Fair Practice Code (FPC)

Preamble

Oriental Finstock Services Private Limited (“the Company” or “Oriental Finstock”) is committed to regularly reviewing and updating its Fair Practice Code (FPC) in accordance with the Reserve Bank of India’s Master Direction – Non-Banking Financial Company – Scale Based Regulation Directions, 2023 (latest as of November 10, 2023). The Board of Directors is responsible for formulating and implementing this Code, ensuring alignment with RBI guidelines. Oriental Finstock provides a range of financial products including Personal Loans, Business Loans, Loans Against Property, Equipment Loans, Channel Finance, and Corporate Loans.

1. Objective of the Code

• Ensure customers receive all necessary information, terms, and conditions to make informed decisions before availing any loan or investment product.
• Maintain transparency in calculation of interest and charges, and clearly specify default events and their consequences.
• Establish minimum standards for fair customer dealings.
• Enhance transparency so customers understand the expected service levels.
• Foster customer trust and confidence in the Company.
• Establish a robust Grievance Redressal Mechanism.

2. Non-Discrimination

Oriental Finstock does not discriminate based on age, race, caste, gender, marital status, religion, or disability.

Principles of Fair Practice

1. Loan Applications and Processing

   1. Loan application forms will provide all relevant information, allowing customers to compare terms with other lenders.
   2. Required documentation will be clearly listed.
   3. Applicants will receive an acknowledgement of their application, including an indicative processing timeline.
   4. All communication will be in a language the borrower understands.

2. Loan Appraisal, Terms, and Key Fact Statements

   • Sanction letters will detail the loan amount, terms, annualized interest rates, and penalties (highlighted in bold), in a language understood by the borrower.
   • The Company will maintain clear internal policies for determining interest rates and charges.
   • Borrowers will receive copies of the loan agreement and all referenced documents.
   • The Company will adhere to the RBI’s Key Facts Statement (KFS) requirements.

3. Penal Charges

   1. Any penalty for non-compliance with loan terms will be treated as a penal charge, not as penal interest, and will not be capitalized.
   2. No additional component will be added to the interest rate.
   3. The quantum of penal charges will be reasonable, non-discriminatory, and clearly disclosed in agreements and on the Company’s website.
   4. Borrowers will be notified of penal charges at the time of any non-compliance.
   5. New penal charge guidelines apply to all new and renewed loans from April 1, 2024, and to existing loans by June 30, 2024.

4. Disbursement and Changes in Terms

   • Borrowers will be notified in advance (in a language they understand) of any changes in terms, including interest rates and charges, which will only apply prospectively.
   • Security will be released promptly upon loan repayment, subject to any legitimate claims. Borrowers will be notified if any right of set-off is exercised.

5. Release of Property Documents

   1. Original property documents will be returned and charges removed within 30 days of full loan repayment.
   2. Borrowers can choose the location for document collection.
   3. Procedures for document release in the event of the borrower’s demise will be published on the Company’s website.
   4. Delays attributable to the Company will result in compensation of ₹5,000 per day of delay.
   5. The Company will assist and bear costs for obtaining duplicates in case of document loss.

6. Floating Rate Loans

   • At sanction, borrowers will be informed of the potential impact of interest rate changes on EMIs or loan tenor.
   • Borrowers will have options to switch to fixed rates, adjust EMIs or tenor, or prepay (subject to applicable charges).
   • Quarterly statements will detail principal, interest, EMIs paid and remaining, and the annualized rate.
   • These provisions apply to all equated installment loans.

7. General Conduct

   1. Oriental Finstock will only intervene in borrower affairs as per the loan agreement or if new relevant information arises.
   2. Requests to transfer loans to other lenders will be responded to within 21 days.
   3. Recovery practices will be fair, legal, and respectful.
   4. No foreclosure or prepayment penalties will be charged on floating rate loans for non-business individual borrowers.
   5. The Code will be available in languages understood by borrowers and published on the Company’s website.
   6. The Code will be reviewed periodically.

8. Repossession of Assets

   • The loan agreement will contain a clear, legally enforceable repossession clause.
   • The repossession process will be transparent, including notice issuance, procedures, and borrower rights.

9. Grievance Redressal

   1. A toll-free helpline and dedicated email will be provided for customer complaints.
   2. The Company aims to respond within 15 working days and will inform customers of escalation options.
   3. Turnaround times for complaint resolution will be set for each product.
   4. Contact details of grievance officers and RBI officials will be prominently displayed.
   5. The grievance redressal mechanism and FPC will be periodically reviewed and reported to the Board.

10. Interest Rate and Charges Policy

    • The Board will adopt and periodically review a transparent policy for determining interest rates and charges, which will be published on the Company’s website.

11. Support for Differently-Abled Customers

    1. No discrimination will be made against physically or visually challenged applicants.
    2. All branches will assist such customers, and staff will be trained on their rights.
    3. Grievances from differently-abled persons will be addressed as per the grievance mechanism.

12. Key Commitments

    Oriental Finstock will:

    • Act efficiently, fairly, and diligently in all dealings.
    • Ensure compliance with all relevant laws and regulations.
    • Provide professional, courteous, and prompt service.
    • Disclose all terms, conditions, and costs accurately and timely.
    • Help customers understand products, explain implications, and assist in product selection.
    • Ensure all marketing material is clear and not misleading.
    • Address and correct mistakes promptly, including reversing charges if necessary.

13. Digital Lending

    • Names of digital lending partners will be disclosed on the Company’s website.
    • Digital agents must identify themselves and the Company to customers.
    • Sanction letters and agreements will be provided directly to the borrower.
    • The Company will oversee and monitor digital lending platforms and raise awareness of the grievance process.

14. Miscellaneous

    • This Code will be reviewed and updated as necessary by the Board.
    • The Fair Practice Code will be published on the Company’s website once operational.