Fair Practices Code of the company
The Fair Practices Code for Si Creva Capital Services Pvt. Ltd. (NBFC) seeks to provide transparency and clarity to the NBFC’s borrowers with regard to their transactions with the Bank.
These guidelines relate only to the domestic lending business of Si Creva Capital Services Pvt. Ltd.
- Key Commitments
The Company makes the following key commitments to its customers:
a. The Company would act fairly and reasonably in all their dealings with customers by:
- Meeting the commitments and standards in this Code, for the products and services the Company would be offering and in the procedures and practices its staff would be following
- Making sure that Company’s products and services meet relevant laws and regulations
- Carrying out dealings with customers on ethical principles of integrity and transparency
b. The Company would help customers understand how company’s product would work by:
- Explaining their financial implications and
c. The Company would deal quickly and sympathetically with things that could go wrong by:
- Correcting mistakes quickly
- Handling customer’s complaints quickly
- Telling customers’ how to take their complaint forward with the RBI Ombudsman for NBFCs (details available on web-site), if they are still not satisfied
d. The Company would publicize this Code, put it on Company’s website and have copies available for customer on request.
The loan application forms would be comprehensive to include information about processing fees and other charges, fees refundable in the case of non-acceptance of application, pre-payment options and charges, if any, penalty for delayed repayments, if any, conversion charges for switching loan from fixed to floating rates or vice versa, existence of any interest reset clause and any other matter which affects the interest of the borrower. Further, such information would also be made available to the customer through the product information brochures and such other communication containing the product related features, in addition to being an integral part of the facility terms. The NBFC would also inform the all-in-cost to the customers.
A system would be devised, whereby acknowledgment for receipt of loan application forms would be given. The NBFC would ordinarily verify the loan applications received within 1 month from the date of receipt of loan applications. If additional details / documents are required, the NBFC would intimate the borrowers. The NBFC will convey in writing, the main reason(s) which led to the rejection of the loan application normally within 2 months from the date of receipt of loan applications.
The NBFC will ensure that there is proper assessment of credit requirement and creditworthiness of borrowers. Stipulation of margin and security will be based on due diligence and creditworthiness of borrowers in line with extant Credit Policy of the NBFC. The methodologies for assessment have been detailed in various policy/ product notes of the NBFC. The assessment will be based on all credit related and such other information, as may be called for/collected by the NBFC.
The NBFC would convey to the borrower the credit limit and details of facilities along with the terms and conditions thereof and keep the borrower’s acceptance on record. Terms and conditions and other caveats governing credit facilities given by the NBFC, would be reduced in writing between the NBFC and the borrower and communicated to the borrower, under the signatures of authorized official. A copy of the facility terms along with related documents would be furnished to the borrower.
As far as possible, the facility terms will stipulate terms & conditions relating to the credit facilities that are solely at the discretion of the NBFC. These may include approval or disallowance of facilities, such as drawings beyond the sanctioned limits,
honouring cheques issued for the purpose other than specifically agreed to in the credit sanction and disallowing drawing on a borrower account on its classification as a non-performing asset or in the event of default or on account of non-compliance with the terms of sanction. The NBFC would not have an obligation to meet further requirements of the borrowers on account of growth in business etc. without proper review of credit limits.
In case of lending under consortium arrangement where the NBFC is a participant, the NBFC would endeavor to complete appraisal of proposals in a time bound manner to the extent feasible and communicate to the client the decision on financing or rejection of the proposal within a reasonable time.
The NBFC will ensure timely disbursement of loans sanctioned in conformity with the terms and conditions governing such sanction.
The NBFC will give notice of any change in the terms and conditions including interest rates, service charges etc. The NBFC would ensure that changes in interest rates and charges are effected only prospectively (unless otherwise required by regulation/law).
The post disbursement supervision by lenders, particularly in respect of loans up to Rs. 0.2 million would be constructive with a view to taking care of any “lender- related” genuine difficulty that the borrower may face. Inappropriate occasions such as bereavement in the family or events of similar nature will require being avoided for making calls or visits.
Before taking decision to recall / accelerate payment or performance under the facility terms or seeking additional securities, the NBFC would give notice to borrowers, as specified in the facility terms or a reasonable period if no such condition exists in facility terms (unless the security is in jeopardy).
The NBFC would release all securities on receiving payment of loan or realization of loan subject to any legitimate right or lien for any other claim lenders may have against borrowers. If such right of set off is to be exercised, borrowers will be given notice about the same and the documents under which lenders are entitled to retain the securities.
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 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 rate of interest shall be annualized rates to make the borrower aware of the exact rates that would be charged to the account.
In case of receipt of request for transfer of borrower account, either from the borrower or from a bank, which proposes to take over the account, the consent or otherwise i.e. objection of the Bank, if any, would be conveyed within 21 days from the date of receipt of request.
