Pursuant to Reserve Bank of India (“RBI”) Circular no. DNBR (PD) CC.No.054/03.10.119/2015-16 dated July 01, 2015 as may be updated from time to time (“Guidelines”), issued to Non-Banking Financial Companies (“NBFCs”), the Board of Directors have adopted a “Fair Practices Code” for Lord Krishna Financial Services Limited (“Company”) pursuant to the aforesaid Guidelines.
The Fair Practices Code, as adopted herein below, is in conformity with the Guidelines on Fair Practices Code for NBFCs as contained in the aforesaid RBI Circulars.
The Company's business will be conducted in accordance with prevailing statutory and regulatory requirements, with due focus on efficiency, customer-orientation and corporate governance principles. In addition, the Company will adhere to the Fair Practices Code in its functioning, the key elements of which are as follows:
- To ensure fair practice are followed while dealing with the customers;
- To enable customers to take informed decisions about our financial products and services;
- To ensure customer satisfaction; and
- To increase transparency.
APPLICATION FOR LOAN AND PROCESSING
- All communications to the borrower shall be in vernacular language or a language as understood by the Borrower.
- Loan application forms issued to prospective customers includes 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 thereby helping the borrower in making an informed decision. Loan application form also clearly indicates documents required to be submitted along with the application form.
- The Company has system of giving acknowledgement for receipt of all loan applications.
LOAN APPRAISAL AND TERMS & CONDITIONS
- In accordance with the Company’s appraisal norms, loan application will be considered and loan amount will be approved on merit basis. The Company shall convey in writing to the borrower in a vernacular language or a language as understood by borrower by means of a sanction letter or otherwise, the amount of loan approved along with the terms and conditions, including the annualized rate of interest and method of application thereof. Additionally, Penal Interest on late repayment is clearly highlighted in the sanction letter. The Company shall keep record of customer’s acceptance of all these terms and conditions.
- Company shall at the time of sanction / disbursement of the loan, furnish a copy of loan agreements and related enclosures to the customer.
- If we cannot provide the loan to the customer, we shall communicate in writing the reason (s) for rejection, if possible.
DISBURSEMENT OF LOAN AND CHANGE IN TERMS & CONDITIONS
- The Company shall give notice to all its borrowers in vernacular language or a language understood by the Borrower of any change in the terms and conditions – including disbursement schedule, interest rates, service charges, prepayment charges etc. The Company shall also ensure that changes in interest rates and charges are effected only prospectively. A suitable provision in this regard is incorporated in the loan agreement.
- Decision to recall / accelerate payment or performance under the agreement shall also be in consonance with the loan agreement.
- The Company shall release all securities on repayment of its full dues or on realization of the outstanding amount of loan subject to any legitimate right or lien for any other claim the Company may have against its borrowers. 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.
The Company will refrain from interference in the affairs of the borrower except for the purposes provided for in the terms and conditions of the loan agreement (unless new information, not earlier disclosed by the customer, has come to the notice of the Company).
The Company will not discriminate loan applications based on grounds of sex, caste and religion.
In case of receipt of request from the borrower for transfer of borrower account, the consent or otherwise – i.e., objection of the Company, if any – shall be conveyed to the borrower within 21 days from the date of receipt of any request. Such transfer shall be as per transparent contractual terms in consonance with law.
In the matter of recovery of loans, our Company staff is adequately trained to deal with customers and shall not resort to any harassment – such as persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc.
The Company has laid down appropriate internal principles and procedure in determining interest rates, processing fees and other charges. The Company has adopted an Interest rate policy taking into account relevant factors such as cost of funds, margin, risk premium etc. to determine the rate of interest to be charged on annualised basis for loans and advances and same is disclosed to the borrower in the loan application form and the sanction letter and also provided on the website of the Company.
The rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of customers shall be disclosed in the loan application form and communicated explicitly in the sanction letter.
REPOSSESSION OF HYPOTHECATED ASSETS FINANCED BY THE COMPANY
The Company has a built in re-possession clause in the loan agreement with the borrowers which is legally enforceable. To ensure more transparency, the terms and conditions of the loan agreement contains provisions regarding:
- 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 property.
PRIVACY AND CONFIDENTIALITY
All Personal Information of the borrowers shall be treated as Private and Confidential, and shall be guided by the following principles & policies. We shall not reveal Information or data relating to borrower accounts, whether provided by the customers or otherwise, to anyone, including our affiliates other than in the following exceptional cases:
If the information is to be given by law.
If there is a duty towards the public to reveal the information.
If our interests require us to give the Information (for example, to prevent fraud) but it shall not be used as a reason for giving information about the borrower or borrower’s accounts (including customer came & address) to anyone else for marketing purposes.
If the borrower asks us to reveal the information, or with the borrower’s permission.
If we are asked to give a reference about a borrower, we shall obtain his / her written permission before giving it.
The borrower shall be informed the extent of his / her rights under the existing legal framework for accessing the personal records that we hold about him / her.
We shall not use borrower’s personal information for marketing purposes by anyone including ourselves unless the customer specifically authorizes us to do so.
GRIEVANCE REDRESSAL MECHANISM
- The Company believes in speedy redressal of grievances of the borrower and guides its borrowers who wish to lodge a complaint and also provide guidance on what to do in case the borrower is unhappy with the outcome.
- After examining the matter, the Company sends a response as soon as possible;
- The Company has designated an officer for the redressal of grievances of the borrower, in connection with any matter pertaining to business practices, lending decisions, credit management and recovery and the same is indicated in the sanction letter. The Contact details of the Grievance Redressal Officers for receiving and resolving complaints from borrowers are provided below:
Mr. Ashok Kumar Mittal and Mr Mukesh Jain
Prest Loans (Lord Krishna Financial Services Ltd)
M 5 – M 6, Essel House,10 Asaf Ali Road, New Delhi – 110 002 (India)
Phone: +91 11 45241123
If the Borrower's complaint / dispute are not redressed by the Grievance Redressal Officer within a period of one month, the borrower may appeal to the Officer-in-Charge of the Regional Office of the Department of Non-Banking Supervision (DNBS) of the RBI, New Delhi under whose jurisdiction the registered office of the Company falls. The displayed on the website) are provided hereunder:
Department of Non-Banking Supervision
New Delhi, Regional Office
Reserve Bank of India,
6, Sansad Marg, New Delhi, Delhi 110001
- The Board of Director of the Company shall periodically review the compliance with the Fair Practice Code and the functioning of the Grievance Redressal Mechanism and a consolidated report of such reviews is submitted to the Board [half yearly] for information/further directions ,if any.