MAHESH BANK

The Fair Practices Code covers the following areas:

• Application for loans and their processing.
• Loan appraisal and terms/conditions.
• Disbursement of loans including changes in terms and conditions.
• Post disbursement supervision.
• Other general provisions.

The guidelines are applicable in respect of all the borrowers, irrespective of the quantum of credit facility being enjoyed by them.

A. Application for loans and their processing

a. The applicant will be given, along with loan application, an annexure containing a list of various charges/fee viz. processing fee and the period for which it is levied (in case of limits), valuation charges, legal opinion fee, stamping charges, insurance, penalty for prepayment, foreclosure charges, commitment charges (i.e. minimum level of limit utilisation, applicable rate of interest and period for which the limit utilisation is reckoned etc.), penal interest, share linking etc., expenses/fee that are refundable (alongwith a note that “all or any of the above charges are liable to change with/without prior notice”).

b. An acknowledgement for receipt of loan applications will be given and the time within which the loan application is disposed off, will be mentioned as under:

(Rs. In lakhs)

c. The loan application will be verified within a reasonable time and the applicant will be informed about the additional requirements for processing the loan application either by the branch and/or Head Office as the case may be.

d. The reasons for rejecting the loan application will be communicated to the borrower in writing within the time stipulated for disposal of application.

B. Loan appraisal and terms/conditions:

a. The credit assessment will be proper as based on the guidelines laid down in the credit policy as well as sound lending principles. Margin and security stipulation will not be used as a substitute for due diligence on creditworthiness of the borrower.

b. A copy of the terms and conditions to the sanction will be given to the borrower(s) and guarantor(s) and an acknowledgement, followed by signature, will be obtained as under:

“I have gone through the terms and conditions to the sanction and having fully understood and/ being explained about the same, I hereby accept the terms and conditions to the credit facility sanctioned to me/us”.

c. All the terms and conditions and other caveats governing the credit facilities sanctioned will be put in writing and given to the borrower after duly signed by the authorized official of the branch.

d. A copy of loan agreement along with copies of enclosures will be furnished to the borrower and/or guarantor on specific request of the borrower.

e. The terms and conditions to the sanction will contain the under mentioned aspects.

- Drawings beyond sanctioned limits/DP fixed will not be 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 will be charged @ 2% over and above the applicable rate of interest.
- After expiry of three months from due date of renewal, issue of cheque books will be stopped immediately.
- Operations will not be allowed in the account after expiry of 6 months from the date of validity and necessary action will be 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.

f. In case of lending under consortium arrangement, if the bank is participating then appraisal of proposal will be done within the time frame stipulated at Sno. Ab above.

C. Disbursement of loans including changes in terms and conditions.

a. All the loans and advances will be 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. will be placed in the notice board in the main banking hall and also in the web-site. If the change is likely to affect few borrowers or specific category of borrowers then they will be informed in writing.

c. Interest rate changes will be effected prospectively.

D. Post disbursement supervision:

a. The post disbursement supervision will take into account the genuine difficulties that the borrower might be facing in utilizing the funds for the purpose he borrowed.

b. Before taking decision to recall/accelerate payment under the agreement, procedure laid down in the Credit/Recovery policy will be followed.

c. All the securities will be 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 will be 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.

E. General :

a. The bank will restrain from interfering in the affairs of the borrower excluding to the extent provided in the terms and conditions to the sanction and to the extent of safeguarding its exposure.

b. Bank will not discriminate 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 bank will 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, will be conveyed within a reasonable time and in any case not later than 21 days from the date of receipt of request, unless the matter requires to be placed before the Loans Committee/Board in which case, the responding time depends upon the date of the meeting.

F. Grievance Redressal Mechanism:

a. The 'Grievances Redressal Mechanism is as under: