FAIR PRACTICE CODE

(Reviewed by the Board on December 18, 2025)

Introduction

The Fair Practice Code (FPC) of Kosamattam Finance Limited has been prepared to take into account the “Guidelines on Fair Practices Code for NBFCs” issued by the Reserve Bank of India and is updated from time to time and aims to ensure better service quality and bring in transparency in its loan process and enable customers to take informed decisions in respect of the facilities and services offered by the company. FPC will be applicable for all branches and offices of Kosamattam Finance Limited including the head office. 

Fair Practice Code

Objectives

1. Adopt the best practices followed by entities in the financial and similar service sectors while dealing with customers.
2. Provide all necessary information and input to customers / prospective customers and promote a mutually beneficial long-term relationship.
3. Enable customers to make informed decisions about the financial facilities and services offered by the Company.
4. Follow transparent, fair, ethical, and legally tenable practices while conducting business.
5. Enable customers to have a better understanding of what they can reasonably expect of the services offered by the Company.
6. Set challenging benchmarks and strive to achieve high operating standards for ensuring customer satisfaction.

i. 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 that affects the interest of the borrower so that a meaningful comparison with the terms and conditions offered by another lender can be made and an informed decision can be taken by the borrower.

If any additional documents/information are required from the Customer, the same shall be communicated to the Customer immediately. In the case of gold loans which are sanctioned an acknowledgment will be given to the applicant. 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.

ii. Loan appraisal and terms/conditions

Company will convey to the borrower in vernacular language as understood by the borrower, the amount of the loan along with the terms and conditions including annualized rate of interest and method of application thereof before sanctioning the loan. An acknowledged copy of the sanction letter shall be kept as part of the loan document.  Any penal interest that shall be collected will be shown in bold in the loan agreement.

iii. Disbursement of loans including changes in terms and conditions

• The loan shall be disbursed on executing the necessary documents and completion of the formalities regarding creating a charge over the security offered by the borrower. Any change in the terms and conditions including interest rates, service charges, prepayment charges, etc. shall be informed to the borrower in the vernacular or a language known to the borrower. Any changes in interest rates and charges effected shall be only prospective. A suitable condition in this regard shall be incorporated in the loan document obtained from the borrower.
• Decision to recall/accelerate payment or performance shall be as per the covenants in the loan document.
• The Company shall release all securities on repayment of all dues or on the realization of the outstanding amount of loan 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 be exercised, the borrower shall 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.
• 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. Company may obtain the acknowledgement of receipt of token from the customer in the pledge form.

iv. Rate of Interest

• The Company shall frame appropriate internal policies and procedures for determining the interest rates and processing and other charges, if any, and also 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 loans and advances are in strict adherence to above referred internal policies 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.
• The interest shall be calculated for the actual number of days the loan remains outstanding from the date of loan disbursement to the date of closure. However, suppose the borrower closes the loan within 7 days from the date of disbursement. In that case, a minimum interest for 7 days shall be payable for gold loan, If the amount of interest so calculated is less than Rs.50/- then a minimum interest of Rs.50/- will be charged. A rebate in interest rate may be provided to encourage timely repayment of interest or closure of the loan on or before the specified tenor as per different slabs built into each scheme.
• The information published on the website and notice board shall be updated as per the present gold schemes.
• Different rates of interest to different schemes shall be disclosed in the application form and also communicated explicitly in the sanction letter issued to the borrower.
• Rebate on interest rates meant to encourage timely periodical payment of interest under each scheme, levying of additional interest for discouraging loans from crossing the sanctioned period, etc., shall be mentioned clearly in the loan agreement/ pledge form.
• No pre-payment penalties/foreclosure charges will be levied on gold loans in the normal course. In case such charges are applicable for any scheme, it will be disclosed in the sanction letter.
• Changes in Rate of Interest shall be effected prospectively.

v. General 

• Company should not interfere 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 a request from the borrower for transfer of borrowal account, the consent or otherwise i.e., Objections 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 l terms in consonance with law. However, the transfer is not allowed in the case of a 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. ln case of any such activity it shall be informed in our registered office.  Further, the Company also ensures that the staff are adequately trained to deal with the customers in an appropriate manner.

vi. Responsibility of the Board of Directors

 The company has a Customer Grievance Redressal Forum at the Senior Management Level. All the disputes arising out of the functionaries are heard and disposed of to a 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 a periodical review of compliance with the Fair Practice Code and the functioning of the grievance’s redressal mechanism at various levels of management.

vii. Customer Grievance Redressal Mechanism

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. For this purpose, we prominently display the name and contact details of the Grievance Redressal Officer and Officer in Charge of the Regional Office of DNBS, RBI in all our branches. If at any stage, a customer is not satisfied with the service given to him/her, he/she can contact the Company.

