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UNIGOLD FINANCE LIMITED

Fair Practice Code

Corporate Identity Number :U64990TN1995PLC032810

TABLE OF CONTENT

  1. INTRODUCTION
  2. OBJECTIVES
  3. APPLICATIONS / FACILITY AGREEMENTS
  4. TERMS/CONDITIONS
  5. DISBURSEMENT FACILITY INCLUDING EFFECTIVE CHANGES IN TERMS AND CONDITIONS
  6. REGULATION FOR CHARGING OF EXCESS INTEREST
  7. POLICY /GUIDELINES ON KYC, APPRAISAL INSURANCE, STORAGE OF SECURITIES, AUCTION, ETC
  8. GENERAL
  9. INTERNAL CONTROL SYSTEM
  1. INTRODUCTION

This Code has been framed in accordance with Guidelines on Fair Practice Code for NBFC as issued by Reserve Bank of India (“RBI”) and amendments thereon. The Fair Practice Code is aimed to provide to the customer’s effective overview of practices, which will be followed by the Company in respect of the financial facilities and services offered by the Company to its customers. The Code will facilitate the customers to take informed decisions in respect of the financial facilities and services to be availed by them and will apply to any facility that the Company may sanction and disburse with. The Company’s business would be conducted in accordance with prevailing statutory and regulatory requirements, with due focus on efficiency, customer-orientation and corporate governance principles.

  1. OBJECTIVES
  • To provide full information/knowledge to customers regarding the products and services offered by the Company so as to enable them to take an informed decision.
  • To increase transparency, so that, customers can have a better understanding of what they can reasonably expect of the services extended by the Company.
  • To promote a fair and cordial relationship between the customer and the Company.
  1. APPLICATIONS FOR LOANS AND THEIR PROCESSING
  • All communications to the borrower shall be in simple vernacular language or a language as understood by the borrower.
  • Application forms would 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 application form indicates the documents required to be submitted with the application form. A list of documents/papers to be submitted along-with the application which will be specified in the application form.
  • The Company would devise a system of giving receipt/acknowledgement against the Gold ornaments pledged in the Gold Loan account
  1. TERMS/CONDITIONS
  • The Company would convey in writing to the borrower in the language as understood by the borrower by means of sanction letter. The amount of facility sanctioned along with the terms and conditions including annualized rate of interest and method of application thereof will be clearly advised in the sanction letter. A copy of the sanction letter duly signed/acknowledged by the Borrower will be kept on record.
  • The Company shall mention the penal interest liable to be charged for late repayment in bold in the loan agreement/sanction letter.
  • The Company shall furnish a copy of the loan documents, where the borrower requires, in the vernacular language or a language as understood by the borrower along with a copy each of all enclosures quoted in the facility agreement to all the borrowers at the time of sanction/ disbursement of the loan.
  1. DISBURSEMENT OF LOAN INCLUDING CHANGES IN TERMS AND CONDITIONS
  • In the event that a customer’s agreement is subject to any changes in its terms and conditions, including changes effected in loan amount due to top up facility, in interest rate against delayed payment, service charges, prepayment charges etc. A signed acknowledgment of this letter will be obtained for branch records & Top up facility or partial release can only be done at the written request of the borrower & on execution of the applicable documents.
  • Changes in interest rates and charges will be applied as of the effective date as per the original loan agreement in case of such change and not retrospectively.
  • Any decision to recall or accelerate payment due to customer’s timely non-service of interest or final repayment on demand as per agreement will be in accordance with the terms permissible under the loan agreement.
  • The Company would release all Pledged Gold Ornaments on repayment of entire dues or on realization of the outstanding amount of the Gold loan or facility or any other legitimate right or lien for any other claim the Company may have against borrower. If such right of set off or lien 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.
  1. REGULATION FOR CHARGING OF EXCESS INTEREST
  • The Company shall lay out appropriate internal policies and procedures in determining interest rates and processing and other charges.
  • The rate of interest shall be disclosed to the borrower or customer in the pledge form/loan agreement and communicated explicitly in the sanction letter.
  • The information published on the website or otherwise published would be updated whenever there is a change in the rates of interest.
  • The rate of interest would be annualized rates so that the borrower is aware of the exact rates that would be charged to the account.
  • The rate of interest to be charged depends upon as per the particular scheme opt out by the customer/borrower. The customer/borrower has the liberty to choose the scheme option & no undue pressure to be put on the customer by the staff members to go for a particular scheme for any hidden interest. Hence transparency should be maintained by the staff members while communicating the detail scheme structure to the customer/borrower.
  1. POLICY/ GUIDELINES ON KYC, APPRAISAL INSURANCE, SAFE KEEPING OF SECURITIES, AUCTION, ETC

