The Companyâ€™s business would be conducted in accordance with prevailing statutory and regulatory requirements. In addition, the Company would adhere to the guidelines issued by the Reserve Bank of India on Fair Practices Code vide its circular No. DNBS.CC.PD.No.320/03.10.01/2012-13 dated February 18, 2013 in its functioning, the key elements of which are as follows:
Applications for loans and their processing
Loan appraisal and terms/conditions
Disbursement of loans including changes in terms and conditions
Post Disbursement Monitoring
1. Applications for loans and their processing
- Loan application forms alongwith the documents required pertaining to various loan products will be made available on SICOMâ€™s website for downloading by the applicant. Any changes in the formats of the loan products or introduction of new products will be updated on the website within a week.
- All the loan applications received will be acknowledged on the same day. On receipt of the loan applications, the borrower will be indicated the approximate date by which the applicant should call on SICOM for preliminary discussions if deemed necessary. During this meeting, the applicant will be given the details of additional information / particulars that may be required to process the application. Depending on the type and quantum of the assistance sought, the approximate time for processing ( which will be less than 4 to 6 weeks on receipt of complete information.) will be indicated to him.
- In case the proposal is not acceptable, the borrower would be communicated orally and will have the option to know the reasons of rejections in writing or to withdraw the application.
2. Loan appraisal and terms/conditions
- In accordance with SICOMâ€™s credit policy norms and risk based assessment procedures, each loan application will be appraised after carrying out proper due diligence..
- The standard terms and conditions will be discussed with the borrower. These mutually discussed terms and conditions will be put up to the sanctioning authority. Any modifications / additions / deletions indicated by the sanctioning authority will be communicated to the borrower. The Sanction letter will be released to the borrower upon payment of processing fees as applicable.
- The acceptance of these terms and conditions by the borrower will be kept on record
- The Company shall mention the penal interest charged for late repayment in bold in the loan agreement
3. Disbursement of loans including changes in terms and conditions
- On execution of loan documents and compliance of conditions governing such sanction, the disbursement will be made in accordance with the eligibility for drawal and the withdrawal schedule indicated by the borrower.
- Any change in the terms and conditions including interest rates, prepayment charges etc. will be informed individually to the borrowers.
- Changes in interest rates and other charges will be effected prospectively.
4. Post Disbursement Monitoring
- The borrower will be required to submit a progress report on Monthly / Quarterly basis. Monitoring the performance of the borrower will be based on these progress reports or through visits or through appointment of an Nominee Director / Observer as per the covenants of the loan agreement.
- Decisions to recall / accelerate repayment will be taken as per the covenants of the loan agreement.
- All securities will be released on repayment of all the dues or on realisation of the outstanding amount of loan subject to any legitimate right or lien for any other claim against the borrower. If such right of set off is to be exercised, the borrower will be given prior notice about the same with full particulars about the remaining claims and the conditions.
- SICOM would refrain from interference in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement (unless new information, not earlier disclosed by the borrower, has come to our notice).
- In case of receipt of request from the borrower for premature repayment, the consent or otherwise i.e. our objection, if any, will be conveyed within 30 days from the date of receipt of such request.
- In the matter of recovery of loans, SICOM will follow the due process of law.
- All communications to the borrower shall be in the vernacular language or a language as understood by the borrower
- The company has adopted an interest rate model taking into account relevant factors such as, cost of funds, margin and risk premium, tenure etc to determine the rate of interest to be charged for loans and advances.
- The Board would review the functioning of Fair Practices Code and Grievance Redressal mechanism once in a year.