Customer Service Policy

1. Introduction

Avanti Microfinance Private Limited (hereinafter referred to as ‘the Company’) has framed the Customer Service Policy (hereafter referred to as “Customer Service Policy” or “the Policy”) in accordance with the regulatory requirements specified by the Reserve Bank of India (RBI).

2. Objectives of the Policy

 The objective of the Customer Service Policy is to ensure all customers are treated fairly and without bias; issues raised by customers are attended and dealt with utmost care and resolved within a reasonable time; customers are made aware of their rights and alternative remedies if they are not satisfied with the response or resolution to their complaint.

3.     Categories of Customer’s Communications

• Query - General inquiries, primarily relating to loans, interest rates, repayment terms, eligibility norms, categories of loans, eligibility criteria, terms of financing / refinancing etc.
• Request – Requests for obtaining any valid services including financing or refinancing support by the customers
• Grievance – A communication by prospective / existing customers that expresses dissatisfaction because of lack of action, inadequate quality of
• Complaint – Related to staff misbehavior, cheating / fraud, false commitments, mis- conduct with the
• Suggestion / Feedback – suggestions / feedback with respect to its operations, policies or practices.

4.     Mechanism for complaints

 Customer can lodge his / her grievance through any of the following channels:

• Complaint in Person: A customer can lodge a complaint in person during working hours at any of the branches with the designated
• Complaints through post / mail / email/box: Customers can also submit their grievances by post at the following address or through email at customerservice@avantifinance.in by giving full disclosures and details of the complainant and giving specific instances of the cause of complaint.

Addressed to: Head Operations, 3rd Floor Elphinstone Building, Veer Nariman Road,Horniman Circle, Fort, Mumbai 400001. Telephone - 022 62352121

5.     Recording and tracking of Complaints

All the complaints received is recorded and tracked for end-to-end resolution in a spreadsheet format. Complaint MIS is published and shared to the management on quarterly basis for quality control.

6.     Resolution of Complaints

• Any complaint through e-mail / letters / person shall be acknowledged promptly after receipt, at the corporate office or Regional / Branch Offices as and when set
• The Complaints should be registered in the Customer Grievance Register (CGR) maintained electronically and / or physically, and shall include full details of the complainant (name, address and contact details), date of receipt, fact of the complaint, category of complaint
• The Grievance Redressal Officer (GRO) (or equivalent) will take steps to redress the grievances with care and diligence, normally within the period of 21 working days from the date of receipt of the
• If the complainant is not satisfied with the reply / action / resolution given by Grievance Redressal Officer (GRO) (or equivalent), he / she may directly approach the Chief Executive Officer (CEO), for further action on the
• Anonymous complaints will not be entertained

6.1     Recovery Process.

 The staff shall be trained in proper etiquette for recovery process as elaborated in the Fair Practice Code adopted by the company.

6.2     Internal Machineries to handle Customer complaints / grievances

1. Customer Service contact (CSC): The Customer Service contact (CSC) will be the first point of contact for the customers in most of the cases. CSC will be responsible to receive the complaint of customers by whatever means, i.e. in person, post, mail etc. If the complaints received by Nodal officers it will be forwarded to CSC with related documents / enclosures (if any) for early resolution on the next working day of receipt of the CSC will provide an acknowledgment for the complaint received from the customer within 5 working days of the receipt, and also make necessary entries in the Customer Grievance Register (CGR) which shall include but without limitation to, full details of the complainant (name, address, and contact details), date of receipt, fact of the complaint, category of complaint etc.
2. The Company will designate a GRO (or equivalent) at its corporate office. GRO (or equivalent)will have the responsibilities of ensuring early resolution of GRO will first examine the nature of the Complaint and initiate necessary action to address the complaint to the satisfaction of the complainant. He / She will also ensure to record the action initiated or taken in the CGR along with the status of the complaint- resolved / unresolved or escalated to next level, as the case may be.
3. GRO will circulate the monthly Action Taken Report on all the complaints received, within 7 working days of the next month to the Chief Grievance Redressal Officer (or equivalent) for information / guidance. (Not regulatory , but a good practice)

