Fair Lending Practise Code Policy (Applicable to Microfinance Loans)

Fair practice code of Bank (Open in Hindi)

• 1. For Microfinance Loans : Currently Bank doesn’t charge any penal interest and doesn’t levy any penal charge on account of delayed payment by the customer. In case a bank decides to charge (Penal Charge) in future the same will be charged only on the overdue amount and not on the entire loan amount.


• 2. Bank shall adhere to the below-mentioned guidelines :
  
  
  • (i) Microfinance loans will be collateral free loans.
  
  
  • (ii) Loan will not be linked with a lien on the deposit account of the borrower.
  
  
  • (iii) Flexibility on repayment frequency is made available in consent/application form, filled at the time of application form.
  
  
  • (iv) Bank/BC Loan officer will conduct the household income assessment at the time of filling loan application to arrive at loan eligibility. Such income information will be reported to the credit information companies (CICs) as part of regulatory requirement.
  
  
  • (v) No prepayment penalty will be levied on Microfinance Loans.
  
  
  • (vi) Details on pricing and charges are provided in FACT SHEET, part of loan documents /Loan card.
  
  
  • (vii) Bank shall be accountable for inappropriate behaviors by its employees or employees of the outsourced agency/BCs and timely Grievance Redressal.
  
  
  • (viii) Guidelines related to Recovery of Loans:
    
    
    • a. BC field staff shall be allowed to make recovery at the place of residence or work of the borrower if the borrower fails to appear at the designated/central designated place on two or more successive occasions.
    
    
    • b. Bank or its agent shall not engage in any harsh methods towards recovery.
    
    
    • c. Customer can contact BC Branch/Bank’s Toll-Free Number/Bank’s Nodal officer as details provided in loan card for redressal of grievances.
    
    
• 3. Bank’s FPC will be displayed on Bank’s website.


• 4. Bank’s FPC will be displayed in BC office and in Branch in vernacular language.