Fair Practices Code

This Fair Practices Code of the company has been framed with a view to provide all the stakeholders, especially customers, with an effective overview of the practices followed by the Company while offering its services.

"BASNAT INDIA LIMITED" hereby furnishes Fair Practices Code has been prepared by taking into account the “Guidelines on Fair Practices Code for NBFCs” as advised by Reserve Bank of India. The Company shall also make appropriate modifications in the FPC from time to time to confirm the standards that may be prescribed by RBI. 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 Circulars.

Objectives

This Code has been drawn to

Adopt the best practices in dealing with customers.
Provide the customers an effective overview of the practices followed by the Company.
Enable customers to take informed decisions while dealing with the company and enable customers to have a better understanding of what they can reasonably expect from the services offered by the Company.
Promote fair, transparent and legally tenable practices.
To strive to achieve higher operating standards.
Aiming fair and cordial relationship between the customers and the Company.

The Fair Practices Code adopted by the Company covers the following areas

Application & Appraisal for loans.
Sanctioning with terms & conditions.
Disbursement of loans,
Post disbursement supervision/monitoring
Changes in terms and conditions if any.
Transparency in interest rates and other terms and conditions.
Policy on KYC, Appraisal, insurance, storage of securities, Auction etc.
Confidentiality.
Grievance redressal mechanism.

Application & Appraisal of Loans Along With Kyc Verification

The Company shall put in place a board approved policy covering the following aspects:
Adequate process to ensure that the KYC guidelines of RBI are complied with that adequate due diligence before extending the loan.
All applications and communications with the borrower shall be either in English or in vernacular language or in a language as understood by the borrower.
Loan application forms issued by the Company shall include necessary information affecting the interests of the borrower, which will enable him to take an informed decision by comparing the terms and conditions with that of other similar NBFCs, and shall also indicate the documents required to be executed/ submitted by the borrower.
All the loan applications shall be disposed of within a period of 90 days from the date of Receipt of duly completed Loan Application Forms together with the requisite documents and subject to receipt of all documents complying with prevailing rules and regulations by the borrower.
The appraisal shall be done internally by the company.
The Company shall consider all the loan applications keeping in mind the risk-based assessment procedures adopted by it and The Company, before sanctioning the loan, would assess the ability of the borrowers to repay the loan and thereby approving the same on merit basis.
Proper appraisal procedure shall be put in place for assessing the value and purity of the jewelry accepted as collateral security.
Declaration shall be obtained from the borrower confirming ownership of gold jewelry, which shall be ascertained with reasonable level of care.
If the Company cannot provide the loan to the customer, it shall communicate in writing the reason (s) for rejection thereof.

Sanctioning & Terms & Conditions

The borrower shall be given a loan sanction letter and copy of the loan document required in English & vernacular language or a language as understood by the borrower which shall include the details of the loan such as amount sanctioned, annualized interest rate, method of application thereof and other terms and conditions stipulated.
The Interest rate fixed and penal interest that will be charged for late payment shall be mentioned clearly in the sanction letter.
Borrower shall acknowledge the sanction letter which will be part of the loan documents.

Disbursement of Loans & Xhanges in Terms & Conditions

The loan shall be disbursed on executing the necessary documents and completion of documentation and handing over of the security offered by the borrower. Any change in the terms and conditions shall be informed to the borrower in the vernacular or a language known to the borrower.
Changes in interest rates and charges shall be only prospective & never retrospective. A suitable condition in this regard shall be incorporated in the loan document obtained from the borrower.
The decision to recall/ accelerate payment or performance shall be as per the covenants in the loan document.

Post Disbursement Supervision/Monitoring

The decision, if any, of the Company to recall/accelerate payment or performance of loan shall be in accordance with the terms and conditions of the Loan Agreement.
The Company shall give reasonable time to the borrowers before recall the loan or asking for accelerating the payment or performance subject to the terms and conditions contained in the Loan Agreement and other related documents.
The Company shall release all securities on repayment of its full 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 its borrowers. 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.

