STARLAA FINANCE AND HIRE PURCHASE LIMITED
FAIR PRACTICE CODE
[As per the guidelines issued by RBI vide Master Direction DNBR.PD.007/03.10.119/2016- 17 dated (As updated on 16th May 2019)]. (As amended and approved by the Board at the meeting held on 05th July 2019)
This Fair Practices Code has been formulated to offer all our stakeholders, particularly our customers, a comprehensive understanding of the Company's practices when providing products and services. It is designed in accordance with the 'Guidelines on Fair Practices Code for NBFCs' issued by the Reserve Bank of India, periodically updated. Our goal is to empower customers to make informed decisions regarding the facilities and services offered by the Company.
We will uphold fair practices in all our operations, whether services are provided at our branches, head office, over the phone, or via email.
KEY AREAS
- (A). Applications For Loans And Their Processing
- a) All communications to the borrower shall be in vernacular language or in a language understood by the borrower.
- b) All the customers will be provided with unique customer ID.
- c) The application for loan will include matters/information affecting the interests of the borrower so that a meaningful comparison with the terms and conditions offered by other NBFCs can be made and informed decision can be taken by the borrower.
- The loan application form will indicate the documents required to be submitted with the application form.
- d) The rate of interest and the approach for gradation of risk and rationale for charging different rate of interest to different categories of borrowers shall be disclosed to the borrowers in the application form and communicated to him in the sanction letter. Further the information shall also be made available in the web site of the company.
- e) Acknowledgement will be issued to all loan applicants and the same will indicate the time within which the application will be disposed of by the company.
- f) KYC guidelines stipulated by RBI should be strictly complied with and adequate due diligence should be carried out on the borrower before extending any loan.
- g) Minimum one guarantor is a must, If loan applicant is a bachelor or married, parents and outside Person should be guarantor. An additional guarantor may be insisted as per the loan requirements.
- (B). Loan Appraisal And Terms/Conditions
- a) All loan applications must be processed by more than one individual. All loan application should be processed by the Sanctioning authority and the decision regarding the loan application should be intimated to the applicant. In case of Vehicle Loans decision should be communicated within two or three days of receipt of loan application.
- b) Company shall mention the penal interest charged for late repayment in bold in the loan agreement.
- c) 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 shall be furnished to all the borrowers at the time of sanction / disbursement of loans.
- d) End use of sanctioned amount should be evaluated by the credit team strictly in case of all loans.
- e) If there is any delay in sanctioning the loan beyond five days, the customer shall be informed of the same and when it is possible to sanction the loan.
- (C). Disbursement Of Loans Including Changes In Terms And Conditions
- a) The terms and conditions of the loan shall be accepted by the borrower before disbursement of the loan amount. The company shall disburse the loan on executing necessary documents and on completion all formalities. Any change in the terms and conditions of the loan, including disbursement schedule, interest rates, service charges, prepayment charges etc.. will be brought to the notice of the customer by sending notice in vernacular language as understood by the borrower. Change in interest rates and other charges will be made only prospectively and not retrospectively. A suitable condition in this regard will be incorporated in the loan agreement.
- b) Decision to recall / accelerate payment or performance of the loan will be only in consonance with the loan agreement.
- c) The company shall release all securities on repayment of all dues or on realisation 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 to 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.
- d) It should be mentioned in the loan agreement that the rate of interest will be revised only prospectively and not retrospectively
- (D). Rate Of Interest
- The company shall frame appropriate internal principles and procedures to determine the interest rates and other charges to ensure that they are not excessive. Fixation of such interest rates and other charges are in strict conformity with the above said internal principles and procedures. The interest rates of loans always be expressed in simple rates. The application form shall contain the detailed rationale for charging a particular rate of interest. The sanction letter will detail the rates of interest charged for a particular loan scheme. The rate of interest shall be annualised rate so that the borrower is aware of the exact rates that would be charged to the account. Penal interest if any charged will be shown in bold letters.
- (G). General
- i. The company will not interfere in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement unless such circumstances arise which may result in the breach of the contact
- ii. In case of any request for transfer of loan account, the decision of the Company 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.
- iii. The Company will not resort to any undue harassment of the borrower for the recovery of loans. However the Company reserves its right to repossess the assets financed as per the terms of the contract and in consonance with the law.
- iv. All loans should be sanctioned and disbursed only from the central location.
- v. Non-coercive method of recovery has to be adopted. Field staff shall be allowed to make recovery at the residence of the borrower only if the borrower fails to appear at the central designated place on 3 or more occasions. The Company shall ensure that all the staffs are adequately trained to deal with the customers in an appropriate manner.
- vi. Internal auditors of the Company should conduct regular and periodic inspection to ensure that the system and procedures are strictly adhered to and that all the required documents are attached with the Loan sanction letter/agreement. Internal auditors of the Company should ensure that the loans are extended to genuine owners only The Individuals designated for compliance of various systems, procedures and internal control including audit and periodic inspection will be held responsible for the violations / non compliance. The internal audit team will ensure periodically audit and include compliance as a part of reporting.
- vii. Assignment of duties, job rotation, separation of duties of mobilization, execution and approval that are adopted by the Board of Directors from time to time for the smooth operation and functioning of the system will be binding on all employees of the Company.
- viii. Customer Relationship Officer should enter the details in the passbook after the collecting the repayments or the Officer should issue the receipt to the client as evidence for repayment.
- (F).Grievance Redressal Mechanism
- a) The Company has framed a suitable mechanism for redressal of customer grievances/ complaints. All disputes arising out of the decisions of the company are heard and disposed of at least at the next higher level. The Senior Management shall review the compliance of the fair practice code and the functioning of the grievance redressal mechanism on a quarterly basis. A consolidated report of such reviews shall also be submitted to the Board of Directors on a half-yearly basis.
- b) The Contact Names and Contact numbers of the officials of the grievance redressal cell should be prominently displayed both in English and in Vernacular language at the Registered Office and the Branch offices on the Company.
- c) In case a customer complaint/dispute is not redressed within a period of one month, the customer may appeal to the Asst. General Manager, Reserve Bank of India, Department of Non-Banking Supervision, Bakery Junction, Thiruvananthapuram (Ph.0471 2329676).
- (H) Language And Mode Of Communication
- The Fair practices code put in place by the company is in English. In case it is not understood by a customer, the company shall issue a copy of the same in Malayalam
