Fair Practices Code
PREAMBLE
The Reserve Bank of India (“RBI”) has issued guidelines on Fair Practices Code for Non-Banking Financial Companies (NBFC) vide RBI circular No. DNBR (PD) CC No. 054/03.10.119/2015-16 dated July 01, 2015 and RBI/2019-20/258 DOS (NBFC) (PD) CC. No. 112/03.10.001/2019-20 dated June 24, 2020 thereby setting standards for fair business and corporate practices while dealing with their customers. Based on these circulars and other applicable guidelines of the RBI, Ganesh Ganga Investment Private Limited ("GGIPL") has adopted the following Fair Practices Code as duly approved by its Board of Directors.
The Fair Practices Code (“FPC”) applies to all products and services offered by GGIPL and outlines fair business practices across all aspects of its operations i.e. origination, processing, servicing and collection activities. The commitment to the FPC shall be demonstrated in terms of employee accountability, training, counseling, monitoring, technology, audit and internal controls. GGIPL’s Board of Directors and the management are responsible for establishing practices designed to ensure that its operations reflect a strong commitment to fair lending and that all employees are aware of that commitment. The Board shall also review the Fair Practices Code and compliance to it from time to time and make suitable changes as needed.
GUIDELINES
1. Application for Loans and its Processing
a. All communication with the borrower will be in vernacular language or a language which is understood by the borrower.
b. Loan Application forms would be provided to the borrowers and shall contain the necessary information which affects the interest of the borrower, so that a meaningful comparison with the terms and conditions offered by other lenders can be made and an informed decision can be made by the borrower.
c. The Loan Application form shall specify the documents required to be submitted by the borrower along with the application form.
d. The company shall provide an acknowledgement for receipt of loan application to the borrower.
e. The duly completed loan applications received shall be disposed of within 30 days after the loan application form is complete and all requisite documents have been submitted by the borrower and found to be acceptable by the company.
2. Loan Appraisal and Terms and Conditions
a. The company shall 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. If the company cannot provide the loan to the borrower, it shall communicate the reason for rejection thereof to the borrower.
b. The company shall ask the borrower to provide acknowledgement of the terms and conditions governing the loan as a token of their acceptance and shall keep a record of the same.
c. The company shall mention the penal interest charged for late repayment in bold in the loan agreement.
d. The company shall furnish a copy of the loan agreement 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.
3. Disbursement of Loans and Change 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 of the loan including disbursement schedule, interest rates, service charges, prepayment charges etc.
b. The company shall ensure that changes in interest rates and charges are affected only prospectively. A suitable condition in this regard shall be incorporated in the loan agreement.
c. Any decision to recall/ accelerate payment or performance under the loan agreement shall be in consonance with the loan agreement.
d. 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 they 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.
4. Other Guidelines
a. 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 information, not earlier disclosed by the borrower, has been noticed).
b. In case of receipt of request from the borrower for transfer of loan 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.
c. In the matter of recovery of loans, the company shall not resort to undue harassment viz., persistently bothering the borrowers at odd hours, use muscle power for recovery of loans etc.
d. The company shall ensure that the staff are adequately trained to deal with the customers in an appropriate manner.
e. As a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loans by borrowers of banks and NBFCs, the company shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned for purposes other than business to individual borrowers, with or without co-obligant(s).
f. 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 annualized rate of interest to be charged for loans and advances.
g. The rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers shall be disclosed to the borrower or customer in the application form and communicated explicitly in the sanction letter.
5. Repossession of vehicles financed by the company
a. The company has not been in the business of vehicle asset finance since its incorporation. Thus, the lending against assets (vehicles) guidelines are not applicable to the company.
6. Lending against collateral of Gold jewellery
a. The company has not been in the business of lending against the collateral of gold jewellery since its inception. Thus, the relevant guidelines are not applicable to the company.
INTEREST RATE POLICY
RBI has issued guidelines for regulation of excessive interest rates charged by NBFCs vide its Circular no. DNBS (PD) CC No. 95/03.05.002/2006-07 dated May 24, 2007 and further vide Circular no. DNBS (PD) C.C. No. 133/03.10.001/2008-09 dated January 2, 2009. In order to ensure its standards of transparency in respect of terms and conditions of loans, the company has therefore, adopted appropriate internal principles and procedures in determining interest rates and processing and other charges as follows:
1. The interest charged to borrowers on their loans shall be based on the following factors:
a. Structure of the loan including terms of payment of principal and interest
b. Term of the loan
c. Cost of funds to the company
d. Credit risk based on underwriting of the loan proposal and credit ratings
e. Other factors like profile, reputation, relationship term of the customer
2. The interest rate for the same product and term may not be standardized and may vary from customer to customer based on the above factors.
3. The annualized rate of interest shall be intimated to the borrower at the time of sanction/ disbursal of loan.
4. The penal interest and late payment charges, if any may vary from customer to customer and shall be intimated to the borrower at the time of sanction/ disbursal and shall be as per the loan agreement.
5. All processing and other charges may vary from customer to customer and shall be intimated to the borrower at the time of sanction/ disbursal of loan and shall be as per the loan agreement.
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:
1. If the Company is required to provide the information to any statutory or regulatory body or bodies or otherwise required under any law;
2. If arising out of a duty towards the public to reveal the information;
3. 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 name & address) to anyone else for marketing purposes;
4. If the borrower has authorized the Company to provide such information to its group/ associate/ entities or companies or any such person/ entity as specifically agreed upon;
5. If we are asked to give a reference about a borrower, we shall obtain his/ her written permission before giving it;
6. 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;
7. 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
In order to provide clients formal and informal channels for feedback and suggestions and to consistently assess the impact of our services, the company has laid down the appropriate grievance redressal mechanism to resolve all disputes arising out of our business activities. The Grievance Redressal Mechanism adopted and approved by the Board of Directors is available here.