FAIR PRACTICE CODE

Fair Practices Code (FPC) amended and duly approved by the Board of Directors in the Board Meeting held on 14.12.2015 at the Registered Office of the Company.

(A) INTRODUCTION


The Reserve Bank of India has released the final guidelines of the Fair Practices Code (FPC) for NBFCs, asking them to implement the fair practices and to post the same on the websites to cater to shareholder's information requirements. The code prescribes fair practice standards while dealing with the customers and to serve in the best interests of the company. The Code is applicable to all aspects of operations of the company. It shall be our policy to make our services available to all qualified applicants without discrimination of any kind and to treat our customers fairly. We offer all sorts of assistance and encouragement in a fair, equitable and consistent manner.  


We are committed to ensure that our charges are properly and timely informed to the existing and prospective borrowers. Disputes, if any; will be resolved by our Grievance Redressal Department. We shall ensure employee accountability at all levels of our operations. The Board and senior management will be responsible to ensure our commitment to fair and reasonable practices as also to ensure high quality services to our clients. 


The company is mainly engaged in gold loan business and presently, this  code is applicable to its transactions in connection with gold loan. However we shall ensure the fair practices in all our operations which may be introduced at a future date. This will be applicable irrespective of the fact that the service is provided at our branches or head office or over phone or by email.

  

(B) OBJECTIVES


The objectives of the Fair Practice Code are as under :

1) Adopt the best practices in dealings with customers.

2) Set challenging benchmarks and strive to achieve high operating standards for          ensuring  customer satisfaction.

3) Follow transparent, fair, ethical and legally tenable practices while conducting     business.

4) Provide all necessary information and inputs to customers / prospective customers  and promote a mutually beneficial long term relationship.

5)  Facilitate a continuously growing base of satisfied customers while scrupulously    avoiding acquisition of customers having doubtful credentials or criminal     background.


(C) APPLICATIONS FOR LOANS AND THEIR PROCESSING


1) All communications to their borrower will be in the vernacular language.

2) All the gold loan customers will be provided with a unique customer ID.

3) Loan application form will include necessary information which affects the interest of the borrower.

4) The Company will devise a system of giving acknowledgment for receipt of all loan applications.

(D) LOAN APPRAISAL AND TERMS/ CONDITIONS


           The Company will convey in writing to the borrower the amount of loan sanctioned along with the terms and conditions including annualized rate of interest and method of application. The Company will furnish a copy of loan agreement preferably in the vernacular language at the time of sanction of loans.


(E) DISBURSEMENT OF LOANS INCLUDING CHANGES IN TERMS AND CONDITIONS


1) The Company will give notice to the borrower of any change in the terms and conditions including disbursement schedules, interest rates, service charges, etc. The company will ensure that changes in interest rates and changes are effected only prospectively. A suitable condition in this regard will be incorporated in the loan agreement.

2) Decision to recall payment or performance under the agreement will be in consonance with the loan agreement.

3) The company will release all securities on repayment of all dues subject to any legitimate right or lien for any other claim the Company may have against the borrower. If such right of set off is to exercised, the borrower will 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.


(F) REGARDING EXCESSIVE INTEREST CHARGED

1) In order to avoid complaints about excessive interest charged, the company will lay down app ropriate internal principles and procedures in determining interest rates and processing and other charges.

2) In order to regulate excessive interest, the Board of the Company will adopt an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium, etc. and determine the rate of interest to be charged for loans and advances. The rate of interest applicable to the borrowers will be disclosed to the customers in the pawn ticket .

3) The rate of interest will be made available on the web-site of the Company.

4)The rate of interest will be annualized rates so that the borrower is aware of the exact rates.


(G) General

1) 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 borrowed account, the consent will be conveyed within 21 days from the date of receipt of request.

3) In the matter of recovery of loans, the Company will not resort to undue harassment. The Company will ensure that the staffs are adequately trained to deal with the customers in an appropriate manner. 


(H)The Board of Directors of the Company will lay down the appropriate grievance redressal mechanism within the organization to resolve disputes arising in this regard. Such a mechanism will ensure that all disputes arising out of the decisions of lending institution's functionaries are heard and disposed of atleast at the next higher level. The Board of Directors will also provide for periodical review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management. 


(I) GRIEVANCE REDRESSAL MECHANISM

1) The Company has framed suitable grievance redressal mechanism to resolve grievances/complaints of borrowers. All disputes arising out of the decisions of the company are heard and disposed of at the next higher level. At the operational level, the company will display the following information prominently for the benefit of our customers at all our branches.

2)  The name and contact details (Mobile number and email address) of the    Grievance Redressal Officer who can be approached by the public for resolution of complaints against the company.

3)  Complete contact details of the Officer-In-Charge of the Regional Office of  DNBS of RBI if the complaint/ dispute is not redressed within a period of one month.

4) The Grievance Redressal Officer shall review the functioning of the grievance redressal mechanism on a quarterly basis. A consolidated report of such reviews shall also be submitted to the Board of Directors on a half yearly basis.

5)  The Grievance redressal Officer of Mulamoottil Financiers Limited is Mrs. Valsala Nair. She may be contacted in the following address:
Mrs. Valsala Nair
Head Administration & Human Resource
Mulamoottil Financiers Limited
Mulamoottil Buildings, Market Road,
Kozhencherry, Pathanamthitta, Kerala - 689641
Mobile: +919497725844, E-mail: info@mulamoottilgroup.com

(J) LENDING AGAINST COLLATERAL OF GOLD JEWELLERY

1. While lending to individuals against gold jewellery, the Company will adopt the following policies in addition to the above.

a) Adequate steps to ensure that the KYC guidelines stipulated by RBI are compiled with and to ensure that adequate due diligence is carried out on the customer before extending any loan.

b) Provide MCIN (Mulamoottil Customer Identification Number), a unique ID for all gold loan customers.

c)Proper assaying procedure for the jewellery received.

d) Internal systems to satisfy ownership of the gold jewellery.

e)The policy will cover putting in place adequate systems for storing the jewellery in safe custody, reviewing the systems on an on-going basis, training the concerned staff and periodic inspection by internal auditors to ensure that the procedures are strictly adhered to.

f)The jewellery accepted as collateral will be appropriately insured. 

g)The Board approved policy with regard to auction of jewellery in case of non-payment will be transparent and adequate prior notice to the borrower will be given before the auction date. There will no conflict of interest and the auction process must ensure that there is arm's length relationship in all transactions during the auction.

h)The auction will be announced to the public by issue of advertisement in at least 2 newspapers, one in vernacular language and another in national daily newspaper.

i)The company will not participate in the auction held.

j)Gold pledged will be auctioned only through auctioneers approved by the Board.

k)The policy will cover systems and procedures to be put in place for dealing with fraud including separation of duties of mobilization, execution and approval.


2.The loan agreement will disclose details regarding auction procedure.


(K) CONFIDENTIALITY

The Company shall treat all personal information of its borrowers as private and confidential and will not reveal any information to any other entity other than for Regulatory or Statutory matters.


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