Release of Securities

The Company shall release securities on repayment of all dues including interest and charges subject to any legitimate right or General lien for any other claim that 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 policies and procedures for determining the interest rates and processing and other charges for various schemes formulated by the company. and It will be ensured that the borrowers are informed in transparent manner.
The Company shall, at all the times ensure that the interest rate and other charges, on loans are in strict adherence to internal policies of the company.
The changes in the Interest Rates and policies shall be published in the website and updated whenever there is change.
The rates of interest and the approach for gradation of risk shall also be made available on the website.
Interest rate slab are meant to encourage timely interest payment, levying of additional interest for discouraging loans from crossing the permitted and agreed period. This shall be mentioned clearly in the loan agreement.
No Pre-payment penalties/ foreclosure charges will be levied on gold loans in the normal course. In case such charges are applicable for any scheme, it will be disclosed in the sanction letter.

Storage of Securities, Insurance Etc...

All branches shall have proper storage facility in either Strong Room or Safes conforming to Standards prescribed to store the jewelry in safe custody. The sets of keys to the security room/ safe room & the safe vault shall be held separately by two top management officials and the operations thereof shall be done jointly by the joint custodians. The staff shall be imparted training on a continuous basis to ensure that the guidelines covering security issues are strictly adhered.
The jewelry accepted as collateral security shall be adequately and appropriately insured.
The cost of insurance of security bear by borrower.

Auction Process

In case of non-repayment, process of recovery process shall be initiated that shall be transparent and policy driven.
Prior notice at various stages of demand and default basing on decided terms of repayment will be given/issued to borrower before the auction.
The auction process shall ensure that an arm’s length relationship in all transactions during the auction is maintained including with group companies and related entities.
The details regarding procedure for auction shall be disclosed in the loan document for availing the loan. The auction will be only through auctioneers approved by the Board and the Company shall not participate in the auction.
The auction shall be announced to the public by issuing advertisements in at least two newspapers, one in vernacular language and the other in a national daily Hindi/English newspaper.

Confidentiality

Unless authorized by the borrower, the Company will treat all personal information as private and confidential.
The Company may not reveal transaction details of the borrowers to any other persons except under following circumstances:
1. If the Company is required to provide the information as per regulatory directives to any statutory or regulatory body or bodies.
2. If arising out of a duty to the public to reveal the information.
3. If it is in the interest of the borrowers to provide such information (eg. Fraud prevention).
4. If the borrower has authorized the Company to provide such information to its group/ associates/ entities or Companies or any such person/ entity as specifically agreed upon.

Grievance Redressal Mechanism

Towards ensuring effective redressal of disputes arising out of actions or decisions of the functionaries of the Company, the following mechanism is put in place:
The complaints involving official below the Branch Manager shall be heard and disposed of by the Branch Manager. If required Area Manager shall intervene for better redressal.
Complaints against Branch Managers shall be heard and disposed of by the Area Manager.
If not satisfied with the decision of Area Manager) matter will be heard by GM(O) and if remains un-resolved the matter will be referred to Grievance Redressal officer at HO.
Customer Grievances Redressal Committee at the Company’s Head Office will be headed by CEO.
The contact details of the Grievance Redressal Officer of Reserve Bank of India shall be displayed in all the Branches for the benefit of customers. If the complaint/ dispute is not redressed within a period of one month, the customer will have the option to appeal to the Officer-in-Charge of the Regional Office of DNBS RBI as per the contact details displayed in the branch.
Proper training shall be imparted to staff on an ongoing basis with a view to improving staff behavior and customer service.
The compliance of the fair practices code shall be reviewed by the CEO on a half yearly basis and a consolidated report of such reviews shall be placed before the Board of Directors on half yearly basis.
Fraud in the functioning of the Company shall be enquired into by the appropriate authority and suitable punitive measure and necessary action as required by the law shall be taken by the appropriate disciplinary authority.

General Provisions

The Company shall refrain from interfering in the affairs of the borrower except for the purposes provided in the terms and conditions of the letter of undertaking (unless new information, not earlier disclosed by the borrower, has come to the notice of the Company).
In the matter of recovery of loans, the Company shall not resort to undue harassment viz. calling the borrowers at odd hours, use of muscle power for recovery of loans etc. The staff of the Company shall be adequately trained in this regard.
The Company will call delinquent customers between 0900 hrs to 1800 hrs unless special circumstances of the borrower’s business require to call them otherwise outside the hours mentioned.
In case of receipt of request from the borrower for transfer of borrower account, the consent or otherwise – i.e., objection of the Company, if any – shall be conveyed to the borrower within 21 days from the date of receipt of any request. Such transfer shall be as per transparent contractual terms in consonance with law.