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KRAZYBEE SERVICES PRIVATE LIMITED

FAIR PRACTICES CODE

(Approved by Board of Directors on 1st June 2017)

INTRODUCTION

KrazyBee Services Private Limited (“Company”), a Non-Banking Finance Company registered with Reserve Bank of India (“RBI”) is presently in the business of providing different types of loans which includes consumer loans, auto loans and SME loans, to its various customers. Such credit facilities are extended to different types of customers, which include Individuals, Partnership Firms, Companies and other Legal entities.


The Company has framed and adopted this voluntary Fair Practice Code (“Code” or “FPC”), which sets out the principles for fair practice standards when dealing with customers. As per the RBI directives, we have adopted and will implement this Code in our organization which has been duly approved by Board of Directors of the Company. This Fair Practices Code applies to the all categories of products and services offered by the Company (currently offered or which may be introduced at a future date).


The Company has developed the FPC for its lending operations based on the RBI guidelines, which intends to provide assurance to all the borrowers of the Company’s commitment to fair dealing and transparency in its businesses transactions. Commitments outlined in this Code are applicable under normal operating environment; however, under situations beyond the control of the corporation, it may not be possible for us to fulfill the commitments under this Code.

KEY COMMITMENTS

The Company's key commitments to customers are as follows:


A.

Act fairly and reasonably in all their dealings with customers by:

  • Meeting the commitments and standards in this Code, for the products and services the Company offers and in the procedures and practices its staff / employees follows;

  • Making sure that Company's products and services meet relevant laws and regulations in force in India;

  • Company's dealings with customers will rest on ethical principles of integrity and transparency.

B.

Help customers understand how Company's product work by explaining their financial implications; and

C.

Deal quickly and sympathetically with things that go wrong by:

  • Correcting mistakes quickly;

  • Handling customer's grievances quickly; and

  • Telling customers' how to take their complaint forward if they are still not satisfied

D.

Publicize this Code, put it on Company's website and have copies available for customer on request.

INFORMATION

A.

The Company shall help customer choose products and services, which meet their needs and give them clear information explaining the key features of the services and products of the Company they are interested in.

B.

Inform customers about the documentary information the Company needs from them to establish customer’s true identity and address and, other documents to comply with legal and regulatory requirements vis-à-vis “Know Your Customer”.

APPLICATIONS FOR LOANS AND THEIR PROCESSING

The Company shall ensure that:


A.

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

B.

The loan application forms of the Company include necessary information which affect 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.

C.

The loan application form will clearly indicate the documents required to be submitted with the application form.

D.

It issues written acknowledgement for each application after receipt of the complete information as per standard application format. Additional information and support documents may occasionally be found necessary in course of processing a customer / borrower application.

E.

Applications complete in all respects would be processed within a reasonable time frame. In case the proposal is not approved by the Company, the borrower would be intimated accordingly.

LOAN APPRAISAL AND TERMS/CONDITIONS

The Company will:


A.

Convey in writing to the borrower in the vernacular language or a 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.

B.

Mention the penal interest charged for late repayment in the loan agreement in bold face.

C.

Furnish a copy of the loan agreement preferably in the vernacular language as understood by the borrower along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction / disbursement of loans on the account of the borrower / customer held by the customer with the Company.

DISBURSEMENT OF LOANS INCLUDING CHANGES IN TERMS AND CONDITIONS

A.

The borrower shall enter into a loan agreement containing all standard and specific terms and conditions with Company, execute the requisite documents, create security for the assistance as mentioned in the LOI/sanction letter, before seeking disbursement.

B.

The Company will give 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.

C.

The Company shall also ensure that changes in interest rates and charges are effected only prospectively. A suitable condition in this regard should be incorporated in the loan agreement.

D.

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

E.

The Company will 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 the Company may have against borrower. If such right of set off is to be 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/paid.

GENERAL

A.

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 Company).

B.

In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise, 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.

C.

In the matter of recovery of loans, the Company will not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc. To avoid rude behavior from the staff of the Company, .the Company shall ensure that the staff are adequately trained to deal with the customers in an appropriate manner.

