NEDFi’s Fair Practices Code

Introduction

NEDFi’s Fair Practice Code (NFPC) for lending is adopted in conformity with RBI’s guideline and directives. The Code aims to provide fair lending practices in a transparent manner while dealing with customer. This Code provides the minimum set of standards to be followed while doing lending business. RBI’s guidelines / directives, that may be issued from time to time, will override the Code where applicable.

• This Code is called NEDFi’s Fair Practice Code for lending.
• This Code is made pursuant to the Directives of the Reserve Bank of India, vide Circular No. DBNS (PD) CC No. 286/03.10.042/2012-13 dated July 2, 2012.
• This Code is applicable to all the officers/staff of NEDFi.
• The Board of Directors of NEDFi may modify the Code from time to time.

Objectives

The main objectives of this Code, in dealing with Customer/Borrowers while lending, are:

• To set the minimum standard of services.
• To promote good and fair practices.
• To provide the services in a transparent manner.

Application  and Scope

The NEDFi’s Fair Practices Code (NFPC) applies to the following areas:

• Product and Service information
• Applications for loans and their processing
• Loan appraisal and terms/conditions
• Disbursement of loans including changes in terms and conditions
• Post disbursement monitoring and supervision
• Recovery of Loans/Possession of properties
• General Practice Code while Lending
• Language and mode of communicating Fair Practice Code
• Interest Charged by NEDFi

Product and Service Information

• The product information brochure would be made available to all the customers desiring to know about NEDFi products on lending. The brochure will contain information of the loan products like margin requirements, interest rate range, processing fees/charges, securities requirement, document requirement which will give provide basic knowledge to the customers.
• Customer would be given the necessary information adequately explaining the range of loan products available with NEDFi. Help customers to understand NEDFi’s loan products by giving information to customers in English and/or Hindi and/or local language and helping customer choose the one that meets customer needs.
• Customer would be explained the processes involved in sanction and disbursement of loan. Information regarding margin requirements, interest rate range, processing fees/charges, pre-payment options, securities requirement, document requirement, etc. shall be explained to the customer. In other words, we will disclose ‘all the cost’ inclusive of all charges involved in processing/sanction of loan application in a transparent manner. It shall also be ensured that such charges/fees are non-discriminatory.
• Customer would be informed of the concerned branch with their names and phone numbers whom he can contact for the purpose of loan.

Applications for loans and its processing

• NEDFi has loan application forms for the borrowers seeking assistance up to Rs. 10 lakh and microfinance. In respect of assistance/loans above Rs.10 lakh, borrowers shall be advised to submit the detailed project report and necessary documents along with their formal loan application letter.
• All particulars required for processing the loan application are expected to be submitted along with the loan application. Receipt of completed loan application will be duly acknowledged.
• NEDFi would verify the details on receipt of the loan application and additional details/ documents required from borrower would be duly intimated.
• All the loan applications will be disposed of within 30 days from the date of receipt of complete information / supporting documents from the applicant.
• In case of rejection of the loan application, NEDFi shall convey in writing, the main reason/ reasons which in the opinion of NEDFi after due consideration, have led to rejection of the loan applications.

Loan appraisal and terms/conditions

• NEDFi will undertake / exercise appropriate due diligence on all the loan appraisals based on risk appetite of NEDFi and suitable margin/rate/securities will be stipulated based on such risk assessment and NEDFi’s extant guidelines.
• NEDFi shall convey in writing to the borrower by means of letter of sanction (in a language understood by the promoter) along with the terms and conditions including annualised interest rate and other charges, method of application, prepayment charges and shall keep the borrower’s written acceptance of these terms and conditions given with his full knowledge on record.
• Copy of loan covenants, along with a copy of all relevant enclosures will be made available to the borrower. Standard sanction letter would include instances of approval, disallowance, etc. and NEDFi shall be under no legal obligations to consider increase/additional limits/facilities without proper review/assessment.

Disbursement of loans including changes in terms and conditions

• NEDFi would ensure timely disbursement of loans sanctioned in conformity with the terms and conditions including execution of loan covenants governing such sanction.
• The disbursal of credit facility shall be solely at the discretion of the NEDFi and NEDFi may disallow drawing of credit facility on its classification as a non performing asset or on account of non-compliance with the terms of sanction or loan covenant.
• Any change in terms and conditions, including interest rate and other charges / levies will be informed individually to the borrowers in case of account specific changes and in case of others by Public Notice/NEDFi’s website from time to time.
• NEDFi would also ensure that changes in interest rates and charges are levied on disbursements only with prospective effect.
• Consequent upon such changes any supplemental deeds / documents or writings are required to be executed, the same shall also be advised. Further, availability of facility will be subject to execution of such deeds / documents or writings.

