The Reserve Bank of India has issued broad guidelines on fair practices for Non- Banking Financial Companies (NBFCs) thereby setting standards for fair business and corporate practices while dealing with their customers (Chapter IV, Section II of Master Direction DNBR.PD.008/03/10.11.119/2016-17 dated September 1, 2016)
IIFL Finance Ltd. (IIFL) shall adopt all the best practices prescribed by RBI from time to time and shall make appropriate modifications if any necessary to this code to confirm to the standard so prescribed.
- To promote good and fair practices by setting minimum standards in dealing with customers;
- To increase transparency so that the customer can have a better understanding of what they can reasonably expect of the services;
- To promote a fair and cordial relationship between customer and IIFL
This code shall apply to all employees of IIFL and other persons authorized to represent it in the course of its business, whether the products and services are provided across the counter, over the phone, by post, through interactive electronic device, on the internet or by any other method. This code will also be displayed on the notice board in all the branches and also on the website of the Company.
IIFL shall adhere to this code to act fairly and reasonably in all dealings, on the ethical principle of integrity and transparency, to meet the standard practices prevalent in the industry.
IIFL would provide clear information, without any ambiguity, to the customers in understanding:
- the products and services together with its terms and conditions including interest and service charges; and
- the benefits available to customer.
IIFL will deal quickly and sympathetically in attending to the customer's complaints in light of the objectives of this code.
IIFL shall treat all personal information of customers as private and confidential and shall not divulge any information to third person unless required by any law or Government authorities including Regulators or Credit agency or where the sharing of information is permitted by the customer.
IIFL would provide, on request, copy of the code to the borrowers.
IIFL shall not discriminate its customers on the basis of race, caste, gender, marital status, religion or disability. However the restrictions, if any, as mentioned in the loan products shall continue to apply.
IIFL shall refrain from interference in the affairs of the borrowers 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)
IIFL would provide information on interest rates, common fees and charges through:
- Putting up notices in branches.
- Through telephones or help lines.
- Through designated staff/help desk.
- Providing service guide/tariff schedule.
- Publishing on the website of the Company.
IIFL shall ensure that all advertising and promotional material is clear and not misleading. The Fair Practice Code shall also apply to sales associates / representatives of the company to the extent of their identification when they approach the customer for selling products personally. In case of any advertisement in any media and promotional literature that draws attention to a service/product and its interest rate, IIFL shall also provide the details of other fees or charges, if any.
IIFL would give information about customers to credit reference agencies on: -
- Opening of an account.
- The customer fallen behind with his/her payments and the performance of loan account which includes how much loan has been sanctioned and the subsequent performance
- Legal proceedings have been initiated against the customer to recover the dues.
- Debts settled through legal recourses against the customer
IIFL may give credit reference agencies other information about the customer's account if law requires it or the customer has given them his/her permission to do so.
IIFL shall explain the requirements of KYC guidelines to its customers and inform them about the documents required for establishing the identity of the customer before loan sanctioning, account opening and operation. IIFL shall also put the KYC requirements and filling up the same on the website of IIFL www.iifl.com for the benefits of the customers.
IIFL would obtain only such information to meet with company's KYC, Anti-Money Laundering or any other statutory requirements. In case any additional information is asked for, it will be sought separately and shall specify the objective of obtaining such additional information.
Applications for loans and its processing:
- All communications to the borrower shall be in the vernacular language or a language as understood by the borrower.
- Loan application forms issued by the Company shall 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 shall indicate the documents required to be submitted with the application form.
- The Company shall give acknowledgement for receipt of all loan applications. The time frame within which loan applications will be disposed would also be indicated in the acknowledgement. The Customer may contact the customer service team to obtain an update on the status of the application.
If IIFL cannot provide the loan to the customer, it shall communicate the same to the customer through its appointed representatives or directly to the customer verbally. In case customer requires the same in writing the reason(s) for rejection may be provided in writing.
