FAIR PRACTICE CODE
The Fair Practices Code ("FPC") has been devised by Krishna Securities Limited ("CREDSET" or"Company") in accordance with guidelines issued by The Reserve Bank vide its circular dated September 28, 2006 and subsequent amendments, on Fair Practices Code (FPC) for all NBFCs to be adopted by them while doing lending business. The guidelines inter alia, covered general principles on adequate disclosures on the terms and conditions of a loan and adopting a non-coercive recovery method.
"CREDSET" has put in place the FPC with an endeavor to achieve synchronization of best practices when the Company is dealing with its stakeholders such as customers, employees, vendors, etc. The Company's Fair lending practices shall apply across all aspects of its operations including marketing, loan origination, processing, and servicing and collection activities. CREDSET's commitment to the FPC would be demonstrated in terms of employee accountability, monitoring and auditing programs, training and technology.
The Company'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.
a. "Board" means Board of Directors of the Company.
b. "Company" means Krishna Securities Limited
c. "Directors" means individual Director or Directors on the Board of the Company.
d. "FPC" means Fair Practice Code
4. Key Commitment:
The essence of the FPC lies in the following aspects that CREDSET shall strive to follow in spirit and in letter:
a. To provide professional, efficient, courteous, diligent and speedy services.
b. Not to discriminate on the basis of religion, caste, sex, descent in any manner.
c. To be fair and honest in any advertisement and marketing of loan products.
d. To provide customers with accurate and timely disclosure of terms, costs, rights and liabilities as regards loan transactions.
e. If sought, to provide such assistance or advice to customers seeking loans.
g. To attempt in good faith to resolve any disputes or differences with customers by setting up complaint redressal system within the organization.
h. To comply with all the regulatory requirements in good faith.
i. Seek to use governance structures that provide appropriate levels of oversight in the areas of audit, risk management and potential conflicts of interest and to implement compensation and other policies that align the interests of owners and management.
j. Seek to confirm that the funds do not flow to companies that utilize child or forced labor or generally maintain discriminatory policies against religion or gender.
k. Ensure compliances relating to Indian regulations prescribed by the Reserve Bank of India (‘RBI').
l. Guidelines on Fair Practice Code For CREDSET
m. Applications for loans and their processing
- All loan products of the company shall be the same as mentioned in the Loan policy of the company.
All communications to the customer by CREDSET shall be in English as it is understood by all customers of CREDSET. It is not Practical to get all documents in English language to be translated in different language, however customers are welcome to contact our staff for any help in this regard
- As part of the loan process, to inter alia ensure utmost transparency, CREDSET provides all necessary information to the customer along with the term sheet/application/proposal as the case may be including but not restricted to fees/charges, if any, payable for processing, the non-refundable nature of fees including in the case of non-acceptance of loan proposal, pre-payment options, check list in respect of information/papers required for considering loan and any other matter which effects the interest of the customer so that a meaningful comparison with the terms and conditions offered by other Non-Banking Financial Companies (‘NBFCs') can be made and informed decision can be taken by the customer. .
- Time-period for disposal of application:
n. Category of Customer and Size of Limit
i. For all categories of customers and for any amount of Loans
Time norms for disposal after
Submission of all required papers /
Information sought by the CREDSET.
Time-period upto 60 days or such time as mutually agreed upon with customer.
- On exercise of choice, the customer would be given the relevant information about the loan product of its choice.
- The customer would be explained the processes involved till sanction and disbursement of loan and would be notified of timeframe within which all the processes will be completed ordinarily.
ii. Loan appraisal terms and conditions
- CREDSET shall scrutinize the information submitted by the customer and additional data, if any, required should be called promptly to facilitate expeditious disposal of the loan.
- CREDSET shall convey in writing in English as it is understood by all customers of CREDSET by means of Sanction letter or Term sheet or any other form of written communication key terms and conditions of the proposed exposure including:
- The amount of loan sanctioned along with the terms and conditions including annualized rate of interest;
- Details of the default interest / penal interest rates (expressed in percentage per month / annum as the case may be) and the charges payable by the customers in relation to their loan account and method of application thereof (penal interest charged for late repayment of loan would be mentioned in bold in the loan agreement);
- Acceptance of terms and conditions and other caveats governing the credit given by CREDSET arrived at after negotiation;
- Terms of enforcement of security;
- All other information which is relevant from the point of view of the loan to be provided and all the parties involved;
- Wherever possible, reasons for rejection of loan would be conveyed to the customers.
- CREDSET shall furnish a copy of the loan agreement in English as understood by the borrower along with copy of all relevant enclosures quoted in the loan agreement to all the borrowers at the time of sanction/disbursement of the loan and shall be duly approved by the customer and countersigned by the authorized officials of CREDSET.
iii. Disbursement of loans including changes in terms and conditions
- CREDSET shall give notice in English as understood by the customer regarding any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges etc.
- Changes in the interest rates and charges shall be effected prospectively.
- A suitable condition in this regard shall be incorporated in the loan agreement, as applicable.