6.3     Time Frame 

1. The Complaints received will be analysed from all possible angles. All efforts will be made to resolve each complaint received generally within the stipulated time as per the following escalation matrix:

 

Within 10 working days	Customer Service contact (CSC) or Partner engagement manager (or equivalent)
Within 20 working days	Grievance Redressal Officer (GRO) or Head- Partnerships & Alliances (or equivalent)
Within 30 working days	Chief Grievance Redressal Officer or the Chief Executive Officer / Board of directors

 

1. There may be some complaints which require deeper analysis from all possible angles which may cause delayed resolution of the complaint. In such cases, the company will try to resolve the grievances at the earliest depending on the nature of the case. Such delay in addressing the complaint beyond the prescribed time limit shall be conveyed to the complainant along with reasons for the

  If the resolution of the complaint is delayed beyond 30 days of receipt, or the complainant is not satisfied with the reasons of delay conveyed to him / her, he / she may appeal to the Officer-in-Charge of the Regional Office of Department of Non-Banking Supervision (DNBS) of RBI, Mumbai within whose jurisdiction the registered office of the Company is situated and the following message shall be displayed at the branch and on the website of the Company: “If your complaint/dispute is not redressed within a period of 30 days, you may appeal to the officer-in-charge of the Regional Office of DNBS at RBI, at the following address: Officer-in-charge, Reserve Bank of India, Regional Office, DNBS, fourth floor, opp. Mumbai Central Station, Byculla, Mumbai – 400 008”

6.4     Reporting to Board of Directors

Summary of the customer grievance reports along with actions initiated would be reported to the Board at least once in a year. The report shall contain information like, the total no. of complaints received, disposed off and pending, with reasons thereof, which will be placed before the Board for information / guidance.

7.     Review and update

The Policy shall be reviewed as and when required or at least once in a year, to suit the needs of the Company with the approval of the board and to comply with revised guidelines issued by RBI from time to time and redress system mentioned herein shall be prominently displayed in all its offices and on its website Owner of document: Mr. Sunil Kumar Tadepalli, Authorised Official Last date of review: September 12, 2018

8.     Regulatory References

This policy is framed as per the following regulatory references and in accordance with leading industry practice:

• RBI circular on Master Direction - Non-Banking Financial Company –Non- Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016.

Avanti Microfinance Pvt. Ltd. Fair Practices Code

Introduction

This Fair Practices Code (this “Code”) is aimed to provide to the customers’ effective overview of practices, which will be followed by the Avanti Microfinance Private Limited (the “Company”) in respect of the financial facilities and services offered by the Company to its customers. The Code will facilitate the customers to take informed decisions in respect of the financial facilities and services to be availed by them and will apply to any loan that the Company may sanction and disburse. The Company commits itself to implementing and adopting these fair practices in all its activities and transactions while functioning as an NBFC-MFI. A. Fair Practices Code for all lending activities

1. Objective of the Code

This Code has been developed to:

• promote good, fair and trustworthy practices by setting minimum standards in dealing with the customers;
• increase transparency to enable the customers to have a better understanding of what they can reasonably expect of the services;
• encourage market forces, through competition, to achieve higher operating standards; and
• promote a fair and cordial relationship between the customers and the Company.

2. Our Key Commitments and Declarations

We shall act efficiently, fairly and diligently in our dealings with all our customers by:

• Meeting the commitments and standards in this Code for the financial products and services we offer, and the procedures and practices our staff follow;
• Ensuring that all the financial services meet relevant laws and regulations;
• Providing professional, courteous and speedy services; and
• Providing accurate and timely disclosure of terms and conditions, costs, rights and liabilities as regards financial transactions.

