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FPC

Introduction of Fair Practice code

Reliant Credits (India) Limited is a Non-Banking Financial Company as defined under Section 45-IA of the Reserve bank of India Act, 1934. It was initiated by a group of visionary young entrepreneurs primarily based on Kothamangalam.

The Company has over 100 branches spread across Kerala, Karnataka and Telangana region with major portfolio of Gold loan followed by Microfinance and Business Loans.

Objectives

This Fair Practice Code (FPC) sets out the minimum practices to be followed by the Company while dealing with the customers. This FPC is formulated in pursuance of the guidelines issued by the Reserve Bank of India on Fair Practice Code for NBFCs vide Master Circular DNBR (PD) CC.No.054/03.10.119/2015-16 dated July 01, 2015, to ensure better service and provide necessary information to customers to take informed decisions.

    The objectives of the FPC are as under:
  • To adopt and promote the transparent, fair, ethical and legally tenable best practices by setting standards in dealings with customers.
  • To set challenging benchmarks and strives to achieve high operating and transparency standards for ensuring customer satisfaction.
  • To provide all necessary information and inputs to customers to increase the transparency in the dealings and to appraise them of the services rendered by the Company so that the customers can take informed decision and thereby promote a fair and cordial relationship with the customers.
  • To facilitate a continuously growing base of satisfied customers while carefully avoiding acquisition of customers having doubtful credentials or criminal background.

