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Fair Practices Code of VLS Finance Ltd
Reserve Bank of
India
vide its Circular No. DNBS(PD)CC No. 80/03.10.042/2005-06
dated 20th September, 2006 had prescribed
broad guidelines on fair practices that are to be framed and
approved by the Board of Directors of all Non-Banking
Financial Companies. The fair practices code so framed and
approved by the Board of Directors of the Company needs to be
published and disseminated on the web-site of the Company for
the information of the public.
The following ‘Fair Practices Code of the Company’ was
approved by the Board of Directors of the Company in its
meeting held on 18/07/2007. Accordingly,
the Company shall adhere to the following Fair Practices Code
in its dealings with the Public.
(i) Applications
for loans and their processing
(a) The loan
application forms
of the Company 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
the borrower.
The loan
application form may indicate the documents required
to be submitted
with the application form.
(b) The Company
shall devise
a system
of giving
acknowledgement for
receipt of all
loan applications. Further, the time frame within which loan
applications is
likely to be
disposed of
shall also
be indicated
in the
acknowledgement.
(ii) Loan
appraisal and terms/conditions
The
Company shall convey
in writing
to the
borrower, by
means of
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 and
keep the
acceptance of
these terms
and conditions
by the
borrower on the Company’s record. Rejection of loan
applications with reasons thereof, shall also be communicated
to the applicants.
(iii) Disbursement
of loans including changes in terms and conditions
(a) The
Company shall
give notice
to its
borrowers of
any change
in the
terms and
conditions including
disbursement schedule,
interest rates,
service charges,
prepayment charges etc. The Company shall also
ensure that the
changes in
interest rates
and charges
are effected
only prospectively.
A suitable condition in this regard shall be
incorporated in the loan agreement.
(b) Any
decision to
recall /
accelerate payment
or performance
under the
agreement shall be in consonance
with the loan agreement.
(c) 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/s. 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.
(iv) General
(a) The
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 information,
not earlier disclosed by the borrower, has come to the notice
of the Company.
(b) In case
of receipt
of request
from the
borrower for
transfer of
borrowal 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 such
request. Such transfer shall be as per transparent contractual
terms in consonance with law.
(c) In the matter of
recovery of loans, the
Company shall not resort to undue harassment viz.
persistently bothering the borrowers at odd hours, use of
muscle power for recovery of loans, etc.
(v) The Company shall have a grievance redressal cell
consisting of Vice President (Credit-Operations), Company
Secretary and One Director from the Board to resolve disputes
arising in this regard. The said cell shall meet as and when
any grievance is received. The said cell shall periodically
apprise the Board of Directors of grievances received by it
and their disposal to enable the Board to review the
compliance of the Fair Practices Code and
functioning of
the grievances
redressal mechanism..
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