Fair Practice Code

Kosamattam Finance

The Fair Practice Code (FPC) of Kosamattam Finance Limited as per the guidelines issued by Reserve Bank of India wide its circular, DNBR(PD)CC.No.054/03.10.119/2015-16 dated 01/07/2015 to ensure better service quality and bring in transparency in its loan process. FPC will be applicable for all branches of Kosamattam Finance Limited including head office

Fair Practice code

Applications for loans and their processing

  • All communications to the borrower shall be in the vernacular language or a language as understood by the borrower.
  • Loan application forms include information which affects 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. If any additional documents are required from the customer it shall be informed to the customer immediately.
  • As a matter of policy loan application will be rejected /accepted immediately. However, if there is any delay in sanctioning the loan on the same date of application due to reasons like field verification, documentation etc, it shall be informed to the customer.

Loan appraisal and terms/conditions

Company will convey to the borrower in the vernacular language as understood by the borrower, the amount of loan along with the terms and conditions including annualised rate of interest and method of application thereof before sanctioning the loan. Any penal interest that shall be collected will be shown in bold in the loan agreement.

Disbursement of loans including changes in terms and conditions

  • 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. All changes in interest rates and charges are effected only prospectively.
  • Decision to recall / accelerate payment or performance under the agreement will be in consonance with the loan agreement.
  • 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 Company may have against borrower. If such right of set off is to be exercised, the borrower shall be informed about the same under which Company are entitled to retain the securities till the relevant claim is settled/ paid.

General

  • Company should not interference in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement (unless information, not earlier disclosed by the borrower, has been noticed).
  • In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise i.e. objection from our side, if any, should 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. However transfer is not allowed in case of gold loan.
  • In the matter of recovery of loans, we should not resort to undue harassment viz; persistently bothering the borrowers at odd hours, use muscle power for recovery of loans etc. In case of any such activity it shall be informed in our registered office.
  • As a measure of customer protection and in order to bring in uniformity with regard to prepayment of various loans by borrowers of banks, we shall not charge any foreclosure charges/ pre-payment penalties on our loan.

Responsibility of Board of Directors

The company have a Customer Grievance Reddressal Forum at Senior Management Level. All the disputes arising out of the functionaries are heard and disposed of to the higher level. The said forum shall provide the highlights of issues and redressal, if any, for their review and compliance at each subsequent meeting. The Board of Directors will also provide periodical review of the compliance of the Fair practice Code and the functioning of the grievances redressal mechanism at various level of management.

Grievance Redressal Officer

At Kosamattam Finance Limited we believe in providing the best of service to our customers. We provide customers with easy access to information, products and services, as well as the means to get their grievances redressed. If at any stage, if a customer is not satisfied with the service given to him/her, he/she can contact the Company.

Step 1 :
Please visit to the nearest Branch of our Company and submit your complaints/grievance and get your complaint logged in the “Complaint & Grievance Register” maintained at the branches (During the working hours from 8:45 A.M to 5:30 P.M) or contact at our Customer Care no. 9446523300 or e-mail at grievance@kosamattam.com. We will respond to your complaint within 15 working days.

Step 2 :
If you are still not satisfied with the resolution you receive, or you don’t receive any response within 15 working days you can write, mail, fax or call to the Grievance Redressal Officer of the Company :

Mrs. Milu George,
Kosamattam Finance Limited
Kosamattam MKC Building
M.L.Road,Market Junction –Kottayam
Ph:0481-2586400

After examining the matter, your grievance/complaint shall be resolved within 15 working days by us. If your complaint still remains unresolved and is not redressed within a period of one month, you may approach to the regulatory authority of Non- Banking Financial Companies, i.e. Reserve Bank of India for reddressal of your complaints at below address:

The General Manager,
Reserve Bank of India,
Department of Non- Banking Supervision,
Bakery junction, P.B.No.6507
Trivandrum-695033.

Regulation of excessive interest charged by NBFCs

  • The Board of the company has adopted an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium and determine the rate of interest to be charged for loans and advances. The rate of interest charged to different categories of borrowers will be disclosed to the borrower or customer in the application form and communicated in the sanction letter.
  • The rates of interest and the approach for gradation of risks shall also be made available on the web-site of the companies or published in the relevant newspapers. The information published in the website or otherwise published will be updated whenever there is a change in the rates of interest.
  • The rate of interest should be annualised rate so that the borrower is aware of the exact rates that would be charged to the account.

Lending Against Collateral of Gold Jewellery

While lending to individuals against gold jewellery, decision will be based on the Board Approved Policy.

