Fair Practices Code
No.
FCFSL/C-001
Revised: 01 August, 2016
1. Scope
1.1 Applicability
This
Fair Practices Code (hereinafter referred as this “Code”) applies to Fraternal
Credit & Financial Services Limited (hereinafter referred as “Company”) and to all the services
offered by the Company, whether over the phone, across the counter, on the
internet or by any other means. It shall also apply to all the employees of the
Company.
1.2 Effective Date
This Fair Practices
Code is effective as of August 1, 2016.
2. Objectives and Overview
Company
is a Non-Banking Financial Company registered with, and regulated by, the Reserve Bank of India (hereinafter
referred as “RBI”) and is in the
business of Hire Purchase Finance for new and second-hand vehicles and
equipment.
The
Company has framed and adopted this Code, which sets the standards for fair
practice to be adopted by the Company while doing Hire Purchase Finance
business. The Code has been framed based on the Guidelines issued by RBI on Fair
Practices Code to be adopted by all Non-Banking Financial Companies (“NBFC”)
and industry best practices.
2.1 Objectives of the Fair Practices Code
This Code requires
the Company to maintain procedures:
a) To promote good
and fair practices by setting minimum standards to be followed while doing Hire
Purchase Finance business and while dealing with customers;
b) To increase
transparency so that the customers can have better understanding of the
products/services being offered by the Company;
c) To promote a fair and cordial relationship between
customers and the Company;
d) To foster
confidence in financial services system.
3. Fair Practice Code Minimum
Requirements
3.1 Applications for loans and their
processing
a) All
communications to the borrower shall be in the vernacular language or a
language as understood by the borrower.
b) At the time of
sourcing a loan, we shall provide information about the interest rates
applicable, as also the fees / charges, if any, payable for processing,
pre-payment options and charges, if any, and any other matter 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.
c) The documents required to be submitted by the borrower
for availing the loan shall be indicated to the borrower at the time of
sourcing the loan.
d) The Company
shall issue an acknowledgement receipt for all loan applications.
e) The Company
shall endeavor to dispose the loan applications within 21 working days or such
extended time as may be mutually agreed between the borrower and the Company
from the date of receipt of the application form complete in all respects.
Within such timelines, the Company shall communicate sanction or rejection of
the loan application to the Customer.
3.2 Loan Appraisal and Terms and
Conditions
a) The customer
shall be informed by means of a written sanction letter, in the vernacular
language or a language understood by the borrower, about the amount of loan
sanctioned along with all important terms and conditions including annualized
rate of interest, method of application, prepayment charges etc. The Company
shall keep the written acceptance of these terms and conditions by the borrower
on its record.
b) The penal
interest charged for late repayment shall be mentioned in the loan agreement.
c) A copy of the
loan agreement along with a copy each of all enclosures quoted in the loan
agreement, in the vernacular language or a language understood by the borrower,
shall be furnished to every borrower at the time of disbursement of loans.
3.3 Rate of Interest Charged by the Company
a) The Board of
Directors of the Company shall adopt a Policy for Determination of Interest
Rates to be charged for loans and advances and the same shall be placed on
website of the Company www.fraternalcredit.com and
displayed in Company’s notice board.
b) The rate of interest shall be disclosed to the borrower
in the application form/communicated explicitly in the sanction letter. The
rates of interest shall also be made available on the web-site of the Company www.fraternalcredit.com and
prominently displayed in Company’s notice board.
c) The rate of
interest shall be annualized rates.
3.4 Disbursement of Loans Including Changes in
Terms and Conditions
a) The Company
shall 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,
other applicable fee/charges etc. The Company shall ensure that changes in
interest rates and charges are effected only prospectively. A suitable
condition in this regard shall be incorporated in the loan agreement.
b) The Company’s decision to recall/accelerate payment or
performance under the loan agreement or seeking additional securities, shall be
in consonance with the loan agreement signed with the borrower.
c) The Company shall 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 which the Company may have against
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.
d) In case of receipt of request from the borrower for
transfer of borrowed account, the consent or otherwise i.e. objection of the
Company, 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.
3.5 Guarantors
When an individual person intends to be
a guarantor for a loan, he/she shall be informed about:
a) his/her
liability as guarantor;
b) the amount of
liability he/she will be committing himself/herself to the Company as
guarantor;
c) circumstances
in which the Company may call on him/her to pay up his/her liability;
d) whether his/her
liabilities as a guarantor are limited to a specific quantum or are they
unlimited; and
e) time and
circumstances in which his/her liabilities as a guarantor will be discharged as
also the manner in which the Company will notify him/her about this; the
Company shall keep him/her informed of any material adverse change/s in the
financial position of the borrower for whom he/she stands as a guarantor.
