Fare Practice Code

Developed on the basis of the guidelines issued by the Reserve Bank of India vide their circular DNBS.CC.PD.No.266 dated 26.03.2012 and RBI/2012-2013/416 DNBS.CC.PD.No. 320/03.10.01/2012-13 dated February 18, 2013. Further revised Fair Practice Code in terms of circular DNBS (PD) CC. NO. 340/03.10.042/2013.14 dated 01.07.2013.

Fair Practice Code (“FPC” or “Code”) has been amended pursuant to the Master Direction – Reserve Bank of India (Non-Banking Financial Company–Scale Based Regulation) Directions, 2023

Duly adopted by the Board of Directors of the Company in the meeting held on 01.02.2024.

FAIR PRACTICE CODE

INTRODUCTION
SINGH FINLEASE PRIVATE LIMITED (“Company” ) is a non-deposit taking  non systemically important NBFC  now as per amended Direction BASE LAYER NBFC-BL-BASE LAYER providing loans  to individuals , firms, corporate secured and unsecured . The organization endeavors to review and follow the policy guidelines laid down by RBI to set up fair business practices while dealing with its customers. Accordingly, this Fair Practice Code (“FPC” or “Code”) has been amended pursuant to the Master Direction – Reserve Bank of India (Non-Banking Financial Company–Scale Based Regulation) Directions, 2023

Hence, in compliance with the said directions, this Code has been framed, approved and reviewed by Board of the Company from time to time. The Company shall at all times adopt best business and customer service practices from time to time and make appropriate modifications, as necessary to this Code.

OBJECTIVE

• Promote good, fair and trustworthy practices in dealing with the customers;
• Greater transparency to enable the customers to have a better understanding of Product and what they can reasonably expect of the services.
• Promote a fair and cordial relationship between the customers and the Company.

GUIDELINES ON FAIR PRACTICE CODE FOR NBFC’S

•  APPLICATION FOR LOANS AND THEIR PROCESSING :

• All communication to the borrower shall be in vernacular language as understood by Borrower.

b)  Application Form for loans will 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 borrower.
c)   All the terms and conditions for loans should be detailed in the application form itself. The loan application form will indicate the documents required to be submitted for processing the application.
d) The Company will issue acknowledgement for receipt of all loan applications.

2.  LOAN APPRAISAL AND TERMS AND CONDITIONS :

• The Company will inform in writing to the borrower in vernacular language as understood by borrower, the outcome of Loan Application by means of a sanction letter or otherwise The sanction letter shall contain the amount of loan sanctioned, the terms and conditions including annualized rate of interest, processing fee (if any), date of interest payments due, penal interest charges, loan tenure, repayment schedule, commencement date and method of application thereof etc.

b)   The Company shall keep record of customer acceptance of all these terms and conditions.
c)   Penal Interest /Overdue Interest for late repayment shall be mentioned in sanction letter / loan agreement in bold so as to draw attention of the borrower.

•   Company will invariable furnish a copy of Loan Agreement along with copy of each enclosures quoted in the Loan Agreement to its borrower at the time of sanction /disbursement of Loan.

• PENAL CHARGES IN LOAN ACCOUNTS:

• Penalty, if charged, for non-compliance of material terms and conditions of loan contract by the borrower shall be treated as ‘penal charges’ and shall not be levied in the form of ‘penal interest’ that is added to the rate of interest charged on the advances. There shall be no capitalisation of penal charges i.e., no further interest computed on such charges. However, this will not affect the normal procedures for compounding of interest in the loan account.
• The Company shall not introduce any additional component to the rate of interest and company will ensure compliance to these guidelines in both letter and spirit.
• The Company shall update the existing board approved interest rate policy on penal charges or similar charges on loans.
• The quantum of penal charges shall be reasonable and commensurate with the non-compliance of material terms and conditions of loan contract without being discriminatory within a particular loan / product category.
• The penal charges in case of loans sanctioned to ‘individual borrowers, for purposes other than business’, shall not be higher than the penal charges applicable to non-individual borrowers for similar non-compliance of material terms and conditions.
• The quantum and reason for penal charges shall be clearly disclosed by the Company to the customers in the loan agreement and most important terms & conditions / Key Fact Statement (KFS) as applicable, in addition to being displayed on Company’s website under Interest rates and Service Charges.
• Whenever reminders for non-compliance of material terms and conditions of loan are sent to borrowers, the applicable penal charges shall be communicated. Further, any instance of levy of penal charges and the reason therefor shall also be communicated.
• This paragraph 7 (1) to 7 (8) shall come into effect from January 01, 2024. The Company shall carry out appropriate revisions in the policy framework and ensure implementation of the instructions in respect of all the fresh loans availed/ renewed from the effective date. In the case of existing loans, the switchover to new penal charges regime shall be ensured on next review or renewal date or six months from the effective date of these instructions, whichever is earlier.

