Fair Practice Code

This has reference to RBI Circular No. 2012-13/416/DNBS. CC. PD No. 320 /03.10.01/2012-13 dated 18th February, 2013, wherein the Reserve Bank of India (RBI) has revised the guidelines on Fair Practices Code for NBFCs to implement the same.

The Fair Practices Code, as mentioned herein below, is in conformity with these Guidelines on Fair Practices Code for NBFCs as contained in the aforesaid RBI Circular. This sets minimum Fair Practice standards for the Company to follow when dealing with customers. It provides information to customers and explains how the Company is expected to deal with them on a day to day basis and this policy applies to all customers.

  1. Applications for loans and their processing :
  • All communications to the borrower will be in the vernacular language or a language as understood by the borrower.
  • Loan application forms will include necessary information which affects the interest of the borrower. The loan application form will also indicate the documents required to be submitted with the application form.
  • Necessary acknowledgement for receipt of all loan applications shall be given including time taken by company in disposing off the application.

 

2. Loan appraisal and terms / conditions :

The Company will convey following in writing to the borrower in the vernacular language or a language as understood by the borrower by means of sanction letter or otherwise:

    1. Amount of loan sanctioned;
    2. Rate of Interest and method of application thereof;
    3. Rate of penal interest for late repayment in bold in the sanction letter / loan agreement;
    4. Terms of repayment;
    5. Other terms;

The Company will furnish a copy of the loan agreement preferably in the vernacular language or a language as understood by the borrower 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

3. Disbursement of loans including changes in terms and conditions :

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. The Company will also ensure that changes in interest rates and charges are effected prospectively. A suitable condition in this regard shall also be incorporated in the loan agreement.

4. Decision to recall / accelerate payment or performance under the agreement should be in consonance with the loan agreement.

5. The 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 NBFCs 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 NBFCs are entitled to retain the securities till the relevant claim is settled / paid.

6. No interference in the affairs of the borrower shall be there by the company except for the purposes provided in the application form should be done.

7. In case of receipt of request from the borrower for transfer of account, the required transfer of debt should be done as per the terms of the agreement with the company and all the necessary documents required for transfer of debt i.e. objection certificate, written consent etc. should be made available within 21 days of the receipt of the request. It shall be ensured that such transfer shall be as per transparent contractual terms in consonance with law.

8. No undue means shall be resorted by the company in respect of recovery of loans from any of the borrowers. The Company also ensures to keep staff adequately trained to deal with the customers in an appropriate manner.

9. The Board of Directors of the Company has laid down appropriate grievance redressal mechanism within the organization to resolve disputes arising in this regard. 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 from time to time.

10. The Company has appointed Shri Devendrasinh Bharatsinh Gohil whose details are given below as Nodal Officer, who can be approached by the public for resolution of complaints against the company and whose details are given below :

Full Name 

Shri Devendrasinh Bharatsinh Gohil

Communication

Address

206, Second Floor, Business Bay, Street No. 6, Royal Park, Kalawad Road, Rajkot – 360005.

Contact number

+91-98244 24228

E-mail id

dbfs263@yahoo.in

 11. The applicant along with the signatures of all the guarantors, if any should duly sign the loan application form submitted to the company.

12. The documents will contain a clause that any change in interest rates and terms & conditions of loan due to change in government policy should result in the revision of interest and terms and conditions.

13. Quick release of the assets should be done after the repayment of loan or outstanding balance, which shall not be later than 30 days except any amount due or claim which COMPANY has against the borrower. If any claim is due against which the set off is to be done, the notice regarding the same should be issued with full particulars about the remaining of claims and the conditions under which the company are entitled to retain the securities till the relevant due amount is paid / settled.

14. Regulation of interest rates and processing and other charges:

 

  • The Company will adopt an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium etc. 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.
  • The rates of interest and the approach for gradation of risks will also be made available on the web-site of the company, if any. The information published in the website or otherwise published will be updated whenever there is a change in the rates of interest.
  • The rate of interest will be annualised rates so that the borrower is aware of the exact rates that would be charged to the account.
  • NBFC-MFIs:

Since Company is not carrying any micro finance activities, relevant fair practices are not required to be adopted by the Company.

  • Lending against collateral of gold jewellery:
  1. The Board has approved following policy with regards to lending against gold to individuals :
  • Adequate steps to ensure that the KYC guidelines stipulated by RBI are complied with and to ensure that adequate due diligence is carried out on the customer before extending any loan.
  • Proper assaying procedure for the jewellery received.
  • Internal systems to satisfy ownership of the gold jewellery.
  • There shall be adequate systems for storing the jewellery in safe custody, reviewing the systems on an on-going basis, training the concerned staff and periodic inspection by internal auditors to ensure that the procedures are strictly adhered to. As a policy, loans against the collateral of gold should not be extended by branches that do not have appropriate facility for storage of the jewellery.
  • The jewellery accepted as collateral should be appropriately insured.
  • Transparent auction procedure in case of non-repayment with adequate prior notice to the borrower. There shall be no conflict of interest and the auction process should ensure that there is arm’s length relationship in all transactions during the auction including with group companies and related entities.
  • The auction shall be announced to the public by issue of advertisements in at least 2 newspapers, one in vernacular language and another in national daily newspaper.
  • As a policy the NBFCs themselves shall not participate in the auctions held.
  • Gold pledged will be auctioned only through auctioneers approved by the Board.
  • The policy shall also cover systems and procedures to be put in place for dealing with fraud including separation of duties of mobilization, execution and approval.
  1. The loan agreement shall also disclose details regarding auction procedure.
  • Lending against Property (Mortgage Loan) :

The Board has approved following policy with regards to lending against property:

  • Adequate steps to ensure that the KYC guidelines stipulated by RBI are complied with and to ensure that adequate due diligence is carried out on the customer before extending any loan.
  • Proper assaying procedure for the Property offered for Mortgage.
  • Robust system to satisfy ownership of the property through obtaining Title / Ownership Report by accessing to the statutory records relating to property.
  • Internal system to evaluate / assess current market price value of the property through obtaining valuation Report.
  • Execution of Mortgage Deed / other relevant documents in fair and transparent manner.

Approved by the Board of Directors in their meeting held on 18th April, 2016

 

 

 

 

 

Date : 18th April, 2016

Place : Rajkot                       

 

 

 

_____________________

Signature

Devendrasinh Gohil

Managing Director

(DIN: 05278769)