inspection of the borrower’s premises.
9. Interest Rate Policy
9.1
The Company shall follow the appropriate internal principles and procedures in determining interest rates and processing and other charges in line with the approved policies from time to time.
9.2
The rate of interest specified for each loan is at monthly rests, with the corresponding annualized rate being arrived at through Company’s interest rate model which considers relevant factors such as cost of funds, margin and risk premium. The decision to give a loan and the rate of interest thereon are carefully assessed on a case by case basis based on multiple factors which may include the borrower’s cash flows (past, current and projected), borrower’s other financial commitments, the borrower’s credit record, the security for the loan as represented by underlying assets or other financial guarantees etc. Such information is gathered based on information provided by the borrower, credit reports, market intelligence and information gathered by field inspection.
9.3
The Company shall follow the interest rate model adopted and approved by the Board and made available on the website. The rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers will be disclosed in the application form and communicated explicitly in the sanction letter.
10. Copies of the Code
This Code will be posted on the Company’s website, and copies may also be obtained from its corporate and other offices.
11. Review of the Fair Practices Code
The Board shall review compliance with respect to all aspects of the Fair Practices Code annually.