• DISBURSEMENT OF LOANS INCLUDING CHANGES IN TERMS AND CONDITIONS :

a)   The Company will give notice to the borrower in vernacular language as understood by borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges etc. Any change in interest rates and charges shall be effective only prospectively.

• Any decision to recall / accelerate payment or performance under the agreement will be in consonance with the loan agreement.

•  RESPONSIBLE LENDING CONDUCT – RELEASE OF MOVABLE/IMMOVABLE PROPERTY DOCUMENTS ON REPAYMENT/ SETTLEMENT OF PERSONAL LOANS

The Company shall adopt best practices in release of movable/ immovable property documents upon receiving full repayment and closure of loan account to avoid customer grievances and disputes in future.
To address the issues faced by the borrowers and towards promoting responsible lending, the following instructions are issued:

• Release of movable/immovable property documents:
• The Company shall release all the original movable / immovable property documents and remove charges registered with any registry within a period of 30 days from the date of full repayment/settlement of the loan account.
• The borrower shall be given the option of collecting the original movable/ immovable property documents either from the banking outlet/branch where the loan account was serviced or any other office of the Company where the documents are available, as per her/his preference.
• The timeline and place of return of original movable/immovable property documents shall be mentioned in the loan sanction letters issued on or after the effective date.
• In order to address the contingent event of demise of the sole borrower or joint borrowers, NBFCs shall have a well laid out procedure for return of original movable/immovable property documents to the legal heirs. Such procedure shall be displayed on the website of NBFCs along with other similar policies and procedures for customer information.

• Compensation for delay in release of movable/immovable   property documents:
• In case of delay in releasing of original movable/immovable property documents or failing to file charge satisfaction form with relevant registry beyond 30 days from the date of full repayment/ settlement of loan, the Company shall communicate to the borrower reasons for such delay. In case where the delay is attributable to the Company, it shall compensate the borrower at the rate of ₹5,000 for each day of delay.
• In case of loss/damage to original movable/immovable property documents, either in part or in full, the Company shall assist the borrower in obtaining duplicate/certified copies of the movable/immovable property documents and shall bear the associated costs, in addition to paying compensation as indicated at clause (ii) above. However, in such cases, an additional time of 30 days will be available to the NBFCs to complete this procedure and the delayed period penalty will be calculated thereafter (i.e., after a total period of 60 days).
• The compensation provided under these directions shall be without prejudice to the rights of a borrower to get any other compensation as per any applicable law.

• Applicability:

The instructions in paragraph B above shall be applicable to all cases where release of original movable/immovable property documents falls due on or after December 01, 2023

• RESET OF FLOATING INTEREST RATE ON EQUATED MONTHLY INSTALMENTS (EMI) BASED PERSONAL LOANS

 The company shall consider the repayment capacity of the borrowers at the time of sanction of EMI based floating rate Education loans to ensure that there is adequate headroom / margin is available for elongation
of tenor and/ or increase in EMI, in the scenario of possible increase in the interest rates during the tenor of the loan.
The Company has put in place an appropriate policy framework to meet the following requirements for implementation and compliance:

• At the time of sanction, the Company shall clearly communicate to the borrowers about

the possible impact of change in interest rate on the loan leading to changes in EMI and/or tenor or both. Subsequently, any increase in the EMI/ tenor or both on account of the above shall be communicated to the   borrower immediately through appropriate channels.

• At the time of reset of interest rates, the company shall provide the option to the borrowers to switch over to a fixed rate as per their Board approved policy. The policy, inter alia, may also specify the number of times a borrower will be allowed to switch during the tenor of the loan.
• The borrowers shall also be given the choice to opt for (a) enhancement in EMI or elongation of tenor or for a combination of both options; and (b) to prepay, either in part or in full, at any point during the tenor of the loan. Levy of foreclosure charges/pre-payment penalty shall be subject to extant instructions.
• All applicable charges for switching of loans from floating to fixed rate and any other service charges/ administrative costs incidental to the exercise of the above options shall be transparently disclosed in the sanction letter and also at the time of revision of such charges/ costs by the Company from time to time.
• The Company shall ensure that the elongation of tenor in case of floating rate loan does not result in negative amortisation.
• The Company shall share / make accessible to the borrowers, through appropriate channels, a statement at the end of each quarter which shall at the minimum, enumerate the principal and interest recovered till date, EMI amount, number of EMIs left and annualized rate of interest / Annual Percentage Rate (APR) for the entire tenor of the loan. The Company shall ensure that the statements are simple and easily understood by the borrower.
• Apart from the equated monthly instalment loans, these instructions would also apply, mutatis mutandis, to all equated instalment-based loans of different periodicities.
• The Company shall ensure that the above instructions are extended to the existing as well as new loans suitably by December 31, 2023. All existing borrowers shall be sent a communication, through appropriate channels, intimating the options available to them.