FURTHER ASSISTANCE

A grievance redressal mechanism within the organisation “Forum” have been set up to resolve disputes arising in this regard. This Forum will ensure that all the disputes arising out of the decisions the Company’s functionaries are heard and disposed of at least at the next higher level.

A.

There will be a periodical review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management.

B.

The details of the Forum are as under:

Mr. Gowrinath IVR

COO

080-39236161

C.

C. If the complaint / dispute is not redressed within a period of one month, the customer may appeal to the Officer-in-Charge of the Regional Office of DNBS of RBI -. M.L. Mythili, Asst. General Manager, Mobile: 080-22180382, under whose jurisdiction the registered office of the Company falls.

REGULATION OF RATE OF INTEREST

A.

The Board of Directors has adopted an interest rate model for determining the rate of interest to be charged on loans and advances, processing and other charges taking into account relevant factors such as, cost of funds, margin and risk premium, etc. The rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers shall be disclosed to the borrower or customer in the application form and communicated explicitly in the sanction letter and the loan agreement.

B.

The Company provided to the Borrower annualised rates so that the borrower is aware of the exact rates that would be charged to the account.

REPOSSESSION OF VEHICLES FINANCED

The Company should include a built in re-possession clause in the loan agreement with the borrower which must be legally enforceable. To ensure transparency, the terms and conditions of the loan agreement shall also contain provisions regarding: (a) notice period before taking possession; (b) circumstances under which the notice period can be waived; (c) the procedure for taking possession of the security; (d) a provision regarding final chance to be given to the borrower for repayment of loan before the sale / auction of the property; (e) the procedure for giving repossession to the borrower and (f) the procedure for sale / auction of the property. A copy of such terms and conditions shall be made available to the borrowers by the Company.

INTEREST RATE POLICY

Reserve Bank of India has directed that the Board of each NBFC shall approve an Interest rate model for the Company, taking in to 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. Further, the directives states that the rate of interest and the approach for gradation of risk and the rationale for charging different rates of interest for different category of borrowers should be communicated to the borrowers / customers in the sanction letters to them. The Interest rate model is also required to be made available on the website of the Company so as to enable the customers to understand the logic and methodology of the lending rates charged to them.


In compliance with the said RBI directives, the Interest rate model for KrazyBee Services Private Limited (“Company”) is as given below:

A.

The rate of interest for loans for various business segments and various schemes thereunder is arrived at through Company’s base rate model, cost on account of risk and tenor premium for the concerned business segment, business specific operating cost and margin is added to arrive at the lending rate.

B.

The final lending rate for various products offered by Company will be arrived at after taking into account market reputation, interest, credit and default risk in the related business segment, historical performance of similar homogeneous clients, profile of the borrower, tenure of relationship with the borrower, repayment track record of the borrower in case of existing customer, subventions available, deviations permitted, future potential, group strength, overall customer yield, nature and value of primary and collateral security, etc. Such information is gathered based on information provided by the borrower, credit reports, market intelligence and information gathered by field inspection of the borrower’s premises.

C.

The rate of interest for the same product and tenor availed during same period by different customers may not to be standardized and may vary for different customers depending upon consideration of any or combination of above factors.

D.

The interest rates could be offered by the Company on fixed or variable basis.

E.

The interest re-set period would be decided by the Company from time to time.

F.

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

G.

Interest rates 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.

H.

The interest shall be deemed payable immediately on the due date as communicated and no grace period for payment of interest is allowed.

I.

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

J.

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.

K.

Besides interest, other financial charges like processing fees, origination fees, cheque bouncing charges, late payment charges, re-schedulement charges, pre-payment / foreclosure charges, part disbursement charges, cheque swap charges, security swap charges, charges for issue of statement account etc., would be levied by the Company wherever considered necessary.

L.

Besides these charges, stamp duty, service tax and other cess would be collected at applicable rates from time to time. Any revision in these charges would be from prospective effect. These charges would be decided upon by respective business / product heads in consultation with operations, finance and legal heads.

M.

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

N.

Claims for refund or waiver of charges / penal interest / additional interest would normally not be entertained by the Company and it is at the sole discretion of the Company to deal with such requests.

O.

Any revision in the Company’s interest rates would be reviewed by COO of the Company for approval.