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Fair Practices Code

1. Introduction

The Reserve Bank of India (“RBI”) has issued (a) the ‘Guidelines on Fair Practices Code for Non-Banking Financial Companies’ vide notification RBI / 2006-07 /138 DNBS (PD) CC No. 80 / 03.10.042 / 2005-06 dated September 28, 2006; and (b) a Master Circular on Fair Practices Code vide circular RBI/2014-15/34 DNBS (PD) CC No.388/03.10.042/2014-15 dated July 01, 2014, consolidating all instructions issued on this topic; (hereinafter collectively referred to as the “Guidelines”).
The Guidelines prescribe certain standards to be adhered to by non-banking financial companies (“NBFCs”) while engaging in the business of lending and dealing with customers.
Rajeev Trading & Holdings Pvt. Ltd(the “Company”) has formulated this Fair Practices Code (“Code”) in conformity with the above mentioned Guidelines and is committed to ensuring effective implementation of the provisions of this Code. This Code shall be updated based on further guidelines, as may be issued by the RBI.

2. Objectives And Applicability Of The Code

(i) This Code has been formulated to achieve the following objectives:

To promote fair practices by setting out minimum standards to be adhered to by the Company while engaging in the business of lending and dealing with customers.
To increase transparency in the lending process to enable customers to gain a better understanding of the nature and scope of services that may be expected from the Company.
To foster customer confidence in the Company.

(ii) This Code applies to all products offered by the Company during the course of its business.

3. Application For Loan And Their Processing

The Company shall strive to ensure that:

All communications from the Company to the borrower shall, if so requested by the borrower, be in the vernacular language or a language as understood by the borrower.
The loan application form of the Company includes 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 the borrower.
The loan application form clearly indicates the list of documents required to be submitted along with the application form.
The Company provides an acknowledgment of receipt of the loan application to the borrower and indicates a tentative time frame within which the loan application is expected to be processed / disposed.

4. Loan Appraisal And Terms/Conditions

The Company will convey in writing (including via electronic means like email) to the borrower (in the vernacular language or a language as understood by the borrower, if so requested by the borrower) by means of a sanction letter or otherwise, the amount of loan sanctioned along with the terms and conditions, including annualized rate of interest and method of application thereof. The Company will keep the acceptance of these terms and conditions by the borrower, on its record.
The Company understands and acknowledges that in certain cases, the borrower may not be fully aware of the terms and conditions of the loan, including rate of interest, at the time of sanction of the loan. Therefore, the Company shall furnish a copy of the loan agreement as understood by the borrower along with a copy each of all enclosures quoted in the loan agreement to each borrower at the time of sanction / disbursement of loan.

5. Disbursement Of Loan, Changes In Terms/Conditions

The Company shall provide notice to the borrower (in the vernacular language or a language as understood by the borrower, if so requested by the borrower) of any changes to the terms and conditions of the loan, including but not limited to the (a) disbursement schedule; (b) interest rates; (c) service charges; and (d) prepayment charges. Changes to the interest rates and charges shall be made effective only prospectively and such a condition shall be included in the loan agreement.
Any decisions taken by the Company to recall or accelerate the payment under or performance of the agreement shall be in consonance with the loan agreement.
The Company will 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 that the Company may have against 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.

6. Regulation Of Excessive Interest Rates

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, the approach for gradations of risk and rationale for charging different rates 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 the Company. The information published in the website will be updated to reflect any changes in the rate of interest.
The rate of interest will be an annualized rate so that the borrower is aware of the exact rates that would be charged to the account.
The annualized interest rate (excluding processing fees) will not exceed 36%. To ensure that the total cost borne by the customer is also not excessive, processing fees will also be capped. Processing fees charged by Company shall not exceed 3% of the loan amount. Company will also ensure that if any service provider is charging processing fees to the customer, the total fees charged to the customer (including processing fees charged by Company) shall not exceed 3% of the loan amount.

7. Other General Provisions

Company shall refrain from interference in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement (unless new and relevant information, not earlier disclosed by the borrower to the Company, has come to the notice of the Company).
In the event that the Company receives a request from the borrower for transfer of the borrowal account, the Company shall communicate its consent or objection to such request within 21 (twenty one) days from the date of receipt of such request. If consented to, such transfer shall be in accordance with the terms of the loan agreement and applicable law.
The Company shall not resort to undue harassment for recovery of loans. Undue harassment includes but is not limited to persistently bothering the borrower at odd hours, using muscle power, calling relatives or friends of borrowers, using unprofessional language for recovery of loans.
The Company shall ensure that its employees and staff members are adequately trained to deal with customers in an appropriate manner. Wherever assistance of third party service provider is taken for collections, company will ensure the following:

- Detailed code of conduct will be specified to the service provider

- Regular training sessions will be conducted by the Company for the service provider staff

- Regular monitoring of the service provider staff and their handling of customers will be done by the Company

In accordance with the RBI circular DNBS.CC.PD.No.320/03.10.01/2012-13 dated February 18, 2013, as a measure of customer protection and to bring about uniformity in the matter of prepayment of loans by borrowers of banks and NBFCs, the Company will not charge foreclosure charges or prepayment penalties on floating rate term loans sanctioned to individual borrowers.

8. Grievance Redressal Mechanism

(i) Details of the Grievance Redressal Officer who can be approached by the public for resolution of complaints against the Company are set out below:

Name of Grievance Redressal Officer : Souvik Chaterjee
Contact Number : +91-98309 78740
Email Address : operations@rtahnbfc.com

(ii) If the complaint / dispute is not redressed within a period of 1 (one) month from the date of receipt of the complaint by the Grievance Redressal Officer, the customer may file an appeal to the Officer-in-Charge of the Regional Office of DNBS of RBI, whose contact details are set out below:

Name of Officer : General Manager, Reserve Bank of India, Department of Non-Banking Supervision, Nrupatunga Road, Bangalore – 560 001, Karnataka
Contact Number : 080-2218 0100/ 1160
Email Address : dnbsbangalore@rbi.org.in

9. Responsibility of the board directors

The Board of Directors of the Company will undertake a periodical review of the compliance by the Company of this Code and the functioning of the grievance redressal mechanism at various levels of management within the Company. A consolidated report shall be submitted to the Board of Directors at quarterly intervals.