Loan appraisal and terms and conditions:
- The Company shall convey in writing to the borrower in the vernacular language as understood by the borrower by means of sanction letter or otherwise, the amount of loan sanctioned along with the terms and conditions. The said letter shall include annualised rate of interest and method of application thereof. The Company shall keep the acceptance of these terms and conditions by the borrower on its record.
- The Company shall mention the penal interest charged for late repayment in bold in the loan agreement.
- A copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement would be furnished to all the borrowers at the time of sanction / disbursement of loans.
- The Company shall have a built in re-possession clause in the contract/loan agreement with the borrower which must be legally enforceable (in case of vehicle financing).
- The terms and conditions of the contract/loan agreement in case of vehicle financing shall also contain following provisions:
- Notice period before taking possession;
- Circumstances under which the notice period can be waived;
- Procedure for taking possession of the security;
- Provision regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the property;
- Procedure for giving repossession to the borrower; and
- Procedure for sale / auction of the property.
- The loan agreement for lending against gold shall disclose details regarding auction procedure. The Company shall follow transparent auction procedure in case of nonrepayment with adequate prior notice to the borrower. The auction shall be announced to the public by issue of advertisements in at least two newspapers, one in vernacular language and another in national daily newspaper,
Disbursement of loans including changes in terms and conditions:
- The Company would give notice to the borrower 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 should be incorporated in the loan agreement.
- Decision to recall / accelerate payment or performance under the agreement would be in consonance with the loan agreement.
- All the securities offered by the borrower shall be released on repayment of all dues or on realisation of the outstanding amount of loan subject to any legitimate right or lien for any other claim that the 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.
- 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 within 21 days from the date of receipt of request. Such transfer shall be as per transparent contractual terms in consonance with law.
- The Company shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loans sanctioned for purposes other than business to individual borrowers with or without co-obligant(s).
Whenever loans are given, IIFL would explain to the customer the repayment process by way of amount, tenure and periodicity of repayment. However if the customer does not adhere to repayment schedule, a defined process in accordance with the laws of the land shall be followed for recovery of dues. The process will involve reminding the customer by sending him/her notice or by making personal visits and / or repossession of security, if any. IIFL staff or any person authorized to represent the company in collection of dues or/and security repossession shall identify himself / herself and display the authority letter issued by the IIFL, and upon request display his/her identity card issued by the IIFL or under authority of the IIFL. IIFL shall provide the customers with all the information regarding overdue. IIFL shall not resort to undue harassment viz; persistently bothering the borrowers at odd hours, use muscle power for recovery of loans etc. and also ensure that the staff are adequately trained to deal with the customers in an appropriate manner
During visits to customer's place by the person authorized by IIFL for dues collection or/and security possession/repossession the following guidelines shall be followed:
- Customer would be contacted ordinarily at the place of his / her choice absence of any specified place at the place of his / her residence and if at his / her residence, at the place of business / occupation.
- Identity and authority to represent the Company shall be made known at the first instance.
- Customer’s privacy should be respected.
- Interaction with the customer shall be in a civil manner.
- The Company representatives shall contact the customers between 07:00 hrs and 19:00 hrs unless the special circumstances of the customer’s business or occupation may otherwise so require.
- Time and number of calls and contents of conversation would be documented.
- All assistance should be given to resolve disputes or differences in a mutually acceptable and orderly manner.
- During visits to customer’s place for dues collection, decency and decorum shall be maintained.
IIFL shall inform the customer in the event of closure/shifting of its branch offices.
Customers should be able to access the Company through any of the following means:
- Walk in to the branches (as mentioned in Company brochure/website/any other leaflet)
- Telephone, fax, email id and website (as mentioned in Company brochure/website/any other leaflet)
IIFL would strive for customer satisfaction within the framework of law, adopted policies and procedures.
