RBI Guidelines

Fair Practices Code Based on the Guidelines of Reserve Bank of India

 

Revised Fair Practices Code

KEY CORP LIMITED (“KCL” or the “Company”) falls under the category of NBFC as per the RBI directives and commits itself for implementing and adopting fair practices in all its activities and transactions with the stakeholders. The Company has adopted a code of conduct to promote good and fair practices by setting minimum standards in dealing with the clients and increasing transparency so that the clients have a better understanding of the services provided. The Company commits itself for implementing and adopting these fair practices in all its activities and transactions with its members while functioning as an NBFC.

1. Policy Statement

This policy sets minimum Fair Practice standards for the company to follow while processing, granting and disbursement of a loan, and the procedure to be followed thereafter.

2. The objectives of the policy are as follows:

  • Promote fair practices by setting minimum standards while dealing with customer.
  • Increase transparency so that customer can have a better understanding of what type of services, terms and conditions and service levels can be expected from the company.
  • Foster customer confidence through transparent dealing.
  • Comply with RBI directives in this regard.

3. Policy Background

RBI, vide its notification RBI / 2006-07 /138 DNBS (PD) CC No. 80 / 03.10.042 / 2005-06 dated September 28, 2006 and amendment issued vide notification No.DNBS.CC.PD.No.266/03.10.01/2011-12 dated 26th March 2012 and DNBS.CC.PD.NO.320/03.10.01/2012-13 Dated 18.02.2013 hasĀ  mandated framing of a Revised Fair Practice Code which has been approved by the Board of Directors of Key Corp Ltd. and published on the website. In compliance with the RBI directive, this Fair Practice Code is being framed.

4. Policy Requirements

Key Commitment

To help borrower / customer understand Company’s financial services by:

  • Ensuring that the customer is given clear information about Company’s services, the terms and conditions and interest rates/service charges, which apply to them. Keeping customer informed about changes in the interest rates, charges, terms and conditions, etc.
  • To act fairly and reasonably in all dealings with the customer by:
    • Meeting the commitments and standards in this policy for services offered by the Company.
    • Making sure that services meet relevant principles of integrity and transparency.
    • Handling customer complaints promptly.
    • To treat personal information of customers as private and confidential.
    • Wherever applicable, the documents (such as loan agreements and its annexures, sanction letter, term sheets, notices, etc.) that need to be signed by the client and/or given to the client should be in a language which the customer understands. Similarly any communication with the client shall be in a language which the customer understands.

5. Loan Processing

  • The customer shall be given information regarding interest rates, terms & conditions for loan, other charges and such other information which may affect the interests of the borrower in a clear and precise manner.
  • The overdue interest charged for late repayment should be highlighted in bold in the loan agreement.
  • After the loan is sanctioned, customer shall be informed, by way of a Sanction Letter/ Term Sheet, about the amount sanctioned. annualized rate of interest at which loan is sanctioned, mode & time at which the interest will be charged (whether monthly or quarterly) and other terms and conditions applicable to loan. The Company shall keep the record of acceptance of these terms and conditions by the Borrower.
  • A copy of the loan agreement along with all the annexures referred in the Loan agreement should be sent to the Borrower at the time of sanction / disbursement of loan.
  • The authorized staff of the Company shall verify the loan application along with all the sureties and approvals, applicable as per the policies of the Company. The staff should also make sure that the following information is filled completely:
    • Date of application
    • Borrower identification particulars
    • Loan amount and product details
    • Applicable interest rate
    • Term of the loan
    • Repayment particulars
    • Income details
    • Purpose of the Loan
    • Bank account details
  • All communications by the Company to the borrower shall be in the vernacular language or a language as understood by the borrower.
  • Loan application forms provided by the Company should 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. Borrower has to submit the following documents along with the application to obtain the loan from the Company:
    • KYC document as prescribed by the RBI (for both ID Proof & Address Proof)
    • Income Proof
    • Passport size photograph of the client & the Guarantors
  • The Company shall give acknowledgement for receipt of all loan applications. The time frame within which loan applications will be disposed shall also be indicated in the acknowledgement.
  • All sanctioning and disbursement of loans should be done only by one individual should be involved in this function with close supervision.
  • The Company will take decision to recall / accelerate payment or performance under the loan agreement as agreed with the borrower under intimation.
  • The Company will charge overdue interest on delayed payments and the same has been mentioned in the Loan agreement in Bold and in a language as understood by the borrower.
  • The Company will give notice to the borrower in the language as understood by the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges etc. The Company will also ensure that changes in interest rates and charges are effected only prospectively.