Company have a board approved policy covering the following:

  • Customer has to produce the Proof of identity, (namely, photocopy of election identity card, Aadhar, passport, driving licence, PAN Card etc.) and other such documents demanded by the Company. Company will ensure that the KYC guidelines stipulated by RBI are complied with and will ensure that adequate due diligence is carried out on the customer before extending loan.
  • Unless or otherwise specified all gold loans are sanctioned for a period as per the Comprehensive Loan Policy approved by the Board from time to time. The Company will make only a preliminary verification of the Gold and the Company has the right to further check the purity / weight of the Gold internally or by experts at any point of time if required, at the Company's sole discretion, at the cost and expense of the Loan Applicant/Borrower. The Company shall, at its discretion, have the right to open the packets, melt all or any portion of the Gold, at any time during the currency of the Loan. Proper appraisal procedure will be done for jewellery accepted as collateral security. There will obtain the declaration of the borrower through pawn ticket confirming ownership of the gold jewellery.
  • The loan is based on the weight, purity of the Gold and adjusted market value.
  • The Company shall have the right to make disclosure to Credit Information Bureau of India Ltd. (CIBIL) or such other similar agencies.
  • As a matter of policy and customer service, loan applications are sanctioned/rejected immediately. Disbursement of the loan and acceptance of security will be carried out simultaneously.
  • After taking into account relevant factors such as cost of funds, margin and risk premium, the Company shall frame appropriate internal principles and procedures for determining the interest rates and processing and other charges, if any, and the Company will ensure that they are not excessive. The Company shall, at the time of disbursal, ensure that the interest rate and other charges, if any, on loan and advances are in strict adherence to above referred internal principles and procedures.
  • The rate of interest will be annualized rates so that the borrower is aware of the exact rates that would be charged on the loan.
  • Interest shall be payable at the rate specified in the Pawn Ticket along with incidental charges as may be fixed by the Company from time to time. When interest is not paid at monthly intervals, the interest shall be compounded on a monthly basis. Interest will be calculated on the basis of 360 days a year on the amount outstanding. Interest will be payable from the date of the loan till the account is closed, both dates inclusive. Penal interest if any will be communicated to the customer, and the same will be mentioned in the pawn ticket.
  • The postage charges, as revised from time to time at the discretion on the Company, shall be recovered from the respective account.
  • The information relate with rate of interest published in the website shall be updated whenever there is change in the rates.
  • Notwithstanding anything mentioned herein, the Loan Applicant/Borrower shall repay the entire dues/outstanding under the Loan including principal, interest ("Dues"), and other charges, immediately on demand, if the Company observes, after verification internally or by experts, that the whole or part of the Gold is not of the prescribed weight / purity or if the title of the Loan Applicant/Borrower to the Gold is found defective or if the same is disputed by any other person. Pawn documents issued by the Company stating the exact grams of the gold after translating the same to 22 carat is based on the preliminary verification made at the time of granting the loan and may be treated as provisional and not final.
  • Loan Applicant/Borrower is required to repay the loan along with interest on or before the completion of loan tenure, as specified in the pawn ticket from the date of disbursement. However, the Loan Applicant/Borrower shall have the option to foreclose the loan at any time during the currency of the loan by paying the principal loan amount along with interest and other charges. Similarly, the Company may, at its sole and absolute discretion, have the right to further extend the tenure of the loan for such periods.
  • If full repayment of the loan, along with interest and charges, is not made within the period of the loan or within such period as demanded by the Company, the Company shall have the right to sell or otherwise dispose of the Gold through public auction at the risk and cost of the Loan Applicant/Borrower. The Loan Applicant/Borrower, out of his/her free will, authorizes the Company to dispose of the Gold by public auction at any time adjust from the net proceeds of such sale, all amounts, including interest and other charges, due to the Company in respect of the loan. If there is any surplus on such sale, the Company shall have the right to appropriate such surplus towards any other liability of the Loan. Applicant/Borrower, solely or jointly with others, on any account whatsoever, to the Company at any of its offices. The net surplus, if any, after such appropriation, shall be refunded to the Loan Applicant/Borrower. In case of any shortfall after disposal of the Gold, the Company shall have the right to resort to legal proceedings against the Loan Applicant/Borrower to recover the shortfall.
  • The Company may effect changes prospectively in the interest rate, charges etc. after due intimation to the Loan Applicant/Borrower. The Loan Applicant/Borrower undertakes to settle the loan within 7 days of the date of such intimation in case the revised rate of interest, charges etc., as intimated by the Company, are not acceptable to the Loan Applicant/Borrower.
  • Notwithstanding anything referred above, if the Company is convinced, at its sole discretion, that the estimated realizable value of the gold at any time is less than the total amount due by way of principal, interest and other charges on this loan or on any other loans availed by the Loan Applicant/Borrower at any of the branches of the Company or there exists any other circumstance, which in the sole opinion of the Company, is prejudicial to the interest of the Company, the Company reserves the right to sell the gold by public auction at any time during the currency of the loan after serving a registered notice to the Loan Applicant/Borrower.
  • The address for all communications to the Loan Applicant/Borrower shall be the one furnished in the loan application form by the Loan Applicant/Borrower. Unless any change of address is duly intimated by the Loan Applicant/Borrower to the Company in writing and duly acknowledged, any communication sent to the Loan Applicant/Borrower in the address furnished in the loan application shall tantamount to valid receipt / acceptance of the communication sent by the Company. The Loan Applicant/Borrower shall also keep the Company duly intimated about any changes in the recorded landline phone or mobile phone number to facilitate communications. The Borrower/Loan Applicant understands and agrees that the Company may contact the Loan Applicant/Borrower over phone to pass on transactional as well as promotional communication and the Loan Applicant/Borrower consents for the same. It is also understood and agreed by the Loan Applicant/Borrower that such conversation may also be recorded by the Company for future use.
  • In the event the Loan Applicant/Borrower fails to produce the pawn ticket at the time of settlement, the Company may, at its sole discretion, deliver the pledged Gold of the Loan Applicant/Borrower after completion of the prescribed formalities and subject to payment of processing charges, as may be applicable from time to time.
  • The Company shall have the right to exercise lien on the Gold offered as security for this loan to secure the repayment of any other liability of the Loan Applicant/Borrower to the Company, which is due and payable, until such other liability is also fully settled. Exercise of such lien will be duly intimated to the Loan Applicant/Borrower by letter, email, SMS, telephone or any other mode of communication.
  • The Loan Applicant/Borrower shall bear, pay and reimburse all charges relating to administration, interest tax, service tax, duties (including stamp duty), sales tax/VAT and taxes (of any description as may be levied by the Government or any other authority from time to time) and all other costs and expenses whatsoever in connection with (a) application for and the grant and repayment of the Loan; (b) recovery and realization of the loan together with interest; (c) enforcement of Security ; (d) clearance of arrears of all taxes and any other charges and levies of the Government in respect of Security and (e) insuring the Security.
  • Every borrower is entitled to receive back the securities offered for the loan. However if the borrower has any other liability with the company, the company reserves the right to release the securities. A lien of the above order will be exercised only after giving due notice to the borrower.
  • In the event of loss of pledged Gold due to theft, burglary or for any other reasons from the custody of the Company, the liability of the Company shall be limited to replacing the lost Gold with equal net weight as mentioned in the loan application form / pawn ticket.
  • The Company shall have the right to assign or transfer or securitize the rights to obtain necessary advance or financial facility from any Bank or Financial Institution or other organizations or for any other lawful purpose, at any time during the currency of the loan.
  • All branches shall have proper storage facility of either Strong Rooms or Safes conforming to ISI Standards of approved make to store the jewellery in safe custody. The keys to the strong room/safe shall be held separately by two officials and the operations thereof shall be done jointly. The staff shall be imparted training on a continuous basis to ensure that the guidelines covering security issues are strictly adhered to. The gold items shall be periodically inspected by the internal auditors to ensure quality, quantity and proper storage. The jewellery accepted as collateral security shall be approximately insured.
  • Any fraud in the functioning of the Company shall be enquired into by the appropriate authority and suitable punitive measures shall be taken by the appropriate authority. Any review of the decision of the appropriate authority shall be carried out by the Managing Director.