Step 1:

Please visit the nearest Branch of our Company and submit your complaints/grievances and get your complaint logged in the "Complaint & Grievance Register" maintained at the branches (During working hours from 9:00 A.M. to 5:30 P.M.) or contact 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, E-mail, fax, or call the Grievance Redressal Officer of the Company :

The Grievance Redressal Officer
Kosamattam Finance Limited,
Kosamattam City Centre,
Fourth/Fifth Floor,
T. B. Road, Kottayam 
Ph: 0481-2586400
Email id: grievance@kosamattam.com

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 the regulatory authority of Non- Banking Financial Companies, i.e..... Reserve Bank of India for redressal of your complaints at the below address:

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

The contact details of the Grievance Redressal Officer and also that of the designated officer as per the RBI integrated Ombudsman Scheme / Regional Office of the Reserve Bank of India shall be displayed in all the Branches for the benefit of customers.

Wherever the decision of the NBFC, after careful examination of the complaint, is to reject the complaint partly or wholly, it shall be intimated to the complainant only after obtaining the approval of the Internal Ombudsman (IO) of the NBFC appointed as per RBI guidelines.

Proper training shall be imparted to staff on an ongoing basis with a view to improving staff behavior and customer service.

The compliance of the Fair Practices Code as well as the functioning of the Customer Grievances Redressal Cell shall be reviewed by the Grievance Redressal Officer on a quarterly basis and a consolidated report of such reviews shall be placed before the Board of Directors.

Customers can also avail the Integrated Ombudsman Scheme in order to address their complaints as provided on the website of the Company (Website: www.kosamattam.com)

viii. 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 determining 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 website of the company or published in the relevant newspapers. The information published on the website or otherwise published will be updated whenever there is a change in the rates of interest.

The rate of interest should be annualized rate so that the borrower is aware of the exact rates that would be charged to the account.

Lending against the collateral of gold jewellery, ornaments.

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

(i) The company has a board-approved policy covering the following:

(a) Customer has to produce the Proof of identity, (namely, election identity card, Aadhar, passport, driving license, PAN Card, etc.) and other such documents demanded by the Company. The 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 the loan.

(b)  The maximum tenure of the bullet payment loan is up to 12 months, O.D and other type of regular interest or principal payment loan is upto 24 month. The Company will make only a preliminary verification of the Gold at the time of pledge 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.

(c) The loan is based on the weight, purity of the Gold, and adjusted market value.

(d) The Company shall have the right to make disclosure to Credit Information Companies or other similar agencies.

(e) 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.

(f) 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 loans and advances are in strict adherence to the above-referred internal principles and procedures.

(g) 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.

(h) 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. Interest will be charged on the daily balance outstanding at monthly rest on the basis of the actual number of days from the date of availing the loan to the date of closure of the loan. Interest will be payable from the date of the loan till the account is closed, both dates inclusive. Rebate on interest rates meant to encourage timely periodical payment of interest under each scheme, levying of additional interest for discouraging loans from crossing the sanctioned period, etc., shall be mentioned in the loan agreement. Penal interest if any, will be communicated to the customer, and the same will be mentioned in the pawn ticket.

(i) The postage charges, as revised from time to time at the discretion of the Company, shall be recovered from the respective account.

(j) The information related to the rate of interest published on the website shall be updated whenever there is a change in the rates.

(k) 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 I 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 carats are based on the preliminary verification made at the time of granting the loan and may be treated as provisional and not final.

(l) The 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.

(m)  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.

(n)  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.

(o)   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.

(p) 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 the 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.

(q) 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.

(r)   The Company shall have the right to exercise a 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.

(s)   The Loan Applicant/Borrower shall bear, pay and reimburse all charges relating to administration, interest tax, duties (including stamp duty), GST 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.

(t)   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.

(u)   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.

(v)  The Company shall have the right to assign 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.

(w)  All branches shall have proper storage facilities of either Strong Rooms or Safes conforming to ISI Standards of approved make to store the jewelry 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 jewelry accepted as collateral security shall be approximately insured.

(x)  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.

(y)  The branch officials has to conduct due diligence and make a report on all applicable cases Field Verification Report (FVR) to asses the ownership of the gold and examining the repaying capacity.

(z)  Company is not providing misleading advertisements, such as claiming loan approvals in 2-3 minutes.

(aa)  All loan agreements shall be accompanied by a Key Fact Statement (KFS), clearly disclosing the annualized interest rate, processing fees, and other charges in a standardized format as per the RBI Guidliness.

(bb)  The company while accepting the eligible collateral will issue a certificate regarding the assay of the collateral and state therein the purity(in terms of carats); gross weight of the eligible collateral pledged: net weight of gold or silver content therein and deductions, if any, relating to weight of stones, lac, alloy, strings ,fastenings, etc; damage, breakage or defects, if any, noticed in the collateral; image of the collateral; and the value of collateral arrived at the time of sanctions.  Certificates will be provided via text message. If the customer requests a hard copy, then a hard copy of the certificate will be provided.