• GENERAL :

• The Company will not interfere 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 come to the notice of the lender)

b) In case of receipt of request from the borrower for transfer of borrowing account, the consent or otherwise i.e. objection of the Company, if any, should 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.

c) In the matter of recovery of loans, the Company will not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc.

d) Proper training shall be given to the personnel who are dealing with borrowers in regard to loan application/disbursement, so that they deal with customer/borrower in an appropriate manner.

e) The company will not discriminate loan application based on grounds of sex, caste and religion.

• RESPONSIBILITY OF BOARD IF DIRECTORS:
• A appropriate grievance redressal mechanism shall be formed within the Organization to resolve disputes, arising out of the Loan functionaries. Any such dispute shall be heard and disposed off at next higher level.

• The board of Directors of the company shall have periodic review of the compliance of the Fair Practice Code and the functioning of the Grievance Redressal mechanism at various level of management. A consolidated review report, if any, should be placed before the board at regular intervals.

Grievance redressal mechanism :

The company should display the following information at its branch/place where business is transacted for the benefit of its customers.

Grievance Redressal Officer:
Registered Office   : A-29, MANGOLPURI INDUSTRIAL AREA
PHASE II, DELHI – 110 034
Name                   :RACHIT CHAWLA
Designation         : DIRECTOR
Telephone No.       :
Email id               : singhfinleasepvtltd@gmail.com
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 Officer of DNBS of the Reserve Bank of India, 6, Sansad Marg, New Delhi-110001. (www.rbi.org.in)

OMBUDSMAN FOR NBFCS

Under the Reserve Bank – Integrated Ombudsman Scheme, 2021, the Company has appointed Principal Nodal Officer. Details of the same are available on the website of the Company under Ombudsman Scheme tab

• Language & Mode of communicating Fair Practice Code

The Fair Practice Code shall be in the vernacular language/ English language as understood by the borrower. The Fair Practice Code will be available at the registered office of the company for the information of its borrower & other stakeholders. Any changes in this code in near future shall be updated from time to time.

11. REGULATION OF EXCESSIVE INTEREST CHARGED BY THE COMPANY:

a) The company has adopted an interest rate model taking into account cost of funds, margin and risk premium for determining rate of interest to be charged for loans and advances.

b) The rate of interest to be charged depends much upon the gradation of the risk of the borrower viz. the financial strength, business, competition, past history of the borrower etc.

c) The rate of interest shall be annualized rate so that the borrower is aware of the exact rate that would be charged to the account. The said rate shall be disclosed to the borrower in application form and communicated explicitly in the sanction letter.

12.. COMPLAINT ABOUT EXCESSIVE INTEREST CHARGED BY THE   COMPANY:

The Board shall lay out appropriate internal principals & procedures in determining the interest rates and processing and other charges.
In this regard the guidelines indicated in the Fair Practice Code about transparency in respect of terms and conditions.
Rate of penal interest to be levied in case of default of repayment on due date & on dishonor of Cheque given by the borrower shall be mentioned in loan agreement in bold letters.

13.  REPOSSESSION OF VEHICLES FINANCED BY THE COMPANY:

The company has a built-in re-possession clause in the loan agreement with the customer which is legally enforceable. To ensure more transparency, the terms and conditions of the loan agreement contain provision 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.
• The procedure for giving repossession to the borrower and
• The procedure for sale/auction of the property.

14. LENDING AGAINST COLLATERAL OF GOLD JEWELLERY: -

At present, the company is not involved in such lending. While lending to individuals against gold jewellery, the company shall follow the specific fair practices as given below:

• KYC guidelines issued by RBI shall be complied with and to due diligence shall be carried out before extending any such loan.
• The company shall keep proper assaying procedure for the jewellery received.
• The company shall keep internal systems to satisfy ownership of the gold jewellery.
• The company shall arrange 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 the procedures are strictly adhere to.
• The company shall appropriate system of insurance of jewellery accepted as collateral.
• Auction of jewellery in case of non-payment shall be transparent and notice to the borrower shall be given 30 days before the auction date. No directors / employee / group company and related entities shall participate in the auction. Auction shall be conducted in the presence of at least two officials of the company with prior approval of the board in the presence of all persons intimated and present at the auction place as mentioned in the notice served before 30 days of auction.
• The auction shall be announced to the public by issue of advertisement in at least two newspapers, one in vernacular language and another in national daily newspaper.
• As per policy, the company shall not participate in the auction.
• Gold pledged shall be auctioned only auctioneers approved by the Board.
• The company shall put a system & procedure for dealing with fraud including separation of duties of mobilization, execution and approval.

The above-said procedure & system shall be approved by the Board before.

• LOAN FACILITIES TO THE PHYSICALLY/VISUALLY CHALLENGED:

The Company shall not discriminate in extending products and facilities including loan facilities to physically/visually challenged applicants on grounds of disability. All branches of the Company shall render all possible assistance to such persons for availing of the various business facilities. The Company shall include a suitable module containing the rights of persons with disabilities guaranteed to them by the law and international conventions, in all the training programmes conducted for their employees at all levels. Further, the Company shall ensure redressal of grievances of persons with disabilities under the Grievance Redressal Mechanism.