Fair Practice Code

A) Background  

The Reserve Bank of India, (RBI), vide its notification number DNBS (PD) CC No.80/03.10.042/2005- 06 dated September 28, 2006, and subsequently through various other notifications has prescribed the broad guidelines on fair practices that are to be framed and approved by the Board of Directors of all Non-Banking Financial Companies (NBFCs). All of this has been consolidated in last Master Circular – Fair Practices Code notification number DNBR.(PD).CC.No.054/03.10.119/2015-16 dated July 1, 2015.

Shiksha is committed to Fair practices code and shall abide by this Fair Practices Code following the spirit of the Code and in the manner it may be applicable to its business.

B) Objective

The Fair Practices Code 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 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 loan that the Company may sanction and disburse.

C) Applicability

Shiksha Finance will ensure that the implementation of the Fair Practices Code (FPC) is the responsibility of the entire organization. The fair lending practices shall apply across all aspects of its operations including loan origination, processing, servicing, and collection activities. Its commitment to FPC will be demonstrated in terms of accountability, training, monitoring, internal controls, and optimal use of technology.

The Code will also be displayed and made available on its website and at its branches.

D) NON-DISCRIMINATION POLICY

Shall treat our clients and employees with dignity, without discrimination based on caste, colour, creed, race, religion, sex or handicap.

·        Incorporate transparent and professional governance system to ensure that our staff and persons acting for us or on our behalf are oriented and trained to put this Code into practice.

·        Educate our clients of this Code of Conduct and its implementation.

E) LOAN APPLICATION AND ITS PROCESSING

·        All communications including SMS to the borrower shall be in the vernacular language or a language as understood by the borrower.

·        Loan application forms shall 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 loan application form shall indicate the documents required to be submitted with the application form.

·        Acknowledgement for receipt of all loan applications shall be conveyed to customers.

F) LOAN APPRIASAL AND TERMS / CONDITIONS

Loan appraisal and terms/conditions shall be conveyed in writing to the borrower in the vernacular language as understood by the borrower by means of sanction letter or otherwise, the amount of loan sanctioned along with the terms and conditions including annualised rate of interest and method of application thereof and keep the acceptance of these terms and conditions by the borrower on its record.

G) DISBURSEMENT OF LOANS INCLUDING CHANGES IN TERMS / CONDITIONS

·        Notice to the borrower in the vernacular language or a language as understood by the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges etc.

·        Interest rates and charges are effected prospectively.

·        Decision to recall / accelerate payment or performance under the agreement shall be in consonance with the loan agreement

·        Release all securities on repayment of all dues or on realisation of the outstanding amount of loan subject to any legitimate right or lien for any other claim against borrower. If such right of set off 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 we are entitled to retain the securities till the relevant claim is settled/ paid.

General

The company will refrain from interference 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 lender).

2. In case of receipt of request from the borrower for transfer of borrowal 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.

H) POST DISBURSAL MONITORING / SUPERVISION

·        Interact with the clients in an acceptable language and dignified manner and spare no efforts in fostering clients’ confidence and long-term relationship.

·        Have a clearly defined and phased procedure in case of client default.

·        Maintain decency and decorum during the visit to the clients’ place for collection of dues.

·        Avoid inappropriate occasions such as bereavement in the family or such other calamitous occasions for making calls/visits to collect dues.

·        Avoid any demeanour that would suggest any kind of threat or violence.

I) Privacy of client information

Keep personal client information strictly confidential except in the following circumstances:

·        Client has been informed about such disclosure and permission has been obtained.

·        It is legally required to do so.

·        The party in question has been authorized by the client.

·        This practice is customary amongst financial institutions and available for a close group on reciprocal basis (such as a credit bureau).

J) COMPLAINT REDRESSAL MECHANISM

·        At the operational level, display the following details of Grievance redressal procedure prominently, for the benefit of their customers, at all branches / places where business is transacted.

·        The toll-free number for recording the grievances of the customers will be intimated the Application Form/Sanction Letter/other document issued to the borrower. In addition, a separate e-mail ID will be created where customer can send their grievances via e-mail.

·        After examining the Complaint, the Company will endeavour to send the customer its response, if he is not satisfied with the response he can escalate to higher level.

