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The Fair Practices
Code of the Company has been adopted by the Board of Directors of the
company in their meeting held on October 31, 2006 in terms of the RBI
Circular no. RBI / 2006-07 /138 DNBS (PD) CC No. 80 / 03.10.042 / 2005-06
dated September 28, 2006.
(i) Applications for loans and their processing
(a) Loan application forms would include necessary information which affects
the interest of the borrower, so that a meaningful comparison with the
terms and conditions offered by other Company can be made and informed
decision can be taken by the borrower. The loan application form may indicate
the documents required to be submitted with the application form.
(b) The Company
shall after due verification of the documents, give acknowledgement for
receipt of all loan applications. Preferably, the time frame within which
loan applications will be disposed of would also be indicated in the acknowledgement.
(ii) Loan
appraisal and terms/conditions
The Company would convey in writing to the borrower by means of sanction
letter or otherwise, the amount of loan sanctioned along with the terms
and conditions including annualised rate of interest and method of application
thereof and keep the acceptance of these terms and conditions by the borrower
on its record.
(iii) Disbursement
of loans including changes in terms and conditions
(a) The Company would give notice to the borrower of any change in the
terms and conditions including disbursement schedule, interest rates,
service charges, prepayment charges etc. Company would also ensure that
changes in interest rates and charges are effected only prospectively.
A suitable condition in this regard would be incorporated in the loan
agreement.
(b) Decision
to recall / accelerate payment or performance under the agreement would
be in consonance with the loan agreement.
(c) Company
would release all securities on repayment of all dues or on realisation
of the outstanding amount of loan subject to any legitimate right or lien
for any other claim 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 Company are entitled to retain the securities till the relevant
claim is settled/paid.
(iv) General
(a) Company would 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 lender).
(b) In case
of receipt of request from the borrower for transfer of borrowal account,
the consent or otherwise i.e. objection of the Company, if any, would
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 would not resort to
undue harassment viz. persistently bothering the borrowers at odd hours,
use of muscle power for recovery of loans, etc.
(v) The Board of Directors of Company would also lay down the appropriate
grievance redressal mechanism within the organization to resolve disputes
arising in this regard. Such a mechanism would 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 would 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 may be submitted to the Board at regular intervals, as may be
prescribed by it.
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