We shall help the customer understand how our financial products and services work by:

• Giving verbal information about the financial schemes in Hindi and / or English and / or local vernacular language as understood by the borrower;
• Ensuring that our advertising & promotional literature is clear and is not misleading;
• Explaining financial implications of the transactions;
• Helping the customer to choose the financial scheme.

We shall deal quickly and proactively with things that go wrong by:

• Correcting mistakes quickly;
• Attending customer complaints quickly;
• Telling our customers how to take their complaint forward if the customers are still not satisfied with our assistance; and
• Reversing any charges that we apply due to our mistake.

3. Non-Discrimination Policy

We will not discriminate between our customers on the basis of gender, race or religion.

4. Applications for loans and their processing

• All communications to the borrowers shall be made in vernacular language or a language as understood by the borrower.
• Loan application forms issued by the Company shall include necessary information which affects the interest of the borrower so that a meaningful comparison with the terms and conditions offered by other non-banking financial companies (“NBFCs”) can be made and an informed decision can be taken by the borrower. The loan application form shall indicate the documents required to be submitted along with the application form.
• The Company shall issue an acknowledgement receipt for all loan applications. Subject to receipt of all the requisite documentation and information, loan applications shall be disposed of within 30 days, from the date of receipt of the application form complete in all respects. The Company will endeavour to keep the customer / applicant informed with regard to the status of his application from time to time. The customer may also contact the Company’s customer service team at the prescribed toll-free number or email id to obtain an update on the status of application.
• If any additional details/ documents are required, the same shall be intimated to the borrowers immediately.

5. Loan appraisal and terms / conditions

• The Company shall conduct a due diligence on the credit worthiness of the borrower, which will be an important parameter for taking a decision on the application. The assessment would be in line with the Company’s credit policies, norms and procedures in respect thereof.
• The borrower would be informed by means of a written sanction letter in vernacular language as understood by the borrower, of the amount of loan sanctioned or otherwise. The said letter shall contain the terms and conditions including the annualized rate of interest and the method of application thereof.
• The Company shall obtain an acceptance from the borrower on the said sanction letter with the borrowers’ signature under the caption “I / WE ACCEPT ALL THE TERMS AND CONDITIONS WHICH HAVE BEEN READ AND UNDERSTOOD BY ME / US”. The

Company shall maintain a record of such acceptance.

• The Company shall endeavour to furnish a copy of the loan agreement, in the vernacular language as understood by the borrower. Further, the Company shall furnish a copy of the loan agreement, along with a copy of all enclosures quoted in the loan agreement, to all the borrowers at the time of sanction / disbursement of loans. The Company shall ensure that the loan agreement, with all enclosures, furnished to all borrowers contains the terms and conditions and the rate of interest in the form of a Term Sheet, which shall be annexed to the Loan Agreement. Further, the Company shall mention the penal interest charged for late payment in bold in the loan agreement.
• The Company shall, wherever applicable, have a built-in repossession clause in the contract / loan agreement so as to have legal enforceability.
• The terms and conditions of the loan agreement of the Company shall, wherever applicable, also contain the following provisions:
  • Notice period before taking possession;
  • Circumstances under which the notice period can be waived;
  • Procedure for taking possession of the security;
  • Provision regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the property;
  • Procedure for giving repossession to the borrower; and (vi) Procedure for sale / auction of the property.

6. Disbursement of loans including changes in terms and conditions

• The Company shall frame appropriate internal principles and procedures for determining and ensuring that the interest rates and processing and other charges are not excessive. The Company shall, at the time of disbursal, ensure that the interest rate and processing and other charges on loan and advances are in strict adherence to above referred internal principles and procedures.
• The disbursement will be done immediately upon compliance of all the terms and conditions of the sanction by the borrower.
• The Company shall give a notice to the borrower in the vernacular language or a language as understood by the borrower, of any change in the terms and conditions including disbursement schedule, interest rates, service charges, pre-payment charges etc. The Company shall also ensure that changes in interest rates and charges are effected only prospectively. A suitable condition to this effect shall be incorporated in the loan agreement.