Post Disbursement Supervision

• Post disbursement supervision by NEDFi would be constructive with a view to taking care of any genuine difficulties that the borrower may face.
• Decision to recall/accelerate payment or performance under the covenant or seeking additional securities NEDFi would be in accordance with the loan covenant.
• NEDFi 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 NEDFi 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 NEDFi is entitled to retain the securities till the relevant claim is settled /paid.

Recovery Of Loans/Possession Of Mortgaged Properties

• The loan recovery shall be governed by the provisions of the terms of sanctions / loan covenant as well as standard procedures as followed by all India FIs/Banks.
• In the matter of recovery of loans, NEDFi shall not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc.
• Possession of Mortgaged properties shall be governed by the provisions of the terms of sanctions / loan covenant as well as standard procedures as followed by all India FIs/Banks under various Acts/procedures, as may be prescribed by it.

Regulation Of Interest Charged By NEDFi

• The Board of NEDFi has adopted the interest rate model where the interest rate to be charged would be determined by the PLR of the Corporation plus the specified spread limit. The interest to be charged would to be decided by the Sanctioning Committee at the time of sanction on the basis of credit worthiness and risk assessment. The rate of interest charged is shown in the annualised rates and shall be communicated explicitly in the detailed letter of sanction. The penal and additional interest to be charged on commitment of default and other charges shall also be mentioned in the letter of sanction.
• The rates of interest shall be made available on the web-site of the corporation or published in the relevant newspapers. The information published in the website or otherwise published should be updated whenever there is a change in the rates of interest.

Language And Mode Of Communicating Fair Practice Code

Fair Practices Code based on RBI guidelines is made available in English or in a vernacular language as may be required.

General Practice Code While Lending

• Act fairly and reasonably in all dealings with the customers by meeting the commitments and standards in this Code for the loan products and services of NEDFi and will rest on ethical principles of integrity and transparency.
• NEDFi would restrain from interference in the affairs of the borrower except for what is provided in the terms and conditions of sanction / Loan covenant (unless new information, not earlier disclosed by the borrower, has come to the notice of NEDFi as lender). However this does not imply that NEDFi’s right to elicit necessary information from the borrower and initiate action to safeguard NEDFi’s interest, recovery and enforcement of security under Law as well as appointment of nominee directors, where required, is affected by this commitment.
• NEDFi will not discriminate on the grounds of gender, caste or religion in its lending policy and activity. However, this does not preclude NEDFi from participating in credit scheme framed for weaker sections of the society.
• In case of request for transfer of borrowal accounts, either from the borrower or from a Bank/Financial Institution, NEDFi’s consent or otherwise shall be conveyed within 21 days from the date of receipt of request and such transfer shall be as per transparent contractual terms in consonance with law.

Responsibility Of The Board Of Directors

The Board of Directors of NEDFi shall be informed for taking periodical review of the compliance of the Fair Practice Code and the functioning of the Grievances Redressal Mechanism. A consolidated report shall be placed to the Board of Directors at half yearly intervals or as may be prescribed by it.

Grievance Redressal Mechanism

To provide fair and transparent solution to the grievances of the customers / borrowers, NEDFi has adopted the following means to collect the grievances of the customers / borrowers in all the offices of NEDFi.

• A complaint / suggestion box is placed in the front lobby where the customer / borrowers can submit their feedback / grievances.
• A complaint book is maintained at the reception desk where the customer / borrowers can submit their feedback / grievances.
• Online grievances section is maintained in NEDFi’s web site where the customer / borrowers can submit their feedback / grievances.
• Credit applicants / borrowers are also welcome to give in writing, their grievance, together with supporting documents to the nodal officer of NEDFi for Grievance Redressal.
• The Nodal Officer shall collect all the feedback, grievances and the matters to be brought before the Grievance Redressal Committee within 14 days from the date of receipt.
• The Grievance Redressal Committee shall meet every fortnight to resolve the grievance. A reply to the grievance will be addressed within a period of 30 days from the date of receipt of the grievance letter. Complaints received which will require some time for examination of issues involved will be duly acknowledged.
• The Grievance Redressal Committee shall submit compliance report to the CMD once every month for review. A consolidated report shall be placed to the Board of NEDFi on the compliances at half yearly intervals.
• The committee will consider unresolved complaints / grievances referred to it by the Branch Offices for speedy redressal.
• Where the Committee cannot resolve on its own, the committee shall ensure that all the grievances are heard and disposed of at least at the next higher level of authority.

The Nodal Officer of the Grievance Redressal Committee can be contacted at under:

Smt. Jumita Saikia, Asst. General Manager [PR],

North Eastern Development Finance Corporation Limited (NEDFi),

NEDFi House, G. S. Road, Dispur
Guwahati, Assam. PIN -781006

Tel  :  +91-361 222 2200  (Extn – 235) 
Fax :  +91-361 223 7733, 7734

Email: grievances@nedfi.com