Guidelines on fair practices code

    Loan Application, Appraisal, Disbursement and Terms & Conditions
  • The Company shall make available loan application forms in vernacular language to all prospective customers free of cost at the concerned branches.
  • The loan application form should include necessary information which affects the interest 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 customer / prospective customer. It shall also indicate the documents required to be submitted along with the application form.
  • An acknowledgement for receipt of duly completed loan application forms shall be given to the customer in all cases. As a matter of policy and customer service, the loan applications shall be sanctioned / rejected immediately. Disbursement of the loan and acceptance of security will be carried out nearly simultaneously.
  • The Company shall disclose all relevant information relating to a loan / product such as eligible loan amount, interest rate, charges, penal/overdue interest, interest calculation methodology, rebate on interest etc. before sanction of the loan to enable the customer / prospective customer to take an informed decision.
  • The Company shall ensure that a loan sanction letter (which shall mean pawn ticket in case of Gold Loans) is given to the customer containing all the terms and conditions governing the loan facility in the vernacular language or any other language understood by the customer. The loan sanction letter shall also mention the loan amount, loan account number, interest rate, charges, loan processing fees etc. The loan sanction letter which shall bear the signature of the authorized official of the Company will also serve as a receipt for the security (gold, in case of Gold Loan) pledged at the branch by the customer.
  • The Company should give notice to the customer 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, prepayment charges etc. Any changes in interest rates and charges shall be effected only prospectively.
    • Marketing & Promotion
  • The Company shall not deliberately promote a product with any ulterior / selfish motives or contrary to the customer requirements or expectations as disclosed by the customer.
  • The Company will ensure that its personnel engaged in marketing and operations are suitably trained and instructed so as to preclude selling of its products by misrepresentation to the customer / prospective customer.
  • The Company will not indulge in profiteering by charging usurious rates of interest on loans or take undue advantage of adverse market conditions. The rates of interest will be based on variables such as cost of funds, risk premium, loan scheme, loan per gram, profit margin etc. and shall be in conformity with the Interest Rate policy of the Company and regulatory guidelines from time to time. It shall also, by and large, be in tune with industry practices and benchmarks.
  • Full and updated information regarding loan schemes, rate of interest, loan per gram, charges etc. will be displayed on the website of the Company and also displayed in the branches. Complete or select information will also be made available through various media channels, posters, brochures, notices, displays etc. based on the decisions of the management of the Company from time to time.
    • Rate of Interest
  • The Company shall frame appropriate internal principles and procedures for determining the interest rates and processing and other charges, if any, and also to ensure that they are not excessive. The Company shall, at the time of disbursal, ensure that the interest rate and other charges, if any, on loan and advances are in strict adherence to above referred internal principles and procedures.
  • The Company shall disclose in the application form and explicitly in the sanction letter, the rate of interest and the approach for gradation of risk and rationale for charging different rate of interest to different categories of borrowers.
  • The Company shall also publish the rates of interest and the approach for gradation of risks in the relevant newspapers or in the website of the Company and shall be updated whenever there is a change in the rate of interest.
  • The Company shall also mention the annualized rates so as to make the borrower aware of the exact rates that would be charged to the account.
    • Recovery of Dues, Exercise of Lien & Delivery of Security
  • The Company will not, as a matter of fair dealing, normally recall the loan before the initially agreed tenure except in unanticipated or abnormal circumstances where the Company’s interests are adversely affected e.g. when the security value diminishes substantially, when the quality of gold is not found to be acceptable, due to any regulatory / government directives etc. Any such decision to recall / accelerate payment or performance under the agreement shall be in consonance with the loan agreement and proper and reasonable notice shall be given to the customer in this regard.
  • The Company will make all possible soft or persuasive efforts to get the customer to repay the dues without resorting to disposal of the security. The Company does not accept and will not encourage the use any coercive or hard measures to recover its dues from the customer. The Company shall also not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans.
  • The Company shall release the security (gold) to the customer immediately on repayment of all dues or on realization of the outstanding amount of loan in the same condition as was at the time of sanction of the loan. In case of any damage caused to the security (gold) due to mishandling by its employees, the Company shall at its cost get the damage repaired or alternately pay reasonable compensation to the customer on a case to case basis. If the security (gold) has signs of damage thereon, before being taken custody of by the Company at the time of sanction of loan, the fact will be briefly incorporated in the sanction letter (pawn ticket).
  • The Company shall exercise only legitimate right of lien over the pledged security or such cash surplus as may arise upon settlement of existing loans at any time. Such right of lien shall arise only if the customer has any other dues, either directly or as guarantor, and will be subject to proper intimation of such right of lien being given to the customer by the Company.
  • The Company shall issue a signed and, normally, a system generated receipt for all cash payments made by the customer immediately. The Company shall also accept payments vide cheques, demand drafts, electronic transfers etc. subject to the condition that return of the security (gold) will be made only after confirmation of realization.
  • Even though the loan Sanction Letter (pawn ticket) contains all applicable terms and conditions of the loan the Company shall, nevertheless, endeavor, on a best effort basis, to send advices, reminders etc. regarding due date for payment of interest, principal etc. by letter, courier service, telephone, SMS etc.
  • The Company shall, on demand, provide the customer or his duly authorized representative with a statement of the loan account at any time during the currency of the loan or immediately upon closure. However, the Company may, at its discretion, require payment of reasonable processing charges by the customer for providing statement of account if such demand is made 30 calendar days after closure of the account.
  • The Company shall resort to disposal of security (gold) only as a last resort and that too after adequate and proper notice is served on the customer to repay the dues. Such notice will be as per the terms contained in the sanction letter (pawn ticket) and also in compliance with applicable laws and regulatory guidelines. The disposal of the security (gold) will be taken up through public auction when the customer does not positively respond to the communications sent by the Company to close the loan account along with interest and other charges.
  • Where the Company proposes to dispose of the security even before the normal tenure of the loan based on the rights conferred on the Company vide loan application and loan sanction letter (pawn ticket) adequate and proper notice will be served on the customer before such action is initiated for recovery of dues.
  • The Company prefers and encourages customers to take back delivery of the security immediately upon full settlement of all dues. However, should there be exceptional instance of the Customer being unable to take delivery of the security (gold), not attributable to the inability of the Company, after closure of the loan account reasonable safe custody charges may be payable which will be duly advised to the customer or displayed in the branch premises and the Company’s website.
  • The Company will not interfere in the affairs of the customers except for the purposes mentioned in the terms & conditions of the loan or when constrained to do so due to inadequate or false disclosures made by the borrower at the time of putting through the transactions.
    • Repossession of Security
  • The Company reserves the right to enforce security for recovery of dues on the terms and conditions stipulated in the loan agreement in case of default in payment or on the occurrence of any other event of default. During recovery of loans, the Company will not resort to undue harassment like bothering the borrowers at odd hours or use of force for recovery of loans.
  • The Company would refrain from intervening in the affairs of the borrowers except as provided in the terms and conditions mentioned in the loan agreement, unless new information, not disclosed by the borrower, has come to the notice of the Company.
  • The Company would not discriminate on grounds of sex, caste and religion in the matter of lending.
  • In case of receipt of request for transfer of borrower account, either from the borrower or from any other financial institution, which proposes to take over the account, the consent or otherwise i.e. objection of the Company, if any, would be conveyed within 21 days from the date of receipt of request.
  • Repossession of security is aimed at recovery of dues and not to deprive the borrower of the security. The recovery process through repossession of security will involve repossession, valuation of security and realization of security, through appropriate means. All these would be carried out in a fair and transparent manner. Repossession will be done only after issuing proper notices. Due process of law will be followed while taking repossession of the security.
  • The Company will take all reasonable care for ensuring the safety and security of the collateral after taking custody, in the ordinary course of the business.
  • An appropriate grievance redressal mechanism would be put in place whereby disputes arising out of the decisions of Company’s functionaries would be heard and disposed of.