7. Post Disbursal Supervision

• Any decision to recall / accelerate payment or performance under the loan agreement shall be in consonance with the loan agreement.
• The Company shall release all securities offered by the borrower 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 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.

8.  General

• The Company shall 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 come to the notice of the Company.
• In the matter of recovery of loans, the Company shall not resort to undue harassment like bothering the borrowers at odd hours, use of muscle power for recovery of loans etc. The Company shall ensure that its staff is adequately trained to deal with the customers in an appropriate manner. The Company shall ensure that its staff are adequately trained so as not to behave rudely with customers.
• The Company will call delinquent customers between 0700 hours to 2100 hours unless special circumstances of the borrower’s business require to call them otherwise outside the hours mentioned.
• The Company may arrange for enforcing security charged to it of the delinquent borrower, if required, with an aim only to recover dues and will not be aimed at whimsical deprivation of the property.
• The Company shall ensure that the entire process of enforcing its security, valuation and realisation thereof be fair and transparent.
• In case of receipt of a request from the borrower for transfer of the borrowal 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 such request. Such transfer shall be as per transparent contractual terms in consonance with law.
• The Company shall not charge foreclosure charges / pre-payment penalties on all floating rate term loans sanctioned to individual borrowers.

9. Complaint Redressal Mechanism

It is the Company’s constant endeavour to put customers interest first and to provide with financial solutions that are right for the customers. In keeping with its promise, the Company looks forward to receiving both positive and negative feedback from the customers on its products and services. The grievances of the customers will be redressed in the following manner:

• The customer can register grievances through email id and toll free number provided at the Company’s branches / Head Office / website and at any other place where the business of the Company is transacted.
• After examining the matter, the Company will endeavour to send the customer its response expeditiously and intimate the customer how to escalate the complaint to higher level, if he is not satisfied with the response.
• The customer has to confirm whether the grievance has been resolved to his / her satisfaction or not. The grievance will be deemed to be closed, if the customer does not respond via toll free number or email.
• At all branches / Head Office / any other place where the business of the Company is transacted, notice will be put up informing the customers about the Customer Care Executives, Escalation Mechanism and the Grievance Redressal Officer (including the name and contact details responsible for logging and resolving the grievances) who can be approached by the public for resolution of complaints against the Company.
• If the grievance is not redressed within one month from the date of receipt of the grievances, the customer may appeal to: The Officer In Charge, Department of Non-Banking Supervision (State of Maharashtra and State of Goa), Reserve Bank of India, Garment House, Dr. Annie Besant Road, Worli, Mumbai – 400 018 Tel: 022-24931214 / 022-24939321. Email id: helpdnbs@rbi.org.in. The complete contact details of such Officer of the Reserve Bank of India shall be provided at all branches / Head Office / any other place where the business of the Company is transacted.
• The Company shall also request the customer to provide feedback on the services rendered. This can be done through direct contact by staff or through specific customer satisfaction surveys that may be conducted from time to time.
• A periodical review of the Fair Practices Code and the functioning of the Grievances Redressal Mechanism at various levels of management would be undertaken by the Company and a consolidated report of such reviews shall be submitted to the Board of Directors of the Company, at regular intervals in a manner as prescribed by the Board from time to time.

10. Language and mode of communicating this Code

• The Company shall endeavour to have this Code translated into any vernacular language or other language as understood by the borrowers.
• The Company shall ensure that this Code is published on its website so that the information contained in this Code is accessible to all stakeholders.

11. Policy for determining Interest Rates, Processing and Other Charges

• To ensure that there the customers are not charged excessive interest rate and charges on loans and advances by the Company, the Board of Directors of the Company shall adopt a policy for determining interest rates, processing and other charges (“Interest Rate Policy”)

and the same shall be published on the Company’s website. The changes in the interest rates are also displayed on the Company’s website on a regular basis. Further the Board of Directors of the Company shall also undertake a periodical review of the Interest Rate Policy.