6. Loan Appraisal and Terms & Conditions

  • The designated staff of the Company will convey in writing to the borrower in the vernacular language as understood by the borrower by means of sanction letter or otherwise the following:
    • The amount of loan sanctioned
    • The terms and conditions of the loan
    • Annualised rate of interest
    • Method of application of the annualized rate of interest

7. Post disbursement Supervision

  • Post disbursement supervision would be constructive.
  • Decision to recall / accelerate payment or performance under the agreement will be in consonance with the loan agreement. For example, in case there is a shortfall in margin/security given due to market fluctuation requiring borrower to give additional margin/security or due to some other reason loan needs to be recalled or payment needs to be accelerated earlier than schedule, same shall be communicated to customer and sufficient notice, as specified in the agreement, will be given to him.
  • In case of receipt of request from the borrower for transfer of borrower account, the consent or otherwise i.e. objection by the Company, if any, should be conveyed within 21 days from the date of receipt of request. Such transfers shall be as per transparent contractual terms in consonance with law.

8. General

  • The Company will not interfere 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.
  • If there is any specific request from the borrower for transfer of borrower account, the consent or otherwise i.e. objection of the Company, if any will 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 will not resort to undue harassment ie. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc.
  • The Company will ensure that its staff is adequately trained to deal with the customers in an appropriate manner without resorting to rude behavior.

9 (I). Measures/ Regulations against Charging of Excessive Interest

  • Board of Directors of the Company shall lay out appropriate internal principles and procedures in determining interest rates and processing and other charges.
  • The Company will obey the guidelines with regard to transparency of terms & conditions of the loan as mentioned in the Fair Practices Code of the Company.
  • The Company shall adopt interest rate model with the Board Approval by taking into account the relevant factors such as Cost of Funds, Margins, and Risk Premiums etc.
  • Charging different rates of interest for different product shall be disclosed in the loan application form and loan sanction letter to the Borrower.

9 (II). Interest Rates

  • Key Corp Ltd. shall lay out appropriate internal principles and procedures in determining interest rates and other charges.
  • The rate of interest shall be disclosed to the Borrower in the Sanction Letter / Term Sheet.
  • The rate of interest prescribed shall be annualized rates.
  • The overdue interest charged shall be mentioned in the loan agreement in bold font.

10. Grievance Redressal Mechanism

  • The Company has adopted Grievance Redressal Mechanism. In case a Company’s staff is involved in any kind of misbehavior, disciplinary action against such staff shall be taken immediately.
  • For all the client related grievances, clients can make phone calls between 10.00am to 6.00pm on all working days to Mr. A.K. Singh who have been appointed as Grievance Redressal Officer vide Board Resolution dated 18.05.2013 – cell no. 09335982771 at Regd. office. At the time of making calls the clients have to provide the information of their client ID and name.
  • All the grievances related to staff will be taken through keycorpltd@gmail.com and also through the contact number 0512-3013416.
  • The Company shall have a suggestion and complain box in their premises of Regd. Office where the clients can make their grievances.
  • Company will endeavor to sort out the matter within fifteen days of receipt of a complaint. However, in case the complaint requires more time, the customer would be updated on a fortnightly basis regarding the status of redressal of his complaint.
  • If the complaint is against any Company’s official, then the same has to be heard and redressed by officials in the next higher level.

11. Non-Interference in the Affairs of the Borrower

  • The Company shall not interfere in the affairs of the borrower except for the purposes provided for in the terms and conditions of sanction of the loan, (unless new information, not earlier disclosed by the Borrower, has come to the notice of the Company).
  • The Company shall treat customer information as private and confidential and shall be guided by following principles and policies: The information shall be parted by the Company only in the following circumstances:
    • Information required to be given under law or as demanded or required by Statutory authorities.
    • Information is given with customer’s specific written permission.
  • Company’s collection policy shall be built on courtesy, fair treatment and persuasion. Efforts will be made in building customer confidence and long term relationship.
  • The staff deputed to make recovery calls shall identify themselves and shall provide details with regard to outstanding claims to the customer.
  • Under no circumstances, Company shall resort to undue harassment of the customer for recovery of the dues like persistently bothering the customers at odd hours, use of muscle power etc.
  • The Company shall give appropriate training to all of staff on the manner in which they have to deal with the customers.

