(i) Applications for loans and its processing

1. All communications to the borrower will be in the vernacular language or a language as understood by the borrower.
2. Loan application forms will be include necessary information which affects the interest of the borrower. The loan application form will indicate the documents required to be submitted with the application form.
3. The Company will issue an acknowledgement for receipt of all loan applications with the 10 days’ time within which loan applications will be disposed.

(ii) Loan appraisal and terms/conditions

1. The Company will convey in writing to the borrower in the vernacular language as understood by the borrower by means of sanction letter or otherwise, the amount of loan sanctioned along with the terms and conditions including annualized rate of interest and method of application thereof and penal interest charged for late repayment in bold letters keep the acceptance of these terms and conditions by the borrower. A copy of the loan agreement as understood by the borrower along with a copy each of all enclosures quoted in the loan agreement will be issued to all the borrowers at the time of sanction / disbursement of loans.

(iii) Disbursement of loans including changes in terms and conditions

1. The Company will give notice to the borrower in the vernacular language or a language as understood by the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges etc. Company also ensure that changes in interest rates and charges are effected only prospectively. A suitable condition in that regard will be incorporated in the loan agreement.
2. Decision to recall / accelerate payment or performance under the agreement will be in consonance with the loan agreement.
3. Company will release all securities on repayment of all dues or on realization of the outstanding amount of loan subject to any legitimate right or lien for any other Claim Company may have against borrower. If such right of set off is to be exercised, the borrower will be given notice about the same with full particulars about the remaining claims and the conditions under which company is entitled to retain the securities till the relevant claim is settled/ paid.

(iv) General

1. The Company will refrain from interference in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement (unless information, not earlier disclosed by the borrower, has been noticed).
2. In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise i.e. objection of the company , if any, will be conveyed within 21 days from the date of receipt of request. Such transfer will be as per transparent contractual terms in consonance with law.
3. In the matter of recovery of loans, the company will not resort to undue harassment viz; persistently bothering the borrowers at odd hours, use muscle power for recovery of loans etc. The Company will ensure that the staff are adequately trained to deal with the customers in an appropriate manner.
4. The company will not charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, regard to prepayment of various loans by borrowers of the Company.

(v) Responsibility of Board of Directors

1. The Board of Directors of the company will also lay down the appropriate grievance redressal mechanism within the organization. Such a mechanism will ensure that all disputes arising out of the decisions of lending institutions' functionaries are heard and disposed of at least at the next higher level. The Board of Directors will 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 will be submitted to the Board at regular intervals, as may be prescribed by it.

(vi) Grievance Redressal Officer

The Company will display the following information prominently at their branches / places where business is transacted:

1. The name and contact details (Telephone / Mobile nos. and email address) of the Grievance Redressal Officer who can be approached by the public for resolution of complaints against the Company.
2. 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 DNBS of RBI (complete contact details), under whose jurisdiction the registered office of the NBFC falls.
3. A public notice will serve the purpose of highlighting to the customers, the grievance redressal mechanism followed by the company, together with details of the grievance redressal officer and of the Regional Office of the RBI.

(vii) Language and mode of communicating Fair Practice Code

1. Fair Practices Code will be in the vernacular language or a language as understood by the borrower based on the guidelines outlined hereinabove will be put in place by the company. The same will be put up on our web-site, if any, for the information of various stakeholders.

(viii) Regulation of excessive interest charged

1. The company will adopt an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium and determine the rate of interest to be charged for loans and advances. 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 to the borrower or customer in the application form and communicated explicitly in the sanction letter.
2. The rates of interest and the approach for gradation of risks will also be made available on the web-site of the companies or will be published in the relevant newspapers. The information published in the website or otherwise published will be updated whenever there is a change in the rates of interest.
3. The rate of interest will be annualized rate so that the borrower is aware of the exact rates that would be charged to the account.
4. The Company will lay down appropriate internal principles and procedures in determining interest rates and processing and other charges.

(ix) Clarification regarding repossession of vehicles financed

Company will built in re-possession clause in the contract/loan agreement with the borrower which must be legally enforceable. To ensure transparency, the terms and conditions of the contract/loan agreement will also contain provisions regarding:

1. Notice period before taking possession;
2. Circumstances under which the notice period can be waived;
3. The procedure for taking possession of the security;
4. A provision will be provided regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the property;
5. The procedure will lay down for giving repossession to the borrower;
6. The procedure for sale / auction of the property. A copy of such terms and conditions will be made available to the borrower in terms of circular wherein it was stated that Company may invariably 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, which may form a key component of such contracts/loan agreements.