With a view to regulating the credit system and making practices followed by Non Banking Finance Companies transparent and customer-friendly, Reserve Bank of India, in exercise of the powers conferred under Section 45L of the RBI Act, 1934 (Act 2 of 1934), have prescribed broad guidelines on fair practices that are to be framed by the NBFCs with the approval of the Board of Directors and implemented across the network.
In accordance with the directives of Reserve Bank of India, the Company has, with the approval of its Board, framed the following fair practices code.
In pursuance to the Notification issued by the Reserve Bank of India vide Circular No. RBI/2006-07/138 DNBS (PD) CC No. 80/ 03.10.042/ 2005-06 dated the 28th September 2006 and RBI/2011-12/470 DNBS.CC.PD.No.266 /03.10.01/2011-12 March 26, 2012 DHARMAPRIYA FINANCING COMPANY PRIVATE LIMITED (referred to as the “Company”) has formulated this Fair Practices Code to lay down the following procedures and practices in dealing with the business transactions.
(I) Applications for loans and their processing
a) With a view to enabling the customers to take informed decisions, the application form for loan would contain all the required information for meaningful comparison of the terms and conditions offered by other NBFCs, which may affect his/her interests. The list of documents to be submitted with the application form would be specified and the applications submitted along with the prescribed documents would be duly processed.
b) We have implemented adequate steps to ensure KYC guidelines as per RBI and our Gold loans are granted by following policies
- Proper assaying procedures for all jewellery
- Adequate system to satisfy ownership of the jewellery
- Jewellery is properly insured and kept under safe custody.
- The auction procedures are disclosed in the loan agreement and highly transparent with adequate prior notice to the borrower with date of the auction, finally, the same shall be announced to the public by issue of advertisements in two news papers.
- Gold pledged will be auctioned only through auctioneers approved by the Board of Directors.
- Systems and procedures will be put in place dealing with fraud including separation of duties of mobilization, execution and approval.
c) All the applications for loans received by the Company would be acknowledged by means of a receipt, which will invariably carry the time frame within which the loan application would be disposed of.
d) All communications to the borrower shall be either in the vernacular language or in a language as understood by the borrower.
(II) Loan appraisal and terms and conditions
The Company shall convey in writing to the borrowers by means of sanction letter or otherwise the amount of loan sanctioned along with the terms and conditions including annualized rate of interest and the method of application thereof. The Company shall keep the acceptance of these terms and conditions by the borrowers on its record. Cases of rejection would also be notified to the prospective borrower (s) promptly.
(III) Disbursement of loans including changes in terms and conditions
a) The Company shall give notice to 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 clause to this effect shall be incorporated in the loan agreements.
b) Decision to recall and/or accelerate payment or performance under the agreement shall be in consonance with the loan agreement.
c) The Company shall release all securities on repayment of 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 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) Internal principles governing the interest rates on gold loans
The interest charges to be levied on loans will be governed by following internal principles.
| 1 | The company lends varying amounts per gram of the gold (LTV) depending upon the market value and the purity of the gold. As per the risk assessment of the company a higher LTV is a riskier than a lower LTV. Accordingly, lower LTV attracts lower rate of interest and higher LTV attracts higher interest rate. Further, remittance of interest per month is optional for the customers. |
| 2 | Cost of funds: Interest on loans will be levied as a mark up on the current cost of funds. The current cost of funds for this purpose means the incremental cost of borrowing of the relevant month including the processing fee and intermediation fee and all incidental expenses. |
| 3 | The interest rates charged by the Company shall always be expressed in simple rates and it shall be properly communicated to all the customers and the same shall be printed on all loan document. |
| 4 | The administrative charges to be levied shall form part of loan documents with the due acknowledgement of customer by countersigning the same. The Company may levy interest on the basis of 360 days in a year because on an average 80% of the customers prematurely settle their loan before one year which is the maximum period of loan extended by the Company. Any other charges and levies may be done by informing the customer with his due acknowledgement. |
(V) 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 borrowal account, the consent or otherwise i.e. the Company’s objection, if any, shall be conveyed within 21 days from the date of receipt of the request. Such transfer shall be as per transparent contractual terms in consonance with law.
c) In the matter of recovery of loans, consistent with its policy over the years, the company 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 will maintain appropriate Grievances redressal mechanism in the organization to resolve any dispute arising out of loans and advances. This mechanism would ensure that disputes arising out of the decisions of the sanctioning authorities are heard and disposed of at the next higher level. The Board of Directors of the Company would conduct periodic review of the compliance of the Fair Practices Code and the functioning of the Grievances Redressal Mechanism. A consolidated report of such reviews would be submitted to the Board at quarterly intervals.
(e) The company has taken approval of the Board of Directors for appointment of Grievance Redressal Officer and for amending Fair Practice Code of the Company.
(f) The Company has appointed Mr.M.K.Viswambharan (Managing Director), Mukkulam House, Madathikkara Lane, Irinjalakuda.P.O., Pin-680121 as Grievance Redressal Officer.
(g) The Company shall display a notice board in HO and all of its branches as given below.
DHARMAPRIYA FINANCING COMPANY PRIVATE LIMITED
REGISTERED OFFICE-KIZHAKKEPEEDIKA COMPLEX
TANA-SOUTH, KODUNGALLUR ROAD
IRINJALAKUDA-680121
GREIVANCE REDRESSAL OFFICER
Mr. M.K.VISWAMBHARAN (Managing Director)
Mukkulam House, Madathikkara Lane
P.O.Irinjalakuda-680121Mukkulam House, Madathikkara Lane
Mob NO : 9447215661
LAND NO : 0480-2821812 (Office), 0480-2823189 (Resi)
E mail Id : dharmapriyafc@gmail.com
. If the complaint / dispute is not redressed within a period of one month, the customer may appeal to
The Chief General Manager,
Reserve Bank of India,
Dept. of Non-Banking Supervision,
Bakery Junction, PB No.6507,
Thriruvananthapuram-595033