Customer Service & Grievance Redressal

  • The Company shall have a Board approved Customer Service and Grievance Redressal Policy in place to address and minimize customer complaints / grievances.
  • The Company will facilitate the customer to pay the whole or part of the dues at any of the branches of the Company subject to the condition that delivery of the pledged security shall be made only at the branch where loan was originally disbursed.
  • The Company shall put in place an effective Customer Grievance Redressal Mechanism details of which will be displayed on the website and in all the branches. The mechanism shall specify, inter alia, the names & designations of the officials with whom complaints can be registered, their postal address / telephone numbers / email address, escalation matrix, time limit for acknowledging receipt of complaint, time limit for dealing with the complaint etc. It shall also put in place at all offices where business is transacted, the FAIR PRACTICE CODE - RCIL complete contact details of the Regional Office of Reserve Bank of India, Thiruvananthapuram, within whose jurisdiction the registered office of the Company is situated, so that the customers may directly approach the Reserve Bank of India in case their grievances are not redressed within one month of the receipt of complaints by the Company.
  • The Company shall put in place an effective training system to ensure that employees of the Company are customer friendly and do not resort to rude, inappropriate or unethical behavior.
  • The Company shall endeavor to work out and display the time norms for putting through and completing the various transactions.
  • The Company shall have a sympathetic approach to the problems faced by the customer especially the poor and underprivileged sections.

Miscellaneous

  • The Company shall display the normal business hours at the respective branches, the list of holidays and notify the changes, if any, by way of a notice displayed in the premises of the branch or through press notification.
  • Personal information of the customer will not be shared with unauthorized persons or agencies or third parties by the Company. However, the Company will be bound to honour and comply with legal or regulatory requirements, if any, in this matter obligating it to part with such information even without notice to the customer.
  • Wherever locker facility is extended by the Company through its branches, it shall be ensured that appropriate disclosure is in place to communicate to the customers that the activity is not regulated by the Reserve Bank of India.

Review

  • A review of the compliance of the Fair Practices Code and the functioning of the Grievance Redressal Mechanism will be carried out by the Board of Directors every year.

Amendments

SL No Name of Policy Version Board approval date Remarks
1 Fair Practice Code v1.0 20.08.2015 Policy document approved.
2 Fair Practice Code v1.1 05.05.2016 --
32 Fair Practice Code v2.0 07.09.2023 Policy revamped completely.

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