• The Board of Directors of the Company shall adopt an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium and determine the rate of interest to be charged for loans and advances. 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. Such aspects shall also be detailed in the Interest Rate Policy.
• The rates of interest and the approach for gradation of risks shall also be made available on the Company’s website or published in the relevant newspapers. The information published in the website or otherwise published shall be updated whenever there is a change in the rates of interest.
• The rate of interest shall be an annualised rate so that the borrower is aware of the exact rates that would be charged to his account.

The Company shall abide by this Code following the spirit of this Code and in the manner it may be applicable to its business. B. Fair Practices Code specifically for microfinance activity In addition to the general principles as above, the Company follows fair practices that are specific to its microfinance lending business and regulatory framework.

1. General

• The Fair Practices Code in vernacular language shall be displayed by the Company in its office and branch premises.
• A statement shall be made in vernacular language and displayed by the Company in its premises and in loan cards articulating our commitment to transparency and fair lending practices.
• The Company’s Field staff shall be trained to make necessary enquiries with regard to existing debt of the borrowers.
• Training if any, offered to the borrowers shall be free of cost. Field staff shall be trained to offer such training and also make the borrowers fully aware of the procedure and systems related to loan / other products.
• The effective rate of interest charged and the grievance redressal system set up by the Company shall be prominently displayed in all its offices in the respective vernacular language and on its website.
• A declaration that the Company is accountable for preventing inappropriate staff behavior and timely grievance redressal shall be made in the loan agreement and also in the Fair Practice Code displayed in its office/branch premises.
• The Company shall comply with the KYC Guidelines of RBI and due diligence shall be carried out to ensure the repayment capacity of the borrowers.
• All sanctioning and disbursement of loans shall be done only at the Company’s central location and there shall be close supervision of the disbursement function.
• The Company shall not collect any security on any loan provided under the microfinance activity.

 

2. Disclosures in loan agreement/ loan card

• The Company will have a Board approved, standard form of loan agreement which should preferably be in vernacular language.
• The loan agreement of the Company shall disclose the following details:
• All the terms and conditions of the loan
• Pricing of the loan which involves only three components i.e. the interest charge, the processing charge and the insurance premium (which includes the administrative charges in respect thereof)
• Moratorium between the grant of the loan and the due date of the repayment of the first installment as provided in the NBFC-MFIs (Reserve Bank) Directions, 2011 and as amended in future
• The loan card provided by the Company shall provide the following details:-
• The effective rate of interest charged
• All other terms and conditions attached to the loan
• Information which adequately identifies the borrower
• Acknowledgements by the Company of all repayments including installments received and the final discharge.
• The loan card will prominently mention the grievance redressal system set up by the Company and also the contact number of the Grievance cell
• Non-credit products issued shall be with full consent of the borrowers and fee structure shall be communicated in the loan card itself
• The loan card should be in vernacular language except numerical mentioned on the card.

 

3. Avoiding Over-Indebtedness

• Shall conduct proper due diligence to assess the need and repayment capacity of client before making a loan and must only make loans commensurate with the client’s ability to repay.
• Shall not breach the total debt limit for any client, as prescribed by the RBI or Central/State Governments.

 

4. Non-Coercive Methods of Recovery

• Collections shall be done in the common place where the clients can feel free for paying their installments.
• Do not contact or meet clients at odd hours, as per the RBI guidelines for loan recovery. Loan recoveries should not be made in the field before 06.00 am in morning and after 07.00 pm in the evening.
• Staff shall follow client protection guidelines adopted by the Company and should not force the clients for recoveries.
• Staff shall be allowed to make recovery at the place of residence or work of the borrower only if the borrower fails to appear at the central designated place on 2 or more successive occasions.
• Staff should not use any other persons for collection of recoveries from the clients
• Staff should enter the details in the passbook after the collecting the repayments or the staff should issue the receipt to the client as evidence for repayment.
• The Company shall ensure that a Board approved policy is in place with regard to the Code of Conduct by field staff and systems for their recruitment, training and supervision.

