FAIR PRACTICES CODE

I) Applications for loans & their processing

a) Loan application forms in respect of all categories of loans irrespective of the amount of loan sought by the borrower shall include information about the margin requirements, interest rate, fees/charges payable for processing, pre-payment options etc.

b) The loan applications shall be verified within a period of 7 days. If additional details/documents are required, the applicants shall be intimated immediately. Upon completion of all requirements/formalities by the applicants, an acknowledgement for receipt of loan applications shall be given to them.

Time period within which loan applications upto Rs.2 lakhs will be disposed of shall be indicated in acknowledgement of such applications.

c) Wherever possible, the main reasons, which have lead to rejection of the loan applications of all categories of loans irrespective of any threshold limits, including credit card applications, shall be conveyed to the applicant.

II) Loan appraisal and terms/conditions

a) Need based credit requirement of the borrowers shall be assessed as per Bank guidelines. Margin and security stipulation shall not be used as a substitute for due diligence on credit worthiness of the borrowers.

b) The sanctioned limits alongwith the terms & conditions thereof shall be conveyed to the borrowers on a prescribed letter and borrower’s acceptance of these terms and conditions shall be kept on record.

c) A copy of the loan agreement alongwith a copy of all enclosures quoted in the loan agreement shall be furnished to the borrower.

d) The disbursal of credit facility shall be solely at the discretion of the Bank and Bank may disallow facility, keeping in view its exigencies;

· The Bank may disallow drawing beyond the sanctioned limits.

· Cheques issued for the purpose other than specifically stated in the credit sanction or in the agreement may be dishonoured/returned

· Drawing in the account may be disallowed on its classification as a non-performing asset or on account of non-compliance with the terms of sanction or agreement.

· The Bank shall not be under obligation to meet further requirements of the borrowers on account of growth in business, etc. without proper review of credit limits.

e) In the case of lending under consortium arrangement, the loan proposal shall be disposed of within the prescribed time norms provided applications/ proposals are received together with required details/ information supported by requisite financial and operating statements.

III) Disbursement of loans including changes in terms & conditions

The disbursement of loans sanctioned shall be made in time in conformity with the terms and conditions governing such sanction.

Changes in the terms & conditions including interest rates, service charges etc. shall be advised to the borrowers. Changes in interest rate and charges shall be made effective only prospectively. Besides, service charges, rate of interest, etc. shall also be made available on the Bank’s website.

IV) Post-disbursement supervision

a) Post-disbursement supervision particularly in respect of loans upto Rs.2 lakhs, shall be constructive with a view to take care of any "lender-related" genuine difficulty that the borrowers may face.

b) Before taking decision to recall/accelerate payment or performance under the agreement or seeking additional securities, notice shall be given to the borrowers, (except in exigencies) for a period as specified in the loan agreement or 30 days if no such condition exists in the loan agreement.

c) All securities shall be released on receiving payment of loan or realisation of loan subject to any legitimate right or lien for any other claim bank may have against borrowers. If such right of set off is to be exercised, borrowers shall be given notice about the same with full particulars about the remaining claims and the documents under which bank is entitled to retain the securities till the relevant claim is settled/paid.

V) General

a) Bank will not interfere in the affairs of the borrowers except for what is provided in the terms and conditions of the loan sanction documents (unless new information, not earlier disclosed by the borrower, has come to the notice of the Bank).

b) In the matter of lending, discrimination shall not be on grounds of sex, caste and religion. However, this does not preclude Bank from participating in credit scheme framed for weaker sections of the society.

c) In the matter of recovery of loans, the Bank shall not resort to undue harassment.

d) In case of receipt of request for transfer of borrowal account, either from the borrower or from a bank/financial institution accompanied with a request from borrower, which proposes to take-over the account, the consent or otherwise i.e, objection of the Bank, if any, shall be conveyed within 21 days from the date of receipt of request.

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