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FAIR PRACTICES CODE

INTRODUCTION

This Fair Practices Code is aimed to provide to all the stake holders, especially customers effective overview of practices followed by Barota Finance Ltd. (‘the Company’) in respect of the financial facilities and services offered by the Company to its customers. This Code has been prepared in accordance with the Master Direction – Non-Banking Financial Company –Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 dated September 01, 2016 issued by the Reserve Bank of India (RBI).

OBJECTIVE

  • To promote good, fair and trust‐worthy practices by setting standards in dealing with
    customers;
  • To ensure transparency in the Company’s dealings with its customers;
  • To ensure compliance with legal norms in matters relating to recovery of advances;
  • To enable customers to have better understanding of what they can reasonably expect
    of the services offered by the Company;
  • To reckon with market forces, through competition and strive to achieve higher
    operating standards;
  • To strengthen mechanisms for redressal of customer grievances.

APPLICABILITY

The Code shall apply to all employees of the Company and other persons authorized to represent it in the course of its business. This Code applies to all the products and services offered by the Company whether over the phone, across the counter, on the internet or by any other means.

NON-DISCRIMINATION POLICY

The Company will not discriminate between its customers on the basis of gender, physical ability, race or religion. The Company will also not discriminate visually impaired or physically challenged applicants on the ground of disability in extending products, services, facilities, etc. However, this does not preclude the Company from instituting or participating in schemes framed for different sections of the society.

LANGUAGE OF THE COMMUNICATION

All required communications by the Company to the borrower will be in English or a language as understood by the borrower.

APPLICATION FOR LOANS AND THEIR PROCESSING

  1. All loan application forms will contain detailed information relating to the terms and conditions governing the Loan and other relevant information affecting the interest of our customers. These forms would also list standard documents to be submitted with the application form. However, the Company may, depending on the credit underwriting requirements, require other documents from the customers as it may deem fit.
  2. The Company’ representatives will explain to the customers the contents of various loan documents in the English language or a language as understood by the borrower.
  3. The Company will provide acknowledgement on receipt of all loan applications. Loan applications shall be disposed of within a time frame mutually agreed between the borrower and the Company, from the date of receipt of the application form complete in all respects.
  4. The Company will consider all the documents submitted and the information provided, verify the credit worthiness of the customer and evaluate the proposal at its sole discretion. The Company shall further endeavor to intimate the status of all loan applications regarding its acceptance or rejection within the time-frame agreed.

LOAN APPRAISAL AND TERMS AND CONDITIONS

If the loan is sanctioned, the Company will convey in writing important terms and conditions to the borrower in the English language or a language as understood by the borrower including the following particulars:

  1. Assets to be financed or provided as security;
  2. Sanctioned Loan Amount;
  3. Annualized rate of Interest to be charged;
  4. Overdue interest;
  5. Cheque bouncing penalty;
  6. Tenor of loan;
  7. Instalment amount and structure;
  8. Commencement Date;
  9. Prepayment penalty.
  10. A copy of the sanction letter acknowledged by the borrower will be kept by the Company in its records.
  11. The Company will mention all the applicable charges including the penal interest charged for the late payment, prepayment charges in the loan agreement and the Welcome letter presented to the customer.
  12. After the execution of the loan agreement, a welcome letter along with a copy of the repayment schedule (containing loan amount) will be furnished to the borrowers.

PENAL CHARGES IN LOAN ACCOUNTS

In accordance with the RBI guidelines on Fair Lending Practice - Penal Charges in Loan Accounts dated August 18, 2023 the Company shall adhere to the following guidelines with effect from April 01, 2024.

  1. Penalty, if charged, for non-compliance of material terms and conditions of loan contract by the borrower shall be treated as ‘penal charges’ and shall not be levied in the form of ‘penal interest’ that is added to the rate of interest charged on the advances. There shall be no capitalization of penal charges i.e., no further interest computed on such charges. However, this will not affect the normal procedures for compounding of interest in the loan account.
  2. The Company shall not introduce any additional component to the rate of interest and ensure compliance to these guidelines in both letter and spirit.
  3. The quantum of penal charges shall be reasonable and commensurate with the non-compliance of material terms and conditions of loan contract without being discriminatory within a particular loan /product category.
  4. The penal charges in case of loans sanctioned to ‘individual borrowers, for purposes other than business, shall not be higher than the penal charges applicable to non-individual borrowers for similar noncompliance of material terms and conditions.
  5. The quantum and reason for penal charges shall be clearly disclosed by the Company to the customers in the loan agreement and most important terms & conditions / Key Fact Statement (KFS) as applicable, in addition to being displayed on the Company’s website.
  6. Whenever reminders for non-compliance of material terms and conditions of loan are sent to borrowers, the applicable penal charges shall be communicated. Further, any instance of levy of penal charges and the reason therefor shall also be communicated.

A separate Policy on Penal Charges on Loan accounts has been put in place and duly approved by the Board of Directors in its meeting.