The Company shall put in place a policy duly approved by the Board covering the following aspects:

  • Adequate steps to ensure that Branches adhere to the KYC norms stipulated by RBI & complied with it. Branch to ensure that adequate due diligence is carried out on the customer before extending any loan.
  • Before accepting the Gold Ornaments as security ,Branches carry out the Gold appraisal process to assess the purity of the ornaments to work out the maximum loan eligibility of the customer. The Gold appraisal process is done following the various testing procedures as per the standing guidelines of Company. Once the Gold appraisal is done & the value of ornaments worked out the quantum of loan is decided less of the minimum stipulated margin as per Company’s standing norm.
  • Declaration shall be obtained from the borrower confirming ownership of gold jewellery.
  • All branches shall have proper storage facility of either Strong Rooms or Safes conforming to BIS Standards of reputed make to store for safe keeping of the jewellery in safe custody. The sets of keys to the strong room/safe shall be held separately by two officials and the operations thereof shall be done jointly. The staff shall be imparted training on a continuous basis to ensure that the guidelines covering security issues aspects are strictly adhered to. The gold items shall be periodically inspected by the internal auditors to ensure quality, quantity and proper storage.
  • The jewellery accepted as collateral Primary security shall be adequately and appropriately insured.
  • The auction procedure in case of non – repayment shall be transparent. Prior notice to the borrower shall be given before the auction and there shall not be any conflict of interest. The auction process shall ensure that an arm’s length relationship in all transactions during the auction is maintained including with group companies and related entities. The details regarding procedure for auction shall be disclosed in the loan document for availing the loan. The auction will be only through auctioneers approved by the Board and the Company shall not participate in the auction. The auction shall be announced to the public by issuing advertisements in at least two newspapers, one in vernacular language and the other in a national daily /local newspaper.
  • Any fraud in the functioning of the Company shall be investigated and inquired into by the appropriate authority and suitable punitive action shall be taken by the appropriate disciplinary authority. Any review of the decision of the disciplinary authority shall be carried out by the Managing Director
  1. GENERAL
  • The Company shall not interfere in the affairs of the customer except for the purposes set out in the terms and conditions of the agreements (unless new information that was not earlier disclosed by the customer, comes to the notice of the Company).
  • In the event that the customer expresses a request to transfer its obligations under the agreement to another party, the Company will give its decision (consent or otherwise) within 21 days from the date of receipt of the request. Any transfer of a customer’s agreement to another party shall be subject to the contractual terms in accordance with the prevailing law.
  • In the event that it is necessary to recover overdue payments from customers, the Company will not unduly harass or persistently bother the customer at inconvenient hours, or use undue pressure for the recovery of overdue payments. The Company shall ensure that the staff is adequately trained in handling collection activity in a professional manner by adopting a due legal process as per the law of the land.
  • Fair Practice Code, would be put up on the Company’s website for information of various stakeholders.
  • The details of the Grievance Redressal Officer shall be displayed on the website of the Company.
  1. INTERNAL CONTROL SYSTEM
  • The Board of Directors of the Company shall periodically review the compliance of Fair Practices Code and the functioning of the Grievance Redressal Mechanism.
  • As the primary responsibility for compliance of the Code rests with the Company, necessary organizational arrangements will be made to assign responsibility for compliance to designated individuals within the Company and proper systems of internal control including audit and periodic inspection to ensure the same will be put in place.