FAIR PRACTICES CODE

INTRODUCTION

The Fair Practices Code aims to provide the borrowers with an effective overview of practices, which will be followed by the company with respect to the financial facilities and services offered by the company to its borrowers. This Fair Practices Code has been prepared in compliance with the Guidelines on Fair Practices Code for NBFCs issued by the Reserve Bank of India and aims to provide its borrowers an effective overview of the practices followed by the company and to enable them to take informed decisions in respect of the financial facilities and services offered by the company. The code will facilitate the borrowers taking informed decisions in respect of the financial facilities and services to be availed by them and will apply to any loan that the company may sanction and disburse.

Objectives of the Code

This code has been developed to
- Promote good, fair, transparent and trustworthy practices by setting minimum standards in dealings with the borrowers
- Increase transparency to enable the borrowers to have a better understanding of what they can reasonably expect of the services
- To ensure compliance with regulatory requirements with regards to financial facilities and services to borrowers
- Promote fair and cordial relationships between the borrowers and the company
- To strengthen mechanisms for redressal of borrowers customers grievances

Our Key Commitments and Declarations

We shall act efficiently, fairly and diligently in our dealings with all our borrowers by meeting the commitments and standards in this Fair Practices Code for the financial products and services, we offer, and the procedures and practices our staff follow.
- Ensuring that all the financial services meet relevant laws and regulations
- Providing professional, courteous and speedy services
- Providing accurate and timely disclosure of terms and conditions, costs, rights and liabilities as regards financial transactions

We shall help the borrowers understand how our financial products and services work by Giving verbal information about the financial schemes in Hindi and/or English and/or local vernacular language as understood by the borrower. Ensuring that our advertising promotional literature is clear and is not misleading. Explaining financial implications of the transactions. Helping the borrowers to choose the financial scheme.

We shall deal quickly and proactively with things that go wrong by Correcting mistakes quickly. Attending borrowers complaints quickly. Telling our borrowers how to take their complaint forward if the borrowers are still not satisfied with our assistance. Reversing any charges that we apply due to our mistake.

Non-Discrimination Policy

We will not discriminate between our borrowers on the basis of gender, race or religion.

Applications for Loans and Their Processing

All communications to the borrowers shall be made in vernacular language or a language as understood by the borrower.
Loan application forms issued by the Company shall 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 an informed decision can be taken by the borrower.
A list of documents required to be submitted along with the application form shall be mentioned in the loan application form.
The Company shall issue an acknowledgement receipt for all loan applications. Subject to receipt of all the requisite documentation and information, loan applications shall be disposed of within 90 days, from the date of receipt of the application form complete in all respects.
In any case the Customer will be kept informed by the customer service team with regards to the status of his application from time-to-time.

If any additional details/documents are required, the same shall be intimated to the borrowers immediately.

Loan Appraisal and Terms/Conditions

The Company shall conduct a due diligence on the credit worthiness of the borrower, which will be an important parameter for taking decision on the application. The assessment would be in line with the Company’s credit policies, norms and procedures in respect thereof.
The borrower would be informed by means of a written sanction letter in vernacular language as understood by the borrower, of the amount of loan sanctioned or otherwise. The said letter shall contain the terms and conditions including the annualized rate of interest and the method of application thereof.
The Company shall obtain an acceptance from the borrower on the said sanction letter with the borrower’s signature under the caption “I/WE ACCEPT ALL THE TERMS AND CONDITIONS WHICH HAVE BEEN READ AND UNDERSTOOD BY ME/US”. The Company shall maintain a record of such acceptance.
The Company shall invariably be bound to furnish a copy of the loan agreement, preferably in the vernacular language as understood by the borrower, along with a copy of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction/disbursement of loans.
The Company shall ensure that the loan agreement and all enclosures furnished to all borrowers contains the terms and conditions and the rate of interest in the form of a Term Sheet, which shall be annexed to the Loan Agreement. Further, the Company shall mention the penal interest charged for late payment in bold in the loan agreement.

Disbursement of Loans Including Changes in Terms and Conditions

The Company shall frame appropriate internal principles and procedures for determining and ensuring that the interest rates and processing and other charges are not excessive.
The disbursement will be done immediately upon compliance of all the terms and conditions of the sanction by the borrower.
The Company shall give a notice to the borrower in the vernacular language as understood by the borrower, of any change in the terms and conditions including disbursement schedule, interest rates, service charges, pre-payment charges etc.
The Company shall also ensure that changes in interest rates and charges are effected only prospectively. A condition to this effect shall be incorporated in the loan agreement.

Post Disbursal Supervision

Any decision to recall/accelerate payment or performance under the loan agreement shall be in consonance with the Loan Agreement. All securities offered by the borrower shall be released 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 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.

General

The Company shall not interfere in the affairs of the borrower except for the purposes provided in the Loan Agreement, unless new information not earlier disclosed by the borrower has come to the notice of the Company. In the matter of recovery of loans, the Company shall not resort to undue harassment and its agents shall not resort to intimidation or undue harassment of any kind either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the debtors family, members, referees and friends, sending inappropriate messages either on mobile or through social media, making threatening and or anonymous calls, for recovery of overdue loans, making false and misleading representations. The Company shall ensure that its staff is adequately trained to deal with the customers in an appropriate manner.

Complaint Redressal Mechanism

It is our constant endeavour to put customers interest first and to provide with financial solutions that are right for the customers. The grievances of the customers will be redressed in the following manner: The customer can register grievances through email id and telephone number provided at our Head Office/website. After examining the matter, the Company will endeavour to send the customer its response expeditiously and intimate the customer how to escalate the complaint to higher level, if he is not satisfied with the response.
The Company has set up product wise turn around time (TAT) for resolution of customer grievances and shall ensure to resolve the grievances within such defined TATs. The customer has to confirm whether the grievance has been resolved to his/her satisfaction or not. The grievance will be deemed to be closed, if the customer does not respond via telephone number or email.

Policy for Determining Interest Rates, Processing and Other Charges

As required under in clauses of para 6 Disbursement of loans including changes above and to ensure that there the Customers are not charged excessive interest rate and charges on loans and advances by the Company, the Board of the Company has adopted a Policy for Determining Interest Rates, Processing and Other Charges (Interest Rate Policy) and the same has been put up on the Company’s website soundfinance.org. Company also undertakes periodical review of the Interest Rate Policy.

Compliance

The Company shall abide by this Fair Practices Code following the spirit of the Code and in the manner it may be applicable to its business.