3.6 Privacy and Confidentiality
The Company shall treat the personal
information of customers, even when the customer is no longer a customer, as
private and confidential. The Company will not reveal the personal data or
personal information of customer to anyone except when:
a)
Required by law
b)
Pursuant to duty towards public to reveal information
c)
With customers permission
The Company shall not use customer’s
personal information for marketing purposes unless the customer specifically
authorizes us to do so.
3.7 Collection of Dues
a) At the time of sanction/disbursement of loans, the
Company shall explain to the customer the repayment process by mentioning
amount, tenure and periodicity of repayment in the Welcome Letter/Sanction
Letter/Loan Agreement/Most Important Document, etc. However, if the customer
does not adhere to the agreed terms of repayment or does not clear his/her dues
with the Company, a defined process in accordance with the laws of the land
shall be followed for recovery of dues. The process will involve reminding the
customer by sending him/her notice or by making personal visits and/or
repossession of security, if any.
b) The Company’s
collection policy/process shall be built on courtesy, fair treatment and
persuasion. The Company believes in fostering customer confidence and longterm
relationship. Staff or any person authorized to represent the Company in
collection of dues or/and security repossession shall identify himself/herself
and, upon request, display his/her authorization issued by the Company.
c) All the members
of the staff or any person authorized to represent the Company in collection
and/or security repossession shall follow the guidelines set out below:
i. Customer would be contacted ordinarily at the
place of his/her choice and in the absence of any specified place,
at the place
of his/her residence and if unavailable at his/her residence, at the place of
business/occupation.
ii.
Identity and authority to represent the
Company shall be made known to the customer at the first instance.
iii.
Customer's privacy should be respected.
iv.
Interaction with the customer shall be in a
civil manner.
v. Company’s representatives shall contact the
customers between 0700 hrs and 1900 hrs, unless the
special circumstances of
the customer's business or occupation require otherwise.
vi.
Customer's request to avoid calls at a
particular time or at a particular place shall be honoured, as far as possible.
vii.
Time and number of calls and contents of
conversation would be documented.
viii.
All assistance should be given to resolve
disputes or differences regarding dues in a mutually acceptable and in
an
orderly manner.
ix.
During visits to customer's place for dues
collection, decency and decorum shall be maintained.
x.
Inappropriate occasions such as bereavement
in the family or such other calamitous occasions should be
avoided for making
calls / visits to collect dues.
d) The Company shall ensure that its staff is adequately
trained to deal with the customers in an appropriate manner.
e) The Company
shall ensure that the following terms and conditions are mentioned in the
Contract/loan agreement with the borrower:
·
Notice period before taking possession;
·
Circumstances under which the notice period
can be waived;
·
The procedure for taking possession of the
security;
· A provision regarding final chance to be
given to the borrower for repayment of loan before the sale/auction of the
Security;
·
The procedure for giving repossession to the
borrower; and
·
The procedure for sale/auction of the
Security.
3.8 Grievance Redressal Mechanism
a) The Board of Directors of the Company has laid down an
appropriate Grievance Redressal Mechanism within the Company to resolve
disputes raised by customers.
b) The name and
contact details of the Grievance Redressal Officer who can be approached by the
public for resolution of complaints against the Company are mentioned below
(also displayed in Company notice board):
Grievance
Redressal – Contact Details
Mr. K.B.
Jayaprakash,
Grievance
Redressal Officer, Director,
Fraternal
Credit & Financial Services Ltd.
Email:
fraternalcredit@gmail.com
Phone:
9446555111.
Customer
may send a written communication to our office at the following address:
Mr.
K.B. Jayaprakash, Grievance Redressal Officer
Fraternal
Credit & Financial Services Ltd.
XVI/263/0,
Fraternal Complex, Near Vyaparabhavan
Chanthakunnu
P.O.
Irinjalakkuda 680121, Kerala.
If
the complaint / dispute are 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 of RBI. The details of Officer-in-Charge,
DNBS, RBI are given below:
Officer-in-Charge,
Department
of Non-Banking Supervision,
Reserve
Bank of India
Bakery
Junction, P.B. No. 6507
Thiruananthapuram,
PIN: 695033
Phone
No: 0471-2338818
3.9 General
a) If the Company deems necessary, it shall verify the
details mentioned by the customer in the loan application by contacting the
customer at his/her residence and/or business addressees directly or through
agencies appointed for the purpose.
b) The Company shall not discriminate between our
customers on the basis of age, race, caste, gender, marital status, religion,
or disability. However, this shall not preclude the Company from instituting or
participating in schemes framed for different sections and age groups of the
society.
c) The Company shall refrain from interference in the
affairs of the borrower 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).
d) The Board of Directors of the Company shall provide
for periodical review of the compliance with this Code and the functioning of
the Grievances Redressal Mechanism at various levels of management. A
consolidated report of such reviews shall be submitted to the Board at regular
intervals, as may be prescribed by it.
www.fraternalcredit.com and Company notice board.
Rev. 1.8.2016