Fair Practices Code Policy

1.Introduction

Reserve Bank of India vide Non-Banking Financial Company – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017 dated 4th October 2017 and updated on 9th November 2017 has directed every Non-Banking Financial Company – Peer to Peer Lending Platform (NBFC-P2P) to implement a Fair Practices Code (FPC). RBI Master Directions require an NBFC-P2P to implement a Fair Practices Code for its operations. Fair Vinimay Services Pvt. Ltd., being an existing Peer to Peer Lending platform is in the process of applying for registration as an NBFC-P2P under these Master Directions and has adopted this Fair Practices Code, as approved by its Board of Directors at its meeting held on 26th December 2017.

Fair Vinimay Services Pvt. Ltd. or IndiaMoneyMart (hereinafter referred as “the company” or “IMM”), being a service industry player, needs to have a focused and pinpointed approach towards customer service. This Fair Practice Code (FPC) is aimed to provide to all the stake holders, especially customers effective overview of practices followed by the company in respect of the financial facilities and services offered by the company to its customers.

The FPC is aimed to provide to the customers effective overview of practices, which will be followed by the Company in respect of the financial facilities and services offered by the company on its P2P platform IMM to its customers. The Code will facilitate the customers/ participants to take informed decisions in respect of the financial facilities and services to be availed by them and will apply to any loan that is sanctioned and disbursed on the company’s platform. It is, and shall be, the policy of IMM to make available to all eligible qualified applicants, without discrimination.

Our Company’s policy is to treat all the clients consistently and fairly. The employees of the Company will offer assistance, encouragement and services in a fair, equitable and consistent manner. The Company will also communicate its FPC to the customers by uploading the same on its website.

2.Key Objectives

The key objectives of putting in place the FPC are as under:

  • (i)To act fairly and reasonably in all the dealings with the borrowers and Lenders (collectively known as “The Participants” or “The Customers”) by ensuring that

    • (a)The Company’s products and services meet relevant laws and regulations as applicable;

    • (b)The products and services of the Company will meet the commitments and standards in this Code.The Company's dealings with customers will rest on ethical principles of integrity and transparency.

  • (ii)Adhering by the Prudential Norms specified by the RBI Guidelines with respect to maintenance of leverage ratio, period of maturity of loans (i.e. not to exceed 36 months) and ceiling applicable on the amount that can be borrowed and lent.

  • (iii)Provide a true and fair disclosure to the lender with respect to the details of the borrower (including personal identity, required amount, interest rate sought and credit score arrived at by the Company, terms and conditions of the loan including likely return, fees and taxes); to the borrower details of the lender (excluding personal identity and contact details)

  • (iv)Ensuring that the all dealings between the participants and the Company are backed by appropriate agreements that categorically specify the terms and conditions agreed between the participants (i.e. borrower, lender) and the Company

  • (v)The Company shall maintain confidentiality of information received from the participants.

  • (vi)The Company shall not resort to undue recourse in matters of recovery of loans of the lenders.

  • (vii)For the purpose of transparency, the Company shall publicly disclose on its website overview of credit assessment/ score methodology and factors considered, broad business model, grievance redressal mechanism, disclosure on usage/ protection of data.

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    (viii)Help customers understand how company's product and services work by:

    • (a)Informing about the company’s products, services and process in simple English or simple Hindi or local Language as per customers preference.

    • (b)Explaining the financial implications on on-boarding borrower/lender.

     

  • (ix)The Company will make every attempt to ensure that its customers would have trouble-free experience in dealing with it. However, in case of error of commission and/or omissions, it shall: 

    • (a)deal with the issues promptly and professionally;

    • (b)handle customer's complaints quickly

    • (c)deal with the customer grievances in a quick and efficient manner to the satisfaction of the customers;

    • (d)take steps for reversal of any charges / interest levied erroneously or through oversight on a customer’s account

3.Sales Origination

The Company will guide its customers in choosing products and services which meet his/her requirements.

  • a)When dealing with potential customers, the Company will:

    • -Give the customer clear information explaining the key features of the services and/or products the customer has evinced an interest in and how they meet his requirements.