The NBFC reserves the right to enforce security for recovery of dues in the form and manner and on the terms and conditions stipulated in the facility terms in case of default in payment or on the occurrence of any other event of default. In the matter of recovery of loans, the NBFC will not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of force for recovery of loans.
A grievance redressal mechanism within the organisation would be set up. It would comprise of Business Heads, Heads of Risk & Collections and Heads of Operations to resolve disputes arising in this regard.
There would be a periodical review of the compliance and functioning of the grievances redressal mechanism at various levels of management. A consolidated report of such reviews would be submitted to the Board at regular intervals.
The following information shall be displayed prominently, for the benefit of the customers, on the website and at all places of the Company where business is transacted:
i)The name and contact details (Telephone / Mobile nos. and also email address) of the Grievance Redressal Officer who can be approached for resolution of complaints against the Company
ii)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 Company falls.
Si Creva Capital Services Private Limited proposes to put its Base Rate of lending on its website. In order to ensure its standards of transparency, in conformity with the stipulations of the RBI’s directives, such interest rate policy is to be adopted by the Board. The policy is enumerated as under:-
Reserve Bank of India Vide its Notification No. DNBS. 204 / CGM (ASR)-2009 dated January 2, 2009 has directed that the Board of each NBFC shall approve an Interest rate model for the Company, taking in to account relevant factors such as cost of funds, margin and risk premium etc and determine the rate of interest to be charged for loans and advances.
Further, the directives states that the rate of interest and the approach for gradation of risk and the rationale for charging different rates of interest for different category of borrowers should be communicated to the borrowers / customers in the sanction letters to them. The Interest rate model is also required to be made available on the website of the Company so as to enable the customers to understand the logic and methodology of the lending rates charged to them. In compliance with the said RBI directives, the Interest rate model for the Company is given below:
Principles for determining interest rate for loans:
- Si Creva Capital Services Private Limited has its own model for arriving at base rates taking into consideration, among other things, Company’s weighted average cost of funds, un-allocable overheads and other administrative costs which is further adjusted for ALM mismatch. The weighted average cost of funds is computed taking into account the cost of Company’s aggregate borrowings at the month end time from various sources such as consortium and other bank lines, non-convertible debentures, commercial papers, etc.
- The said base rate would be reviewed in the Asset Liability Committee meeting and would periodically be published in the Company’s web site.
- The rate of interest for loans is arrived at through Company’s base rate model, cost on account of risk and tenor premium, operating cost and margin is added to arrive at the lending rate.
The final lending rate offered by Company would be arrived at after taking into account interest, credit and default risk, historical performance of similar clients, profile of the borrower, tenure of relationship with the borrower, repayment track record of the borrower in case of existing customer, subventions available, future potential and overall customer yield. Such information is gathered based on information provided by the borrower, credit reports, market intelligence and information gathered by field inspection of the borrower’s premises.
- The rate of interest for the same product and tenor availed during same period by different customers need not be standardized. It could vary for different customers depending upon consideration of any or combination of above factors.
- The interest re-set period would be decided by the company from time to time.
- Interest rates would be intimated to the customers at the time of sanction / availing of the loan and EMI apportionment towards interest and principal dues would be made available to the customer.
- The interest shall be deemed payable immediately on the due date as communicated and no grace period for payment of interest would be allowed.
- Besides normal interest, the company may levy additional / penal interest for delay or default in making payments of any dues. These additional or penal interests for different products or facilities would be decided by the respective business / product heads and communicated to the customers
- Changes in the interest rates and charges would be prospective in effect and intimation of change of interest or other charges would be communicated to customers in a mode and manner deemed fit.
- Besides interest, other financial charges like processing fees, origination fees, cheque bouncing charges, late payment charges, re-schedulement charges, pre-payment / foreclosure charges, part disbursement charges, cheque swap charges, security swap charges, charges for issue of statement account etc., would be levied by the company wherever considered necessary. Besides these charges, stamp duty, service tax and other cess would be collected at applicable rates from time to time. Any revision in these charges would be from prospective effect. These charges would be decided upon by respective business / product heads in consultation with Operations, Finance and Legal Heads.
- While deciding the charges, the practices followed by the competitors in the market would also be taken into consideration.
- Claims for refund or waiver of charges / penal interest / additional interest would normally not be entertained by the company and it is at the sole discretion of the company to deal with such requests.
Any revision in the Company’s base rate and the consequential interest rates applicable to business would be reviewed by the Asset Liability Committee and recommended to the CEO for approval.
Pursuant to any subsequent amendments or any statutory modifications or re-enactments in the above stated guidelines / norms / clarifications or in any other applicable acts / regulations, if there is any change in any of the parameter(s) framed by the Board, then the act / regulation will have overriding effect on the parameter(s).