·        At all the branches / Head Office of the Company, notice will be put up informing the customers about the escalation mechanism and the Grievance Redressal Officer (including the name and contact details):
A. Branch Level Customer Service
Shiksha has constituted Branch level Customer Service headed by Branch head. Internal Ombudsman of the Bank
1st level: Branch Level Customer Service
All complaints / grievances of customers should be addressed to the branch manager / officer in charge.
If not satisfied with the reply / action taken by them within 7 days, customers can escalate the matter to second level
B. HO Level Customer Service
2nd level: Writing to Head- Customer Care explaining the details of the issue concerned, please contact Customer Service
Shiksha Financial Services India Private Limited
3rd Floor No. 497, Kattima Isana Mall, Poonamallee High Road,
Arumbakkam, Chennai – 600 106.
Contact No: 044-61916600, Email id: service@shikshafinance.com
3rd level: In case the complaint is not resolved within 10 days, please contact:
Grievance redressal at Corporate Office – Third level
Mr. SampathKumar TA

Grievance Redressal Officer
Shiksha Financial Services India Private Limited
3rd Floor No. 497, Kattima Isana Mall, Poonamallee High Road,
Arumbakkam, Chennai – 600 106.
Contact No: 044- 61916600 / 9384002130, Email id: sampathkumar.ta@shikshafinance.com

K) Reserve Bank of India – Banking Ombudsman (2006) and Integrated Ombudsman (2021) Scheme

As per the Reserve Bank of India Integrated Ombudsman Scheme, 2021, a customer can file his complaint before the Banking Ombudsman if the reply is not received within a period of 30 days after the Company Concerned has received his representation, or the rejects the complaint, or the complainant is not satisfied with the reply given to him by the RE.

In line with the above Scheme, in case customers have not heard from us for 30 days or customers are not satisfied with the resolution provided by any of the above channels or individuals appointed by Shiksha Finance, please feel free to contact the Banking Ombudsman, a statutory body appointed by the Reserve Bank of India to look into the provision of satisfactory service by FIs. A detailed note is made available on Shiksha Website (https://shikshafinance.com/) or Customer can refer the same through http://www.rbi.org.in.

Escalation to RBI -Ombudsman Scheme, 2021.

In case the complaint is not resolved within 30 days,Please contact The Reserve Bank Integrated Ombudsman Scheme, 2021:

·        Complaints can be filed online on complaint lodging portal of the Ombudsman at https://cms.rbi.org.in

·        Complaints can also be filed through the dedicated e-mail to CRPC@rbi.org.in
or sent in physical mode to
The ‘Centralised Receipt and Processing Centre’
Reserve Bank of India,
4th Floor, Sector 17, Chandigarh – 160017

·        Additionally, a Contact Centre with a toll-free number – 14448 (9:30 am to 5:15 pm) – is also being operationalised in Hindi, English and in eight regional languages to begin with and will be expanded to cover other Indian languages in due course.

·        The Contact Centre will provide information/clarifications regarding the alternate grievance redress mechanism of RBI and to guide complainants in filing of a complaint.

·        A copy of the Scheme is available on the RBI website and on the CMS portal (https://cms.rbi.org.in).

L) POLICY FOR DETERMINING INTEREST RATES, PROCESSING AND OTHER CHARGES

Shiksha Financial Services India Private Limited has its own model for arriving at interest rates taking into consideration among other things Shiksha’s weighted average cost of funds, un-allocable overheads and other administrative costs which is further adjusted for ALM mismatch.

The said rate is reviewed from time to time. The rate of interest for the same product and tenor availed during same period by different customer needs not to be standardized. It could vary for different customers depending upon consideration of any or combination of above factors.

The interest rates could be offered on fixed or variable basis and charged on reducing balance method.

The interest could be charged on monthly or quarterly rests for different products / segments.

Interest rates / interest type would be intimated to the customers at the time of sanction / availing of the loan and EMI apportionment towards interest and principal dues would be made available to the customer.

Besides normal interest, the company may levy additional / penal charges for delay or default in making payments of any dues. These additional or penal charges for different products or facilities would be decided by the respective business / product heads.

Changes in the interest rates and charges would be prospective in effect and intimation of change of interest or other charges would be communicated to customers in a mode and the manner deemed fit(SMS, email, Website)

While deciding the charges, the practices followed by the competitors in the market would also be taken into consideration.