(cc) The company for valuation only the intrinsic value of the gold contained in the eligible collateral shall be reckoned and no other cost elements, such as precious stones or gems, shall be added thereto.

(dd) Company shall ensure the aggregate weight of ornaments pledged for all loans to a borrower shall not exceed 1 kilogram for gold ornaments and the aggregate weight of coins pledged for all loans to borrower shall not exceed 50 grams in case of gold coins.

(ee) Purity of the gold is appraised by the branch staff at the time of pledge through Acid, Sound, Weight test etc…

(ff)  The pledged gold collateral lying with the company beyond two years from the date of full repayment or settlement of loan shall be treated as unclaimed. The Company shall periodically undertake special drives to ascertain the whereabouts of the  borrower(s)/ legal heir(s) in respect of such unclaimed gold and silver collateral. A report on unclaimed gold collateral shall be put up to the Customer Service Committee or the Board, as the case may be, at half-yearly intervals for a review.

(gg) The company shall conduct periodic training to the staff to provide the updates of regulatory authorities.

(hh) The recovery of the gold loan through bank/ cash payments, Finco. App, website and QR code. Company have no recovery agents.

(ii) The Company will compensate the borrower(s) at the rate of ₹5,000 for each day of delay for exceeding 7 working days upon full repayment or settlement of the loan and compensation of ₹100 per calendar day in case their complaint is not resolved within a period of thirty calendar days from the date of the initial filing of the complaint.

(jj)Standard Operating Procedures (SOPs) prepared under the policy shall cover the conduct related aspects relating to the assaying procedure.

(kk) The Company shall not discriminate in extending products and facilities including loan facilities to physically/visually challenged applicants on grounds of disability. All branches of the Company shall render all possible assistance to such persons for availing of the various business facilities. The Company shall include a suitable module containing the rights of persons with disabilities guaranteed to them by the law and international conventions, in all the training programs conducted for their employees at all levels.

Handling and Storage of Collateral

The Company shall ensure that necessary infrastructure and facilities are put in place and appropriate security measures taken in each of its branches where loans are sanctioned against gold collateral and the gold collateral is handled only in its branches and only by its employees. Company shall store the collateral only in its branches which are manned by its employees and having safe deposit vaults fit for storing gold.

The pledged eligible collateral may be transported from one branch to another branch, only as permitted under paragraph 41 below or in case of shifting or closure of branch(es) or exceptional reasons as per the process laid down by the lender in terms of its policy. The Company shall periodically review the adequacy of systems for storage of the eligible collateral, conduct training of the concerned staff and carry out internal audit of all procedures to ensure that these are strictly adhered to.

As part of internal audit, a lender shall carry out periodic surprise verification of the gold and silver collateral pledged with it and shall maintain a record thereof. A clause in the loan agreement shall be included for obtaining consent of the borrower(s) to carry out surprise verification including assay of the pledged eligible collateral even in their absence during the tenor of the loan.

Release of Collateral after Repayment

The Company shall release or return the pledged eligible collateral held as security to the borrower(s)/ legal heir(s) on the same day but in any case, not exceeding a maximum period of seven working days upon full repayment or settlement of the loan. 

At the time of release of pledged eligible collateral to the borrower(s)/ legal heir(s), the collateral shall be verified for correctness as per details in the certificate to the borrowers’ satisfaction.

(ii) The company has a board-approved auction policy which has been summarized 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 customers by Registered Post/Courier informing them 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 a national daily newspaper, describing the date of the auction, the venue of the auction, and the details of the gold, etc. The auction will be conducted by an approved auctioneer appointed by the Board of Directors of the Company and the Company and the related parties will not participate in the auction. The amount due to the Company by the customer, being the aggregate of the principal and up to the date of interest as well as other expenses like expenses for conducting the auction, will be adjusted against the sale proceeds, whereas the surplus, if any available, will be refunded to the customer within a maximum period of seven working days from the date of receipt of full auction proceeds, and deficit if any shall have to be paid by him/her. The company will issue notices to borrowers who are eligible for a refund by intimating them to approach the respective branch of receipt of this notice to collect the refund amount if it is less than Rs 50,000 or by submitting the bank account details of the borrower so as to make the payment by an account payee bank draft, account payee cheque, or through an electronic clearing system via bank and after the said period of 30 days, the auction surplus will be transferred to a separate escrow account and the company will make the further refund payment only from this account. 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.

Legal action for recovery of shortfall in individual accounts from the borrower will also be considered at the Company's discretion.

For Kosamattam Finance Ltd
Mathew K Cherian
Managing Director