Fair Practice Code

Fair Practice Code

 

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Click here to read in Marathi

  • IntroductionOpen or Close

    Paras Capfin Co Pvt Ltd, a Non-Banking Finance Company registered with Reserve Bank of India ("RBI") is presently in the business of providing different types of loans which includes Enterprise Group Loans, Individual Loans & Machine Loan. Paras Capfin Co Pvt Ltd ("Paras") has framed and adopted a set of principles for fair practice standards when dealing with customers. As per the RBI directives, we have adopted and will implement these standards in our organization which has been duly approved by Board of Directors of the Company. This Fair Practices Code applies to all categories of products and services offered by Paras.

  • CommitmentsOpen or Close
    Paras's commitment to its customers are:

    • Meeting the standards set in this code in all its products, services & processes
    • Ensuring that all its products & services are complying with all relevant laws and regulations
    • Its dealings with customers through its staff are on the principles of trust, integrity and transparency
    • All the financial costs/implications of all its products & services will be clearly explained to the customer's in the language that they understand
    • All complaints will be handled quickly and mistakes if any will be rectified immediately
  • Loan Application and their processingOpen or Close
    • All communications to the borrower will be in the vernacular language or a language as understood by the borrower. All communication will be in English, Hindi & the local language of the state in which Paras is doing its business
    • The loan application form will have adequate information, which will enable the customer to make a meaningful comparison with the terms and conditions offered by other NBFCs, so that the customer is able to make an informed decision
    • The loan application form will give an indicative list of documents required to be submitted while applying for a loan
    • Paras will give an acknowledgement for receipt of loan application, which will also indicate the time frame in which the application will be processed
  • Loan appraisal and terms/conditionsOpen or Close

    Paras will convey in writing to the borrower in the vernacular language or a language as understood by the borrower by means of sanction letter or otherwise, the amount of loan sanctioned along with the terms and conditions including annualised rate of interest and method of application thereof and keep the acceptance of these terms and conditions by the borrower on its record. The Company will mention the penal interest charged for late repayment in bold in the loan agreement.
    Paras will furnish 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 to all the borrowers at the time of disbursement of loan.

  • Disbursement of LoansOpen or Close
    • Paras will give 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, prepayment charges etc.
    • Any changes in interest rates and charges will be effected prospectively. A suitable condition to that effect will be incorporated in the loan agreement
    • Decision to recall / accelerate payment or performance under the agreement will be in consonance with the loan agreement
    • Paras will 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 Paras may have against borrower. If such right of set off is to be exercised, the borrower will be given notice about the same with full particulars about the remaining claims and the conditions under which Paras is entitled to retain the securities till the relevant claim is settled/paid
  • GeneralOpen or Close
    • Paras will refrain from interfering in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement (unless new information, not earlier disclosed by the borrower, has been noticed)
    • In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise i.e. objection, if any, will 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.
    • In the matter of recovery of loans, Paras will not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc. Paras shall ensure that its staff are adequately trained to deal with the customers in an appropriate manner.
    • Paras shall not charge any foreclosure charges / pre-payment penalties on all floating rate term loans sanctioned to individual borrowers
  • Grievance Redressal MechanismOpen or Close
    • Customer Satisfaction is of utmost importance to Paras and any customer grievance needs to be resolved with utmost urgency. Paras will have a Customer Service Department, which will handle all customer complaints. Any complaint's which are not resolved within the prescribed time frame will be escalated to the Grievance Redressal Officer
    • Paras will prominently display at all branches/places where business is transacted a board outlining the "Customer Service Contact Points" which will have the following -
      • Email ID
      • Toll Free No
      • Website
      • Office Address
    • The following information shall be displayed prominently, for the benefit of the customers, at all branches / places of Paras where business is transacted:
      • The name and contact details (Telephone / Mobile nos. as also email address) of the Grievance Redressal Officer who can be approached for resolution of complaints against Paras
      • The name and contact details of Officer-in-Charge of the Regional Office of DNBS of RBI, under whose jurisdiction the registered office of Paras falls
      • Message stating - "If the complaint / dispute is not redressed within a period of one month, the customer may appeal to the Officer-in-Charge of the Regional Office of DNBS of RBI"
      • There will be a periodical review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management. A consolidated report of such reviews will be submitted to the Board at regular intervals.
  • Communication of Fair Practice CodeOpen or Close

    The Fair Practices Code in English, Hindi & Local language of the state in which Paras is operating will be communicated through the following channels -

    • Copy of Fair Practice Code will be made available at all branches/places where business is transacted
    • Fair Practice Code will be put up on the website of Paras for the information of various stake holders
  • Regulation of rate of interestOpen or Close
    • The Board of Directors has adopted an interest rate model for determining the rate of interest to be charged on loans and advances, processing and other charges taking into account relevant factors such as, cost of funds, margin and risk premium, etc. 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
    • The rates of interest and the approach for gradation of risks shall also be made available on the website of Paras and will be updated whenever there is a change in interest rate
    • The rate of interest should be annualised rates so that the borrower is aware of the exact rates that would be charged to the account.
  • Repossession of SecurityOpen or Close

    Paras will include a built in re-possession clause in the loan agreement with the borrower which must be legally enforceable. To ensure transparency, the terms and conditions of the loan agreement should also contain provisions regarding:

    • Notice period before taking possession
    • Circumstances under which the notice period can be waived
    • The procedure for taking possession of the security
    • A provision regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the security
    • The procedure for giving repossession to the borrower and
    • The procedure for sale / auction of the security
  • Lending against collateral of gold jewelleryOpen or Close

    In addition to the general guidelines as above, Paras shall, while lending to individuals against gold jewellery, follow a Board approved policy, containing, inter-alia, the following:

    • Adequate steps to ensure that the KYC guidelines stipulated by RBI are complied with and to ensure that adequate due diligence is carried out on the customer before extending any loan
    • Proper assaying procedure for the jewellery received
    • Internal systems to satisfy ownership of the gold jewellery
    • Adequate systems for storing the jewellery in safe custody, reviewing the systems on a on-going basis, training the concerned staff and periodic inspection by internal auditors to ensure that the procedures are strictly adhered
    • The jewellery accepted as collateral should be appropriately insured
    • The policy with regard to auction of jewellery in case of non-repayment shall be transparent and adequate. Prior notice to the borrower should be given before the auction date. It should also lay down the auction procedure that would be followed. There should be no conflict of interest and the auction process must ensure that there is arm's length relationship in all transactions during the auction including with group companies and related entities
    • The auction should be announced to the public by issue of advertisements in at least 2 newspapers, one in vernacular language and another in national daily newspaper
    • Paras shall not participate in the auctions held
    • Gold pledged will be auctioned only through auctioneers approved by the Board
    • The policy shall also cover systems and procedures to be put in place for dealing with fraud including separation of duties of mobilization, execution and approval.

    The loan agreement for lending against gold shall also disclose details regarding auction procedure.