In compliance with the Reserve Bank of India’s guidelines for fair practices in lending and to ensure more transparency in respect of credit portfolio, the fair practices code policy is formulated as under, and will be effective from 01.07.2008:
The Fair Practices Code covers the following areas:
The policy is applicable to all loans and advances upto Rs.2.00 lakhs except loans and advances against gold jewellery/term deposits/Bank Guarantees against 100% cash margin/KVPs/NSCs.
The policy shall ensure:
a. The applicant is given, along with loan application, an annexure containing a list of various charges/fee viz. processing fee, legal opinion fee, stamping charges, insurance, penalty for prepayment, foreclosure charges, commitment charges, penal interest, share linking etc., expenses/fee that are refundable that enables the applicant to make a meaningful comparison with that of the other banks and take decision.
b. An acknowledgement for receipt of loan applications is given and the time within which the loan application is disposed off, is mentioned as under:
(Rs. In lakhs)
The above time frame is subject to
i. Submission of all relevant information & enclosures by the applicant ii. Receipt of legal opinion iii. Administrative exigencies
In case the loans/advances are falling within the powers of Officials at Head Office, then the branch will forward the application, complete with required information, to Head Office, within 3 days from the date of receipt of the application. A record of applications received and disposed, alongwith dates, is maintained and made available for inspection.
The above time frame is subject to -
i. Submission of all relevant information & enclosures by the applicant ii. Administrative exigencies
c. The loan application is verified and the applicant is informed about the additional requirements for processing the loan application either by the branch and/or Head Office as the case may be, within 3 days from the date of receipt of application.
The above time frame is subject to administrative exigencies
d. The reasons for rejecting the loan application are communicated to the borrower in writing within the time stipulated for disposal of application, on his approaching at branch.
a. The credit assessment is proper as based on the guidelines laid down in the credit policy as well as sound lending principles. Margin and security stipulation is not used as a substitute for due diligence on creditworthiness of the borrower.
b. All the terms and conditions and other caveats governing the credit facilities sanctioned is put in writing and given to the borrower after duly signed by the authorized official of the branch and an acknowledgement with signature, is obtained.
c. A copy of loan agreement along with copies of enclosures is furnished to the borrower and/or guarantor on specific request of the borrower.
d. The terms and conditions to the sanction will contain the under mentioned aspects (for CC limits):
- Drawings beyond sanctioned limits/DP fixed are not permitted without prior sanction. - Cheques issued for purposes other than specifically agreed to, are liable to be returned unpaid irrespective of balance available in the account. - The borrower will submit renewal proposal with required information atleast one month before the due date. - If limits are not renewed before due date, penal interest is charged at the rate as may be prescribed, over and above the applicable rate of interest, from the date of expiry of limit. - After expiry of three months from due date of renewal, issue of cheque books is liable to be stopped immediately. - Operations are not allowed in the account after expiry of 6 months from the date of validity and necessary action is initiated to recover our dues, unless otherwise permitted by Head Office. - Growth in business etc. will not automatically put the Bank under an obligation to meet further requirement of the borrower without proper review/assessment of credit limits.
a. All the loans and advances are disbursed in time, subject to compliance of terms and conditions to the sanction.
b. The information regarding change in terms and conditions including interest rates, service charges etc. are placed in the notice board in the main banking hall and also on web-site. If the change is likely to affect few borrowers or specific category of borrowers then they are informed in writing.
c. Changes in Interest rate and other charges are effected prospectively.
a. The post disbursement supervision is constructive with a view to taking care of “Lender related” genuine difficulty that the borrower may face.
b. Before taking decision to recall/accelerate payment under the agreement, procedure laid down in the Credit/Recovery policy is followed.
c. All the securities are released on receiving payment/ realization of loan subject to any legitimate right of lien/set-off that the bank may have against the borrower for any other claim.
d. In the event bank intends to exercise banker’s right of lien or set-off then the borrower is informed in writing detailing the remaining claims and the documents under which the bank is entitled to retain the securities till the relevant claim(s) is/are settled.
a. Subject to the terms and conditions of the sanction and to the extent of safeguarding its exposure, the bank will not interfere in the affairs of the borrower.
b. Bank is not discriminating on the grounds of sex, caste and religion in the matter of lending except to the extent laid down by the RBI for priority and weaker section lending.
c. For recoveries, to follow the procedure laid down in the Credit/Recovery policy.
d. In case of receipt of a request for transfer of loan a/c either from the borrower or from another bank, by way of take-over, the consent or objections of the bank, if any, is conveyed within a reasonable time and in any case not later than 21 days from the date of receipt of request.
e. The fair practices code will be reviewed at yearly intervals.
a. The 'Grievances Redressal Mechanism is as under:
On receipt of any complaint/grievance from the borrower in writing, either to the branch and/or to Head Office, the same is taken up for redressal within 3 days from the date of receipt of such complaint/grievance.
b. The functioning of grievance redressal mechanism and the consolidated report of grievances with action taken thereof is placed before the Managing Director at quarterly intervals and before the Board at half yearly intervals.