    • -Inform the customer about the information requirement to fulfill its ‘Know Your Customer’ (KYC) norms, establish the customer’s identity and any other documents required to comply with legal and regulatory requirements in force from time to time

    • -Seek additional information from the customer regarding his family or any other data, with his consent, to build a database.

  • b)The Company will provide information on the various channels that can be used to access its products & services.

  • c)Once the customer has posted his/her requirement, the Company will inform the customer how it works and explain the rights and responsibilities specific to the mode of operation

  • d)In case, the Company is using Direct Sales Agents (DSAs), it will communicate the relevant portion of the FPC to be adhered to by the DSAs, when dealing with the potential / existing customers.

4.Applications for loans and their processing

The Company shall act only as an intermediary providing an online marketplace or platform to participants involved in P2P lending and will not lend on its own or provide any credit enhancement or credit guarantee.

The participants will have themselves listed on the web-portal of the Company and have access the information available. The loans shall be processed based on the instructions of the borrower, lender and trustee.

The fund transfer between the participants on the P2P platform shall be through escrow account which will be operated by the trustee. At least two escrow accounts, one for funds received from lenders and pending disbursal, and the other for collections from borrowers, shall be maintained. All fund transfers shall be through and from bank accounts and cash transaction is strictly prohibited. The Company shall only have a ‘view access’ to the information available on its portal for reporting purposes.

In addition to the above, the participants may also take a note of the below:

  • i.All communications with the borrower shall be in English language/ explained in Hindi/ local language for proper understanding by the borrower. No application will be processed unless the applicant completes the entire process of registration with IMM. The registration of borrower on the IMM platform does not guarantee that the loan will be sanctioned to the applicant.

  • ii.The application for loan would require the applicant to submit/ upload the documents including those required under KYC guidelines of RBI and as required for credit and financial assessment for sanction of loan.

  • iii.The Company has devised a system of giving acknowledgement for registration of the borrower and receipt of information for all loan requirements.

  • iv.All applications for loan will be disposed within a maximum period of 3 days subject to submission of required information.

    • The platform shall not provide any assurance for the recovery of loans. Further, there is no guarantee of return and that there exists a likelihood of loss of entire principal in case of default by a borrower.

5.Approval - Loan appraisal and terms/conditions

  • i.Being a digital P2P Lending platform, the loans will be made live on the platform once the underwriting team of IMM assesses credit risk/ profile of the borrower and finds it creditworthy.

  • ii.The Company shall consider all the loan applications keeping in mind the risk based assessment procedures adopted by it.

  • iii.The Company, before making the borrower live on the IMM platform, would assess the ability of the borrowers to repay the loan.

  • iv.Once approved by the IMM underwriting team, the borrowers are made live on the IMM platform with risk gradation and indicative interest rates (annualized), based on which Lenders may select and indicate their interest on funding the borrowers. Based on the interest shown by the Lenders, the borrowers are virtually funded on the platform and interest rates and other terms are communicated.

  • v.On receipt of virtual funding request, the borrower have to give acceptance to the Lenders proposal and Loan agreements are generated online on acceptance by the borrower.

  • vi.Loan Agreement shall also mention about the penal interest and other charges applicable for late payment.

6.Disbursement of loans, including changes in terms and conditions (communicated in preferred language)

  • i.Disbursement of amount of loans sanctioned may be made available to the borrowers as per IMM platform internal rules subject to completion of all formalities including execution of loan documents.

  • ii.Any change in the terms and conditions will be in mutual consent of the borrowers and Lenders and with complete information to IMM.

  • iii.The IMM platform allows prepayment of loan. Change in the interest rates and service charges shall be made applicable prospectively in case there is delay in repayment. The loan agreement shall contain a specific clause in this regard.

  • iv.All disbursement of loans and collection of repayment will be through IMM escrow accounts opened specifically for this purpose, the details of which will be available

7.Post disbursement supervision/monitoring

  • i.The decision, if any, of the Company to recall/accelerate payment or performance of loan shall be in accordance with the terms and conditions of the Loan Agreement.

  • ii.The Company shall give reasonable time to the borrowers before recalling the loan or asking for accelerating the payment or performance subject to the terms and conditions contained in the Loan Agreement and other related documents

8.Recovery Process

In the matter of recovery of loans, the company shall resort only to remedies which are legally and legitimately available to it and will not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc.