DISBURSEMENT OF LOANS AND CHANGES IN TERMS AND CONDITIONS

  1. Any changes in the terms and conditions (which may be adverse to the borrower) including rate of interest, service charges, prepayment charges, repayment/ disbursement schedule etc. shall be informed to the borrower in writing;
  2. Changes in the terms relating to interest rates and other charges (which may be adverse to the borrower) shall be implemented with prospective effect only;

RECALL OF LOAN, RECOVERY PROCESS, REPOSSESSION OF SECURITY, AND RELEASE OF SECURITY

  1. Decision to recall any loan shall be done in accordance with the terms and conditions of the loan agreement;
  2. If any recovery proceedings need to be initiated, these shall be conducted in accordance with the rights provided under the Agreement and in accordance with legally accepted norms. At Barota, we train our staff adequately to deal with the customers in an appropriate manner. The Company does not resort to coercive measures (like persistently bothering at odd hours, use of muscle power, rude behavior or harassment from any of the staff of the Company) for recovery of loan;
  3. The Company will have built in re-possession clause in the contract/loan agreement with the borrower which must be legally enforceable;
  4. The Company will have the right to take possession of the Asset by giving notice to the Borrower to clear the dues or to hand over possession of the Asset in accordance with the terms and conditions of the Loan Agreement;
  5. To ensure transparency, the terms and conditions of the contract/loan agreement shall also contain provisions regarding:
    1. notice period before taking possession of security;
    2. circumstances under which the notice period can be waived;
    3. the procedure for taking possession of the security;
    4. a provision regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the security/ asset property;
    5. the procedure/circumstances for giving repossession to the borrower; and
    6. the procedure for sale / auction of the security/ asset/ property.
  6. 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 claims, the Company may have against the borrowers. 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 Company is entitled to retain the securities till the relevant claim is settled/ paid;
  7. The Company shall ensure that the charge over any security provided by the customer is relinquished upon the happening of any of the following events, subject to any legitimate right or lien for any other claim against the customer:
    1. payment of all dues by the customer;
    2. transfer of account and consequent settlement of all dues;
    3. closure of the loan file in due course following settlement as per agreement.
  8. In the event any other right or lien exists, the customer shall be notified about the same with full particulars thereof.

RATE OF INTEREST AND OTHER CHARGES

To ensure that the customers are not charged excessive interest rates and charges on loans and advances by the Company, the Board of Directors of the Company will adopt a Policy on Rate of Interest and other charges, which will be put up on the Company’s website for the benefit of its customers.

Note: In line with the Master Direction of RBI (DNBR.PD.007/03.10.119/2016-17 dated September 01, 2016, as amended from time to time), as a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loans by borrowers, our company will not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned for purposes other than business to individual borrowers, with or without co-obligant(s).

OTHER COMMITMENTS

  1. Non-Interference: the Company or any of the employee of the Company shall not interfere in the affairs of the borrower except as provided under the circumstances mentioned in the agreement.

    If any new information or findings not previously disclosed by the borrower comes to the notice of Barota, the above restriction shall not apply.
  2. Transfer of Account: Whenever a request for transfer of loan account is received from a customer, Company shall respond to the same within 21 days of receipt of request. Acceptance or refusal thereof shall be in accordance with terms of the agreement. Such transfer shall be as per transparent contractual terms in consonance with law.

PERIODICAL REVIEW

The Board of Directors or a committee constituted by the Board will conduct periodic review of the compliance of the Fair Practices Code.

GRIEVANCE REDRESSAL (GR) MECHANISM

Any customer having a grievance/ complaint/ feedback with respect to the product and services offered by the Company may write to the Company through any of the following channels:

  • Call: +91-9888223401
  • SMS: +91-9888223401
  • Email: customercare@barotafinance.com (General Queries/Information/feedbacks)
  • OR
  • Email: grievanceredressal@barotafinance.com (Complaints only)
  • Write To:
    Grievance Redressal Cell,
    Barota Finance Limited,
    SCO 859, NAC, Manimajra,
    Chandigarh.-160101
  • Website: www.barotafinance.com

How a complaint should be made:

In order to resolve queries and complaints/ grievances, the Company laid down the following
Grievance Redressal Mechanism.

Level 1:

Modes of Raising Complaint: A customer may raise complaint in writing, orally,
electronically or over telephone:

  • Call/ Message: +91-9888223401
  • Email: grievanceredressal@barotafinance.com
  • Website: www.barotafinance.com
  • Write To:
    Grievance Redressal Cell,
    Barota Finance Limited,
    SCO 859, NAC, Manimajra,
    Chandigarh.-160101

The customer is requested to necessarily provide Loan Account Number, Reference no. provided

by the Company, details of Feedback/ Suggestion/ Complaint and valid phone no. & e-mail ID
while communicating with the Company.

Each customer query/ complaint being unique in nature, the resolution of complaint may take up to 4 weeks after investigation. The customer will be made aware regarding the same.

Level 2:

If the Customer does not receive any response from the Company within 1 month or is not satisfied with the response received, the customer may approach to the Reserve Bank of India through the complaint lodging portal: https://cms.rbi.org.in

(Reserve Bank - Integrated Ombudsman Scheme, 2021 (‘Scheme’) and Salient features of the Scheme are published on website of the Company with contact details of Nodal officer of the Company)

“RATE OF INTEREST AND OTHER CHARGES” as follows:

To ensure that the customers are not charged excessive interest rates and charges on loans and advances by the Company, the Board of Directors of the Company will adopt a Policy on Rate of Interest and other charges, which will be put up on the Company’s website for the benefit of its customers.

Note: In line with the Master Direction of RBI (DNBR.PD.007/03.10.119/2016-17 dated September 01, 2016, as amended from time to time), as a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loans by borrowers, our company will not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned for purposes other than business to individual borrowers, with or without co-obligant(s).