 

Interest Rate Policy (September 2018)

 1.  Introduction

Avanti Microfinance Private Limited (hereinafter referred to as ‘the Company’) has framed the Interest Rate Policy (hereafter referred to as “Interest Rate Policy” or “the Policy”) in accordance with the regulatory requirements specified by the Reserve Bank of India (RBI).

2.  Objectives of the Policy

This document aims to establish a framework for determining interest rates, processing charges and other charges. (All charges and rates mentioned herein are exclusive of Goods and Service Tax (GST) or any other applicable tax and the company shall charge and collect such taxes wherever applicable over and above mentioned charges and rates)

3.  Methodology for determining an Interest Rate

The guiding principles for determining interest rate are as follows

• The Board of the company shall adopt an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium and determine the rate of interest to be charged for loans and advances. 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 electronic application form and communicated explicitly through electronic
• The rate of interest to be charged for loans and advances will be in the range of 9% to 24% a.
• The rate of interest shall be arrived at after taking into account relevant factors, such as cost of funds, margin and risk premium, including the following
  • • Tenor of the Loan – The rate of interest charged will depend on the term of the loan;
    • Internal and External Costs of Funds – The rate of interest charged will also be determined depending on the rate at which funds necessary to provide loan facilities to customers are sourced by the Company, normally referred to as internal cost of funds. From an external cost of funds perspective, the benchmark interest rate that may be used by the Company could be the 10 year Government of India bond rate or any other generally acceptable benchmark rate as adjusted for the rating spreads available in the
    • Margin Cap – Cap on the difference between the amount charged to the borrower and the cost of funds to the company, shall not exceed 12 per cent. (10 per cent after loans portfolio exceeds 100 crore)
    • The interest rates charged by the company to its borrowers shall be the lower of the following:
      • • The cost of funds plus margin as indicated in (c) above; or
        • The average base rate of the five largest commercial banks by assets multiplied by 2.75. The average of the base rates of the five largest commercial banks shall be advised by the RBI on the last working day of the previous quarter, which shall determine interest rates for the ensuing qurater
    • The company shall ensure that the average interest rate on loans sanctioned during a quarter does not exceed the average borrowing cost during the preceding quarter plus the margin, within the prescribed
    • The maximum variance permitted for individual loans between the minimum and maximum interest rate cannot exceed 4 per
    • The average interest paid on borrowings and charged by the Company are to be calculated on average monthly balances of outstanding borrowings and loan portfolio respectively. The figures shall be certified annually by Statutory Auditors and also disclosed in the Balance
    • Internal Cost Loading – The interest rate charged will also take into account costs of doing business. Factors such as the complexity of the transaction, the size of the transaction and other factors that affect the costs associated with a particular transaction will also be taken into account before arriving at the final rate of interest quoted to a
    • Credit Risk – As a matter of prudence, bad debt provision cost should also be factored into all transactions. This cost is then reflected in the final rate of interest quoted to a customer. The amount of bad debt provision applicable to a particular transaction will depend on the credit strength of the
    • Fixed rate versus Floating rate – The applicable rate of interest shall also be commensurate from the perspective of the fixed versus floating interest rate requirements of the customers.
    • Periodicity of Interest – Interest will be charged for the period as stipulated in the loan agreement, subject to any modifications thereto as may be agreed by and between the Company and the customer

The rate of interest is an annualised rate so that the borrower is aware of the exact rates that would be charged to the account.