The Board of Directors of IIFL approved the appropriate grievance redressal mechanism within the organization. Such a mechanism ensure that all disputes arising out of the decisions of lending institutions' functionaries are heard and disposed of at least at the next higher level. The same is displayed on the website of the Company www.iifl.com and may be referred to for details pertaining to grievance redressal process and escalation matrix
The Board of Directors also provide for periodical review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management. A consolidated report of such reviews shall be submitted to the Board at regular intervals, as may be prescribed by it.
In accordance with RBI Circular RBI /2012-13 /416 DNBS.CC. PD. No. 320/03.10.01/2012-13 dt. February 18, 2013 The company shall display the following information prominently, for the benefit of their customers, at their branches / places where business is transacted:
- the name and contact details (Telephone / Mobile nos. as also email address) of the Grievance Redressal Officer/Nodal officer and Ombudsman who can be approached by the public for resolution of complaints against the Company.
- 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 (with complete contact details), under whose jurisdiction the registered office of the applicable NBFC falls
As per RBI Circular DNBR. PD.CC. No. 090/03.10.001/2017-18 dated November 09, 2017, IIFL existing Grievance Redressal Machinery will also deal with the complaints relating to services provided by the Outsourced agency.
Further in accordance with Ombudsman Scheme for Non –Banking Financial Companies, 2018 Company shall also appoint Nodal officer /Principal Nodal Officer in accordance with the direction prescribed thereunder and will display on its website and its branches or places where business is transacted the name and contact details of the Ombudsmen who can be approached for resolution of complaints against the Company.
To ensure that the customers are not charged excessive interest rates and charges on loans and advances by the Company, the Board of the Company has adopted a Policy on Interest Rate Model and Policies & Procedures on Determining Interest Rates. The same has been put up on the Company’s website www.iifl.com.
While lending to individuals against gold jewellery, IIFL shall adopt the following in addition to the general directions as above.
- IIFL shall put in place Board approved policy for lending against gold that shall inter alia, cover the following:
- Adequate steps to ensure that the KYC guidelines stipulated by the RBI are complied with and to ensure that adequate due diligence is carried out on the customer before extending any loan,
- Proper assaying procedure for the jewellery received,
- Internal systems to satisfy ownership of the gold jewellery,
- 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 that the procedures are strictly adhered to. Normally, such loans shall not be extended by branches that do not have appropriate facility for storage of the jewellery,
- The jewellery accepted as collateral shall be appropriately insured,
- Transparent auction procedure in case of non-repayment with adequate prior notice to the borrower. There shall be no conflict of interest and the auction process must ensure that there is arm’s length relationship in all transactions during the auction including with group companies and related entities,
- The auction shall be announced to the public by issue of advertisements in at least two newspapers, one in vernacular and another in national daily newspaper,
- As a policy, IIFL themselves shall not participate in the auctions held,
- Gold pledged shall be auctioned only through auctioneers approved by the Board
- The policy shall also cover systems and procedures to be put in place for dealing with fraud including separation of duties of mobilization, execution and approval.
- The loan agreement shall also disclose details regarding auction procedure.
- Other Instructions
- IIFL will insist on a copy of the PAN Card of the borrower for all transaction above ₹ 5 lakhs.
- Documentation across all branches shall be standardized.
- IIFL shall not issue misleading advertisements like claiming the availability of loans in a matter of 2-3 minutes.
IIFL shall not discriminate in extending products and facilities including loan facilities to physically / visually challenged applicants on grounds of disability. All branches of IIFL shall render all possible assistance to such persons for availing of the various business facilities. IIFL 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 programs conducted for their employees at all levels. Further, IIFL shall ensure redressal of grievances of persons with disabilities under the Grievance Redressal Mechanism already set up.
IIFL reserves the right to amend /alter /modify the codes as mentioned herein above and provide updates from time to time, not affecting/sacrificing the underlining spirit of the code. Such alternation/amendments may be displayed at the notice boards of the branches /Corporate Office/ website of the Company for the benefit and information of the customer.