Fair Practices Code

The Fair Practice code of the Company paves the way to good corporate governance and it is the symbol of high level of corporate practices followed by the Company. This has been developed by following the Guidelines on Fair Practice Code issued by Reserve Bank of India.

Objectives:

• To build an effective relationship with the customers.
• To have Good corporate practices.
• To develop an effective management.
• For quick and effective decision making.

Application for loans and processing:

• The Company has presence in Kerala, Tamil Nadu and Andhra Pradesh, Telangana, Karnataka, and Odisha and all communications to the Borrower shall be in vernacular language or a language as understood by the borrower.
• Loan application forms issued by the Company shall include all necessary information that affects the interest of the borrower and which will enable the borrower to make a meaningful comparison of the terms and conditions of loans of the Company with terms and conditions of same type of loan offered by other NBFCs in order to take informed decision.
• The loan application form shall indicate the documents required to be executed/submitted by the borrower.
• The lending against gold shall be as per the gold loan policy as amended in line with the RBI Circular issued from time to time and as approved and adopted at the Board meetings.
• 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.
• Acknowledgement will be issued to all loan applicants and the same will indicate the time within which application will be disposed of by the Company.
• The application form will clearly state the information to be provided by the customers to fulfil the KYC norms and to comply with the legal and regulatory requirements.

Loan appraisal and Terms/Conditions:

• The Company shall issue a copy of Pawn Ticket in vernacular language as understood by the borrower showing the amount sanctioned and the terms and conditions applicable including annualised rate of interest and method of application thereof. The Company shall keep the acceptance of these terms and conditions by the borrower on its record.
• Company shall mention the penal interest charged for late repayment in bold letters in the loan agreement.
• The loan agreement shall also disclose auction procedure.
• 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 the borrowers at the time of sanction / disbursement of loans.

Disbursement of loan including changes in terms and conditions:

• The terms and conditions of the loan shall be accepted by the borrower before disbursement of the loan amount. Any change in the terms and conditions of loan including interest rates, service charges, prepayment charges etc. shall be informed to the borrower in the vernacular language as understood by the borrower. Any changes in interest rates and charges shall be only prospective. A suitable condition in this regard shall be incorporated in the loan document obtained from the borrower.
• Decision to recall / accelerate payment or performance under the agreement should be in consonance with the loan agreement.
• The Company shall 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 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.

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 follow annualized rate of interest method only.
• The information published in the website (www.iclfincorp.com) including the rate of interest, gradation of risk etc shall be updated whenever there is change in the rates.
• The rate of interest and the approach for gradation of risk and rationale for charging different rates of interest to different schemes shall be disclosed in the application form and also communicated explicitly in the sanction letter issued to the borrower.

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.
• In case of request from the borrower for transfer of borrowal account, the consent or otherwise 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.
• Recovery of loans.

The Company shall not resort to undue harassment viz; persistently bothering the borrowers at odd hours, use muscle power for recovery of loans etc.Company shall train all staff to deal with customers in a proper manner.

All Loans are sanctioned at the sole discretion of the Company.

Responsibility of Board of Directors.

The Company has framed suitable grievance redressal mechanism to resolve grievances/complaints of borrowers. All disputes arising out of the decisions of the company are heard and disposed of at least at the next higher level.

The Board shall conduct periodical review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management on quarterly basis. A consolidated report of such reviews may be submitted to the Board, as may be prescribed by it.

The FPC 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 their premises and in loan cards articulating their commitment to transparency and fair lending practices.
• 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.
• A declaration that the Company will be accountable for preventing inappropriate staff behaviour and timely grievance redressal shall be made in the loan agreement and also in the FPC displayed in its office/branch premises.
• The KYC Guidelines of RBI shall be complied with.
• Due diligence shall be carried out to ensure the repayment capacity of the borrowers.

Grievance Redressal Officer :

The Company shall display the following information prominently, for the benefit of their customers, at their branches / places where business is transacted:

• (a) The Company has designated Mr. K.G.Anilkumar as the Grievance Redressal Officer who can be approached by the public for resolution of complaints against the Company as under.

Mr. K.G.Anilkumar
Chairman And Managing Director
M/s.ICL Fincorp Limited
No.61/1, VGP Complex First Avenue, Ashok Nagar Chennai TN 600083 IN

• (b) 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 (complete contact details), under whose jurisdiction the registered office of the NBFC falls as under.

General Manager
Department of Non-Banking Supervision,
Reserve Bank of India, Fort Glacis,
RajajiSalai, Chennai - 600 001
Phone No: 044-25393406, Fax No: 044-25393797
Email ID: dnbschennai@rbi.org.in

Language and mode of communicating Fair Practice Code:

The Company shall prepare the Fair Practices Code in English language as the same is understood by the borrowers and the same should be put in the website (www.iclfincorp.com).

Regulation of excessive interest charged by the Company:

• 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.
• The rates of interest and the approach for gradation of risks shall also be made available on the web-site of the companies or published in the relevant newspapers. The information published in the website or otherwise published should be updated whenever there is a change in the rates of interest.
• The rate of interest should be annualized rate so that the borrower is aware of the exact rates that would be charged to the account.

Repossession :

• The Company must have a built in re-possession clause in the contract/loan agreement with the borrower which must be legally enforceable. To ensure transparency, the terms and conditions of the contract/loan agreement should also contain provisions regarding:
• (a) notice period before taking possession;
• (b) circumstances under which the notice period can be waived;
• (c) the procedure for taking possession of the security;
• (d) a provision regarding final chance to be given to the borrower for repayment of loan before the sale/auction of the property;
• (e) the procedure for giving repossession to the borrower;

A copy of such terms and conditions must be made available to the borrower in terms of circular wherein it was stated that the Company may invariably furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction / disbursement of loans, which may form a key component of such contracts/loan agreements.

Gold loan Policy:

While lending to individuals against gold jewellery, the Company shall adopt the following in addition to the general guidelines as above.

• 1. The Company shall make a Board approved policy for lending against gold that should inter alia, cover the following:

KYC procedures.
1. ID Proof and Address proof of the Borrower.
2. PAN, if any.
3. Photo (1 No).
4. Appraisal procedure for gold.
5. Declaration from the borrower confirming ownership of jewellery.
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 an on-going basis, training the concerned staff and periodic inspection by internal auditors to ensure that the procedures are strictly adhered to. Normally, such loans should not be extended by branches that do not have appropriate facility for storage of the jewellery.

• 2. All branches shall have proper storage facility of either Strong Rooms or Safes conforming to ISI Standards of approved make to store the jewellery in safe custody. The keys to the strong room/safe shall be held separately by two officials and the operations thereof shall be done jointly.
• 3. The staff shall be imparted training on a continuous basis to ensure that the guidelines covering security issues are strictly adhered to. The gold items shall be periodically inspected by the internal auditors to ensure quality, quantity and proper storage.

- The jewellery accepted as collateral should be appropriately insured.

- Transparent auction procedure in case of non-repayment with adequate prior notice to the borrower. 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 two newspapers, one in vernacular language and another in national daily newspaper. Auction procedure shall be imparted in the loan document.

- As a policy, the Company themselves should 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 shall also disclose details regarding auction procedure.

CONFIDENTIALITY

The company shall treat all personal information of its borrowers as private and confidential and will not reveal any information to any other entity other than for regulatory / statutory matters.