This Fair Practices Code has been prepared in compliance with the Guidelines on Fair Practices Code for LSPs” 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 borrowers to take informed decisions in respect of the financial facilities and services offered by the Company. The Code covers the general principles on adequate disclosures on the terms and conditions of the loan and the procedures to be followed when dealing with the borrowers.
Objectives of the Code
The following are the primary objectives of this Code:
- Promote fair and transparent practices by setting standards in dealings with borrowers;
- Foster fair and cordial relationship between the borrowers and the Company;
- To ensure compliance with regulatory requirements with regard to customer interface;
- To strengthen mechanisms for redressal of customer grievances.
Credigo Digital Private Limited (referred to as the “Company”) and all its officers shall be guided by the following procedures/ practices in dealing with its borrowers.
(i) 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) Loan Application Forms shall include necessary information to enable the borrower to make a meaningful comparison with the terms and conditions offered by other NBFCs and take an informed decision.
(c) Loan Application Forms will indicate the documents required to be submitted with the Application Form.
(d) The Company would give acknowledgement for receipt of all loan applications. The time frame within which applications shall be disposed of will be indicated in the acknowledgement.
(ii) Loan appraisal and terms/conditions
(a) In accordance with the Company’s policy, each application will be processed and appraised.
(b) 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 annualised rate of interest and method of application thereof and keep the acceptance of these terms and conditions by the borrower on its record.
(c) The Company shall furnish a copy of the loan agreement preferably in the vernacular language as understood by the borrower along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction / disbursement of loans.
(d) The Company shall also communicate to the borrower if the loan is rejected.
(e) Penal charges / Default charges/ Additional Finance Charges
- Penalty if charged for noncompliance of material terms and conditions of loan contract by the borrower shall be treated as penal charges and shall not be in the form of penal interest on the advances. There shall be no capitalization of penal charges i.e. no further interest shall be computed on such charges.
- This will not affect the normal procedures for compounding of interest in the loan account.
- The company shall impose reasonable penal charges for non compliance of material terms and conditions of the loan contract and shall disclose the quantum and reason in the loan agreement/ Key Fact statement.
- The penal charges in case of loans sanctioned to individual borrowers for purpose other than business shall not be higher than the penal charges applicable to Non individual borrowers for similar non compliance of material terms and conditions.
(f)The Company shall keep the acceptance of these terms and conditions by the borrower on its record.
(g) The Company will furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of disbursement of loans.
(iii) Disbursement of loans including changes in terms and conditions
The Company would ensure timely disbursement of loans sanctioned in conformity with the terms and conditions governing such sanction.
(a) The Company shall give 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, prepayment charges etc.
(b) 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.
(c) Any decision to recall / accelerate payment or performance under the agreement shall be in consonance with the loan agreement.
(d) The Company shall release all securities on realisation of all dues or on realisation of the outstanding amount of loan, subject to anylegitimate 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.
(iv) General
(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 new information, not earlier disclosed by the borrower, has come to the notice of the Company)
(b) In case of receipt of request from the borrower for transfer of account, the consent / 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 dues, the Company shall resort to practice which is permissible under the law and shall not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc. The Company shall ensure that the staff are adequately trained to deal with the customers in an appropriate manner.
(d) The company shall put up the Fair Practice Code on its website in vernacular language, for the information of various stakeholders.
(e)The Company shall charge interest from the date of actual disbursement of the funds to the borrower and not from the date of sanction of loan or date of execution of loan agreement, if they are predated to the disbursement date.
(f) In the case of disbursal or repayment of loans during the course of the month, the Company shall charge interest only for the period for which the loan was outstanding during the month and not for the entire month.
(g) The Company shall not collect advance installments from the borrower but reckon the full loan amount for charging interest.
(v) Grievances redressal mechanism
(a) Any grievances/ disputes arising in this regard shall be addressed to and resolved by the dealing official of the Company at the Company’s office situated at M 118, Connaught Circus, New Delhi 110001.
All disputes arising out of the decisions of the dealing official shall be heard and disposed of by Mr. B. M. Wadhwa, Manager, or in his absence by Mr. Sudhir Maheshwari, Director.
(b) In case complaint / dispute is not addressed within the period of one month of it being addressed to the Grievance Redressal Officer (GRO) of the company the customer may appeal to the Officer in Charge, Department of Non-Banking Supervision, Reserve Bank of India, Parliament Street, New Delhi 110001
(c) The Board of Directors shall review the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at least once every year.
(vi) Interest Rates
(a) The interest rate to be charged for loans and advances shall be based on relevant factors such as, cost of funds, margin and risk premium, etc. The annualised 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.
(vii) Repossession
The Company shall have a legally enforceable re-possession clause in the loan agreement with the borrower. The terms and conditions of the loan agreement shall also contain provisions regarding:
(a) notice period before taking possession
(b) circumstances under which the notice period can be waived
(c) the procedure for taking possession of the security
(d) a provision regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the security
(e) the procedure for giving repossession to the borrower and
(f) the procedure for sale / auction of the security.
(viii) Digital Lending
Whenever the Company resorts to lending through its own digital lending platform or through an external lending platform, the Company shall adhere to the Fair Practices Code guidelines.
(ix) Confidentiality
Unless authorized by the customer, the Company will treat all personal information as private and confidential.
Unless authorized by the customer, we will not reveal transaction details to any other entity other than in the following exceptional cases:
(a) If we have to provide the information by statutory or regulatory laws
(b) If there is a duty to the public to reveal this information
(c) If our interest requires us to provide this information (e.g., fraud prevention) to Banks / Financial Institutions.
(d) We will not use this reason for giving information about customers to anyone else for marketing purposes.