12. Release of Security

  • 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 borrower.
  • If the Company has any claim against borrower in respect of the loan outstanding and repayment of all dues or on realization of the outstanding amount of loan, the Company shall give prior 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.

13. Regarding Repossession of Financed Vehicles

  • The Company will have a built in re-possession clause in the loan agreement with the borrower which must be legally enforceable.
  • To ensure transparency, the Company shall ensure that the terms and conditions of the loan agreement should also contain provisions regarding:
    • Notice period before taking possession.
    • Circumstances under which the notice period can be waived.
    • The procedure for taking possession of the security.
    • A provision regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the vehicle.
    • The procedure for sale/ auction of the vehicle.

Application Form

Key Corp Limited

16/16-A, Civil Lines

Kanpur – 208001

Dear Sir,
I / We requested you for loan to purchase a motor Vehicle No. ………………………………………….. described hereunder from Sri ………………………………………….. on the following terms. I / We agree that this proposal shall be the basis of the contract between us.

  1. Applicant Name
  2. Permanent Residential Address
  3. Nationality
  4. Age
  5. Phone / Mobile No. with STD code
  6. PAN No.
  7. Guarantor’s Name & Address
  8. Banker’s Name & Address
  9. a) Make and Model of Vehicle
    b) Vehicle No.
    c) Engine No.
    d) Chassis No.
  10. Value of the Vehicle
  11. Amount of Loan Required
  12. Repayment period
  13. Vehicle insured with Dated at ………………………………………….. this ………………………………………….. day of ………………………………………….. 20……….

I / We agree to be the guarantors in the above transaction and this proposal shall be the basis of the contract between us.

 

APPLICANT
GUARANTOR(S)

 


Documents required to be submitted with Application Form

APPLICANT PAPERS

  1. Identity Proof (D/L, Ration Card, Election Card, Copy of Pass Book)
  2. Address Proof (Election Card, Electricity Bill / Telephone Bill)
  3. Three Photographs
  4. Income Proof
  5. Signature verification by Bankers
  6. Application Form

VEHICLE PAPERS

  1. Registration Certificate
  2. Insurance Policy
  3. Road tax/ Goods Tax & Fitness
  4. Road permit Local/National
  5. Vehicle Photograph

GUARANTORS PAPERS (BY EACH GUARANTOR)

  1. Identity Proof (D/L, Ration Card, Election Card, Copy of Pass Book)
  2. Address Proof (Election Card, Electricity Bill / Telephone Bill)
  3. Three Photographs
  4. Income Proof
  5. Signature verification by Bankers / Notary

ACKNOWLEDGEMENT

Received a Loan application from Shri / Smt. ………………………………………….. S/o / W/o Shri ………………………………………….. R/o ………………………………………….. for a loan of Rs. ………………………………………….. for ………………………………………….. months for Vehicle No. …………………………………………… Please be confirmed that we will dispose of your application within 2 – 3 days after completing all the required formalities by you.

for KEY CORP LIMITED

 

(Authorised Signatory)

 


Loan Appraisal and Terms & Conditions

Shri / Smt. …………………………………………..
S/o / W/o …………………………………………..
…………………………………………..
…………………………………………..

Dear Sir / Madam,

Please refer to your application dated ………………………………………….. for sanction of Loan Rs. ………………………………………….. for purchase of Vehicle No. ………………………………………….. on the following terms & conditions:

  1. Value of the Vehicle
  2. Margin Money
  3. Amount of loan sanctioned
  4. Rate of Interest (P.A.) (2% PPD p.a. will be allowed)
  5. Management Fees (2% of the loan amount)
  6. Service Tax (12.24%)
  7. Draft Commission
  8. Advance EMI
  9. Repayment period months
  10. Monthly Installment
  11. EMI starting data
  12. Total down payment
  13. Advance to supplier
  14. Net down payment

for KEY CORP LIMITED

 

(Authorised Signatory)

 


APPLICANT ACCEPTANCE

I agree with above terms & conditions and confirm that terms will be the basis of the contract between us.

 

(APPLICANT)

 


NOTE : Details of other Terms & conditions are given in Loan Agreement.