4.  General Provisions

• Processing Charges – Processing Charges (if any) shall not be more than 1% of gross loan amount. Processing charges need not be included in the margin cap or the interest cap.
• Changes in Terms – The Company shall give electronic notice to the borrower in English language with an option to choose a vernacular 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. Further, any changes in the rate of interest shall be effected only prospectively and the electronic loan agreement shall contain the necessary provisions in this
• Insurance Charges: The Company shall recover only the actual cost of insurance for group, or livestock, life, health for borrower and spouse. Administrative charges, where recovered, shall be as per IRDA
• Moratorium - The Company may consider necessary moratorium for payment of interest and repayment of principal amount with proper built in pricing, on a case to case basis. But there must be a minimum period of moratorium between the grant of the loan and the due date of the repayment of the first instalment. The moratorium shall not be less than the frequency of repayment e.g. in the case of weekly repayment, the moratorium shall not be less than one
• Grace Period - Interest will be payable by the customer / borrower on or before the due date stipulated therefor in the loan agreement entered into by the customer / borrower with the However, the Credit Committee of Executives shall have discretionary power to grant grace period to any customer / borrower.
• Additional Interest and other Charges - Besides the normal interest, the Company shall not levy additional interest in the form of penal interest for any delay in payment of dues by the customer / borrower or additional interest on other facilities etc. The Company may however levy other financial charges including processing fees (not exceeding 1% of gross loan amount), cheque bouncing charges, RTGS or such other remittance charges, commitment fees, charges for services like issuance of “no due certificate”, security swap charges etc.
• The quantum of these financial charges will be determined by the respective functional / product heads of the Company and communicated to the customer electronically. While determining the quantum of these financial charges, market practices will be taken into consideration. Notwithstanding the foregoing, as a measure of customer protection, the Company shall not charge foreclosure charges / pre-payment penalties on all floating rate term loans sanctioned to individual borrowers.
• Communication of Interest Rate to the Customer – The Company shall convey electronically to the borrower in English language with an option to choose a vernacular language as understood by the borrower, by digital means, the amount of loan sanctioned along with the terms and conditions including annualized rate of interest and method of application thereof and shall keep an electronic record of the acceptance of these terms and conditions by the borrower. The apportionment of the equated monthly instalments (“EMI”) amount towards the principal and interest will also be communicated by the Company to the customer / borrower by way of the repayments schedule.

The electronic loan card issued to the customers shall also communicate the effective interest rate charged

• Waiver of Financial Charges – Requests by the customer for waiver of financial charges would normally not be entertained by the Company and such waiver will be at sole and absolute discretion of the Credit Head or a person of equivalent position, exercised on a case to case basis or any other person that the Board deems
• Annualised Rates - The rate of interest shall be annualised rates so that the borrower is aware of the exact rates that would be charged to the
• Pre-Payment - Pre-payment options available to the customer and the penalty (only in case of a fixed rate loan) payable for exercise of such option shall be mutually agreed to on a case to case basis and communicated to the
• Company Website: The rates of interest and the approach for gradation of risks shall be made available on the web-site of the company and literature issued by it. The information published in the website or otherwise published shall be updated whenever there is a change in the rates of interest.
• Though the primary mode of all operations, processes or procedures set in this Policy are electronic or digital in nature the company may at its discretion decide to use physical/written means for all or any points covered in this

5.   Regulatory Reference

This policy is framed as per the following regulatory references and in accordance with leading industry practice:

• Master Direction - Non-Banking Financial Company –Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016

 

6.   Policy Review and Updates 

This document shall be approved by the Board and shall be reviewed at least annually. Owner of document: Manish Thakkar, Authorised Official Last date of review: September 12, 2018

Annexure – I

Interest rate and other charges framework:

Description	Charges
Interest Rate	Individual	Not exceeding 24% per annum on daily reducing balance
	Non-Individual	Not exceeding 18% per annum on daily reducing balance
Cheque bounce, cheque swapping	Up to a maximum of Rs. 250/- per instance
Mandate bounce	Up to a maximum of Rs. 250 /- per instance
Late Payment interest	Upto a maximum of 3% higher than the contracted rate for the period of delay.

   

Charges for Statement Of Account / Amortization Schedule	Nil
Prepayment charges	NIL
Stamping charges	Reimbursed on actual basis, subject to state laws-where fixed charges irrespective of loan amount, provided by IB- where ad-valorem charges as a function of loan amount, to be procured by borrower directly.