9.General Clause

  • i.The company will refrain from interfering in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan documents, unless new information not earlier disclosed deliberately or otherwise by the borrower has come to its notice.

  • ii.The Company shall not discriminate on the grounds of gender, caste or religion in its lending policy and activities.

  • iii.On request from borrower for closure of his loan account, the request will be executed within one month of receipt of request subject to clearance of pending dues and completion of all the formalities as prescribed by the Company. In case the request cannot be executed in the time frame stated above due to any reason, the same may be communicated to the borrower.

10.Empanelment of Lenders/ Borrowers

  • i.The process of authentication for both the borrowers and Lenders are completely automated and starts with a simple registration process.

  • ii.The registration of borrower at IMM is a six steps process starting from submitting basic KYC details (Adhaar number, PAN, etc) to uploading of various data (salary slip, bank statements, etc.) as required for credit assessment.

  • iii.On receipt of the KYC information of the borrower, the authentication is done by getting information from credit information companies and matching with the details provided in the KYC details followed by a physical verification of the borrower.

  • iv.The process of lenders/ borrower authentication is done at the first step itself through authentication of mobile and email data by sending OTP to the lender/ borrower for verification and also filling information as required for security check.

  • v.The registration of lender also starts with submission of basic KYC details to uploading of various data related to financial information.

11.Matching of borrowers/ lender

  • i.Based on the credit assessment by the IMM team, if the borrower registered on the platform is found creditworthy, his/ her profile is made live on the IMM platform and the lenders registered with IMM can view the credit profile of the borrowers.

  • ii.Lenders can select borrowers and express their intention to lend on the platform based on which intimation is sent to the borrower and the borrower has the option to accept or reject.

  • iii.As per IMM platform rules, no lender can fund more than 50% of the requirement to a borrower with a maximum cap of Rs. 50,000 per borrower and no borrower can take disbursement if 70% of the borrower’s requirement is not virtually funded.

  • iv.Once 70% of the borrower’s requirement is virtually funded, the borrower has the option to go for disbursement or wait for the requirement to be fully funded.

  • v.Once the borrower opts for disbursement, loan agreements are automatically generated online and the borrower has to take printout of the same on the stamp paper in the state in which the borrower resides, sign the agreement, send it to IMM/ lender along with post-dated cheques / Nach mandate and pay transaction fees to IMM as applicable, after which the disbursement is made to the borrower.

12.Credit Information Companies

The company would give information about customers to Credit Information Companies (CIC) as per RBI Guidelines on:-

  • a)Opening of a loan account

  • b)Details of the customer failing to meet his/her repayments on time and the performance of loan account which includes how much loan has been sanctioned and the subsequent performance

  • Legal proceedings have been initiated against the customer to recover the dues.

  • d)Debts settled through legal recourses against the customer

  • e)The company may give CICs other information about the customer's account if law requires it or the customer has given them his/her permission to do so. A clause to this effect has been included in the Loan Agreement seeking the customers consent to share information on his loan with Credit Bureaus.

13.Confidentiality

Unless authorized by the borrower, the Company will treat all his personal information as private and confidential except to the extent of disclosure of information related to the borrowers of IMM to the Lenders for taking Lending decisions as permitted under RBI Guidelines for NBFC – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017 dated 4th October 2017 and subsequent amendments.

IMM will not reveal information or data relating to customer accounts, whether provided by the customers or otherwise, to anyone, other than in the following exceptional cases:

  • a)If the information is to be given by law.

  • b)If there is a duty towards the public to reveal the information.

  • c)If the Company’s interests require them to give the information (for example, to prevent fraud) but it should not be used as a reason for giving information about customer or customer accounts [including customer name and address] to anyone else, including other companies in the group, for marketing purposes.

  • d)If the customer gives consent to the Company to reveal the information.

  • e)If IMM is asked to give a reference about customers, they shall obtain his / her/ it’s written permission before giving it.

  • f)IMM shall not use customer’s personal information for marketing purposes by anyone unless the customer specifically authorizes them to do so.

  • g)IMM shall be entitled to share the loan and other information of the customer with the Credit Information Companies as per RBI guidelines.