Pursuant to Reserve Bank of India (RBI) ’s Circular No. DNBS.CC.PD.No. 320/03.10.01/2012-13 Date February 18, 2013 issued to Non-Banking Financial Companies (NBFCs), the Board of Directors have adopted a Fair Practices Code at its Meeting held on 30th May, 2013 at Secunderabad.
The Fair Practices Code, as adopted herein below, is in conformity with the Guidelines on Fair Practices Code for NBFCs as contained in the aforesaid RBI Circular.
The Fair Practices Code covers the following areas :-
(1) Applications for loans and their processing
(2) Loan appraisal and terms / conditions
(3) Disbursement of Loans including changes in terms and conditions
(4) General
(5) Grievance Redressal Mechanism
(6) Regulation of excessive interest charged
Applications for Loans & their processing
All communications to the Borrower shall be in the vernacular language or a language as understood by the Borrower.
Borrowers who have evinced interest in availing the loan from Gowra Leasing & Finance Ltd. (herein after called “GLFL”) should fill up the loan application form which contains the necessary information which affects the interest of the borrower and documents required to be submitted with the application form, complete in all aspects and submit the same to GLFL 's Registered Office.
The application so received will be acknowledged by GLFL on submission duly mentioning the time frame within which the loan application will be disposed. GLFL shall consider all the documents submitted and the information provided, assess the credit worthiness of the Borrower and evaluate the proposal at its sole discretion and application will be disposed of within 15working days from the date of receipt of all requisite documents / information and if no communication is received by the Borrower, the loan application is deemed to have been rejected and GLFL shall not send any communication for rejected cases.
Loan Appraisal and Terms / Conditions
The sanction letter in the vernacular language or the language understood by the Borrowers would convey the following:
Amount Financed
The annualized rate of interest
Details of security to be offered
Loan repayment period and schedule
Penal interest or delayed payment charges (in case of delay in payments of installments / interest beyond due dates) will be mentioned in BOLD letters
Documents to be executed by the Borrower and guarantor and co-borrower for disbursement of loan
Legal and Loan processing charges
The Borrower and Guarantor(s) to return to GLFL a copy of the sanction letter duly acknowledged by them as a token of acceptance to the terms and conditions of sanction.
Loan agreement provides a clause for the delayed payment charges / fees and the same is in BOLD letters.
The borrower will be furnished with a copy of the loan agreement executed along with a copy of all enclosures quoted in the loan agreement upon disbursement of loan.
Disbursement of Loans, including changes in terms & conditions
Any change in terms and conditions like change in disbursement schedule, interest rate, tenure, all service charges, prepayment charges would be communicated to the borrower in writing in the vernacular language or the language understood by the Borrowers.
The said changes in the interest rate and charges would be with prospective effect.
Any decision to recall / accelerate payment would be communicated to the borrower in writing as per the terms of the Loan Agreement.
GLFL would release all securities 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 GLFL may be having against the said borrower. In case such right of set off is to be exercised, GLFL shall give notice to the borrower about the same with full particulars about the remaining claims and the conditions under which GLFL is entitled to retain the securities till the relevant claim is settled / paid.
General
GLFL would refrain from interference in the affairs of the Borrower except for the purposes provided in the terms and conditions of the Loan Agreement and unless new information, not disclosed by the Borrower earlier, has come to the notice of GLFL.
In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise i.e. objection of GLFL , 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.
GLFL have an exclusive recovery team who are specialized in handling collection activity in a professional manner by adopting a due legal process as per the law of the land. Since it is a specialized function, the quality is addressed at the recruitment level itself. GLFL will ensure that the staff is adequately trained to deal with the customers in an appropriate manner.
In the matter of recovery of Loans, GLFL would not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc.
Grievance Redressal Mechanism
In case of any complaint / grievance, the Borrower can make his complaint to the Grievance Redressal Officer of GLFL, ShriG.L.Prasad, Executive Director, through any of the following modes :
These complaints will be received by Grievance Redressal Officer at our Registered Office in Secunderabad. The Grievance Redressal Officer / Authority would take all necessary steps to redress and resolve the grievance / dispute, preferably within a maximum period of 30 days.
GLFL shall not only ensure that all the complaints received are recorded and resolved, but also ensure effective monitoring / escalation mechanism to the senior levels responsible so as to ensure that none of the complaints remain unresolved. Board will review the complaints and their resolution every quarter in its Board Meeting.
At Registered Office of GLFL, display board is put up at prominent place informing about the Grievance Redressal Mechanism [including the name and contact details (Telephone / Mobile nos. and also e-mail address) responsible for logging and resolving. Also detailed information (including contact details) is mentioned on how to escalate the matter, in case Borrower finds resolution inadequate. If the complaint / dispute is not redressed within a period of 30 days, the Borrower may appeal to –
The General Manager
Department of Non-Banking Supervision (DNBS)
Reserve Bank of India
Secretariat Road,Saifabad
Hyderabad – 500004
Complaints about excessive interest charged by NBFCs
GLFL charges interest only as per the terms of the contract. The terms of the contract are clearly mentioned in the sanction letter as well as the loan agreement and any delay in payment of installments / interest as per the repayment schedule will attract penal interest as mentioned in the sanction letter and Loan Agreement. This rate of penal interest is fixed to act as a deterrent to the Borrower in delaying the payment of the installment / interest.
Regulation of excessive interest rates charged by NBFCs
Rate of interest
GLFL intimates the borrower, the loan amount and rate of interest at the time of sanction of the loan.
Approach for gradation of risk
The rate of interest is arrived at based on the weighted average cost of funds, administrative costs, risk premium and profit margin.
The decision to give a loan and the interest rate applicable to each loan account is assessed on a case to case basis, based on multiple parameters such as the type of asset being financed, borrower profile and repayment capacity, borrower’s other financial commitments, past repayment track record if any, the security for the loan as represented by the underlying assets, loan to value ratio, mode of payment, tenure of the loan, geography (location) of the borrower, end use of the Loan etc. Such information is collated based on borrower inputs and field inspection by GLFL officials.
The rate of interest shall be annualized rates so that the borrower is aware of the exact rate that would be charged.
The Management
Company
The Management