Company have a board approved auction policy which has been summarised as below.

  • The Company will resort to disposal of security (gold) only as a last resort and that too after adequate and proper notice is served on the customer to repay the dues. Such notice will be as per the terms contained in the sanction letter (pawn ticket) and also in compliance with applicable laws and regulatory guidelines. The disposal of the security (gold) will be taken up through public auction when the customer does not positively respond to the communications sent by the Company to close the loan account along with interest and other charges. The auction procedure shall be transparent. Prior notice will be given to customer by Registered Post/Courier informing about the auction. The auction shall be announced to the public by issuing advertisements in at least two newspapers, one in vernacular language and another in national daily newspaper, describing the date of auction, venue of auction, and the details of gold etc. Auction will be conducted by an approved auctioneer appointed by the Board of Directors of the Company and the Company will not participate in the auction. The amount due to the Company by the customer, being the aggregate of the principal and upto the date of interest as well as other expenses like expenses for conducting auction, will be adjusted against the sale proceeds, whereas the surplus, if any available, will be refunded to the customer, and deficit if any shall have to be paid by him/her. The company or its associate concerns will not participate in the auction.
  • Legal action for recovery of shortfall in individual accounts from the borrower will also be considered at the Company’s discretion.

Approved in board meeting dated 09.06.2016.

Mathew K. Cherian
Managing Director

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