- Decision to recall / accelerate payment or performance under the agreement should be in consonance with the loan agreement. Before taking a decision to recall / accelerate payment or performance under the agreement or seeking additional securities, CREDSET shall give notice to customers in consonance with the loan agreement in English as may be understood by the customer.
- All communication like acceptances (including for amendments or addendum) with the Customer in relation to the sanction / facilities / loan / mandate / proposals shall be in writing and preserved for a minimum period of ten years.
- CREDSET will not interfere 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).
- In case of receipt of request from the borrower for transfer of loan account, the consent or otherwise i.e. objection from CREDSET, if any, should 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.
- If the customer does not adhere to repayment schedule, a defined process in accordance with the laws of the land will be followed for recovery of dues. The process will involve reminding the customer by sending the notice or by making personal visits and/ or repossession of security, if any. In case of default, CREDSET may refer the case to the recovery agent and will inform the customer of the recovery proceedings being initiated. CREDSET shall ensure that its process of recoveries will not involve harassment to the Customer. Appropriate instructions will be provided by CREDSET to its staff for handling customer queries and grievances cordially.
- In accordance with circular no. DNBS(PD). CC. No. 399/03.10.42 /2014-15 dated July 14, 2014 issued by RBI to ensure customer protection and to bring in uniformity about prepayment of various loans by borrowers of banks and NBFCs, CREDSET shall not charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.
- All the fees / charges / interest would be payable as per interest rate policy or as per mutually agreed terms.
- Post disbursement supervision is constructive and the genuine difficulties which the customer may face are given consideration.
- CREDSET will consider cases of financial difficulty appropriately. The customer should identify problems and immediately should let CREDSET know as soon as possible.
- All personal information of the customer would be confidential and would not be disclosed to any third party unless agreed to by the customer in writing. The term ‘Third party' excludes all Law enforcement agencies, Credit Information Bureau, RBI, other banks and financial institutions and any other state, central or other regulatory body.
- Customer information would be revealed only under the following circumstances, namely;
If CREDSET is compelled by law
If it is in the Public Interest to reveal the information
If the interest of CREDSET is to require disclosure.
v. Responsibility of Board of Directors
- The Board of Directors of CREDSET has laid down grievance redressal mechanism within the organization as per details mentioned in the next paragraph. Such a mechanism ensures that all disputes arising out of the decisions of CREDSET's functionaries are heard and disposed of at least at the next higher level.
The Board of Directors of CREDSET shall annually review the compliance of the FPC and the functioning of the GRM. A consolidated report of compliance shall be submitted to the Board every year.
vi. Grievance Redressal Mechanism (GRM)
- The Board of Directors of CREDSET has laid down the appropriate grievance redressal mechanism within the organization to resolve disputes arising in this regard. Such a mechanism ensures that all disputes arising out of the decisions of the company are heard and disposed off at least at the next higher level. The customer shall be informed of the customer complaint process / GRM followed by CREDSET. The customer shall be entitled to approach the Principal Officer, who shall ensure to take up the grievance promptly and try to resolve the matter expeditiously. If the matter is not resolved within a period of 7 working days or is not capable of being resolved then the customer shall be informed appropriately at the earliest opportunity. All communication in relation to the GRM shall be in writing.
- In this regard, CREDSET has also set up a dedicated e-mail address firstname.lastname@example.org where customers and other stakeholders including vendors can submit their grievances, complaints and suggestions. All complaints received by CREDSET shall be tabled at the meeting of the Board of Directors every quarter.
(i) CREDSET shall display the following information prominently, for the benefit of their customers at their corporate office:
- The name and contact details (telephone and email address) of the Grievance Redressal Officer who can be approached by the public for resolution of complaints against the Company. The company has appointed the following officials as Grievance Redressal Officer:
Name of Grievance Redressal
Mr. Gaurav Biharilal Khadaria/
Officer of the company
Mr. Aman Kedia
- The name and contact details as mentioned below of Officer-in-Charge of the Regional Office of DNBS of RBI, under whose jurisdiction the registered office of the DMI falls, if the complaint is not resolved within 1 month.
Name of Grievance Redressal Officer
Reserve Bank of India
Department of Non-Banking Supervision
6, Parliament Street
vii. Language and mode of communicating FPC
- FPC as established by CREDSET has been established in English language and is based on the guidelines as outlined by the RBI.
- CREDSET shall also have its FPC in regional/vernacular languages for customers who are unable to read the same in English.
viii. Regulation of excessive interest rates charged
- CREDSET will disclose to the borrower the risk and rationale for charging different rate of interest to different categories of borrowers in the application form and explicitly communicated in the sanction letter.
- The rates of interest and approach for gradation of risk shall also be made available on the website of CREDSET.
- The rate of interest being charged by CREDSET shall be annualized rate to make the customer aware of the exact rates that would be charged to the account.
ix. Complaints about excessive interest rates charged
- Board of CREDSET shall lay out an interest rate policy mentioning internal principles and procedures in determining interest rates, processing charges and other charges.
CREDSET does not envisage carrying out NBFC-MFI activities therefore such guidelines are not applicable on the company.