FAIR PRACTICES CODE
As per Directions of Non-Banking Financial Company – Peer to Peer Lending Platform (Reserve Bank) Directions, 2017 “Non-banking financial company – Peer to Peer Lending Platform” (NBFC-P2P) are required to put in place and implement Fair Practices Code (“FPC”) based on the prescribed minimum standards when dealing with Participants and to serve as a part of best corporate practice.
“Participant” means a person who has entered into an arrangement with an NBFC-P2P to lend on it or to avail of loan facilitation services provided by it;
“Non-banking financial company – Peer to Peer Lending Platform” (NBFC-P2P) means a non-banking institution which carries on the business of a Peer to Peer Lending Platform
It is, and shall be, our policy to make loan products available to all qualified applicants with out discrimination on the basis of race, caste, color, religion, sex, marital status or handicap. Our policy is to treat all the customers consistently and fairly. Our employees will offer assistance, encouragement and service in a fair, equitable and consistent manner. We will also communicate our Fair Practices Code to our participants by placing it on the company’s website.
We shall ensure that charges / fees are appropriately informed to the participants. Terms and conditions pertaining to the facility will be conveyed to the prospective lenders and borrowers. We commit that disputes arising out of the lending decisions will be appropriately resolved by a grievance redressal mechanism set up by us.
The Company’s Fair practices shall apply across all aspects of our operations including marketing, loan origination, processing, servicing and collection activities. Our commitment to Fair Practices Code would be demonstrated in terms of employee accountability, monitoring and auditing programs, training and technology.
The Company’s Board of Directors and the management Team is responsible for establishing practices designed to ensure that our operations reflect our strong commitment to fair lending and that providing service of the highest quality to its clients.
1. Applications for loans and their processing
- The Company shall have Loan applications processed based on the mutual consent of the participants and loan application forms will include necessary information, which affects the interest of the borrower/Lender; the terms and conditions offered by other lenders can be made and informed decision can be taken by the borrower. The participants shall be required to undergo fully automated process of registration as Borrowers/Lenders and submit the lending loan application/commitment as may be applicable.
- This involves profile verification for each and every listing. Personal, professional and financial data are collected and verified to the best extent possible from all available data sources such as government data bank, credit information bureau, social media etc. Due care shall be taken to safeguard the interests of both the borrowers and the lenders through stringent verification process.
- The borrower is required to upload all relevant documents into the portal, which may be verified by Oxyloans through an eKYC and Aadhar validation, wherein the Identity and Address of the customer are verified electronically through Aadhaar authentication. Oxyloans shall determine “Oxy score” based on Experian Credit Score and Profile completeness score. Based on the credit risk assessment, Oxyloans shall offer the best interest rate available from the lenders and Processing fee will be levied as applicable
- Loan Application form will clearly state the information that the company requires to collect from the participants to fulfill the KYC norms and to comply with legal and regulatory requirements. We may request for additional information about the borrowers to undertake credit assessment and risk profiling of the borrowers and disclose the same to their prospective lenders.
2. Loan appraisal and terms/conditions
- OxyLoans devised online system with set of rules for matching lenders with borrowers in an equitable and non-discriminatory manner. The loan shall be disbursed after individual lender/s have approved the individual recipient/s of the loan and all concerned participants have e-signed the loan contract, the amount of loan agreed along with the terms and conditions including annualized rate of interest and keeps the acceptance of these terms and conditions by the borrower on its record.
- The loan sanction letter and all communications to the borrower shall be in the English language or a language understood by the borrower.
- Company shall obtain explicit affirmation from the lender stating that “he/ she has understood the risks associated with the proposed transaction and that there is no guarantee of return and that there exists a likelihood of loss of entire principal in case of default by a borrower”. The platform shall not provide any assurance for the recovery of loans. Further, the platform will display a caveat that “Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by the NBFC-P2P, and do not provide any assurance for repayment of the loans lent on it”.
- The company shall not facilitate or permit any secured lending linked to its platform (i.e) only clean loans will be permitted.
3. Disbursement of loans including changes in terms and conditions
- The company shall provide assistance to participants in disbursement and repayments of loan amount and render services for recovery of loans originated on the platform. Fund transfer between the participants on the Peer to Peer Lending Platform shall be through escrow account mechanisms which will be operated by a trustee.
- Two escrow accounts, one for funds received from lenders and pending disbursal, and the other for collections from borrowers, shall be maintained. All fund transfers shall be through and from bank accounts and no cash transactions are permitted.
- The company will give notice to the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges etc. We will also ensure that changes in interest rates and charges are effected only prospectively. A suitable condition in this regard will be incorporated in the loan agreement.
- Changes in the interest rates and other charges shall be effected prospectively other than under circumstances arising from regulatory instructions. Retrospective changes shall as far as possible be avoided and shall be implemented only within the framework defined in the Loan Agreements.
- Penal interest to be charged for late repayment in bold in the loan agreement.
- Decision to recall / accelerate payment or performance under the agreement will be in consonance with the loan agreement.
- The Company shall keep the credit information (relating to borrower transactions on the platform) maintained by it, updated regularly on a monthly basis or at such shorter intervals as may be mutually agreed upon between the Company and the Credit Information Companies;
- (b) Company shall disclose the following:
To the lender
(a) details about the borrower/s including personal identity, required amount, interest rate sought and credit score as arrived by the NBFC-P2P.
(b) details about all the terms and conditions of the loan, including likely return, fees and taxes; >
To the borrower – details about the lender/s including proposed amount, interest rate offered but excluding personal identity and contact details;
- Unless authorized by the customer, we will not reveal transaction details to any other entity including other than the following exceptional cases:
- If we have to provide the information by statutory or regulatory laws
- If there is a duty to the public to reveal this information
- If our interest requires us to provide this information (e.g. fraud prevention) to Banks / Financial Institutions / Our Group and Associate Companies.
- iv. We will not use this reason for giving information about customers to anyone else for marketing purposes.
- The company will 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 the notice of the lender).
- In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise i.e. objection of the company, if any, will 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.
- In the matter of recovery of loans, the Company will ensure that the staff are adequately trained to deal with the participants in an appropriate manner and shall not resort to harassment viz; persistently bothering the borrowers at odd hours, use of coercion for recovery of loans, etc.
- For recovery of loan, SLPL shall follow procedures as laid down in the internal guidelines and provisions and would remain within the legal framework.
- The Company shall ensure that its employees are adequately trained to deal with customers in an appropriate manner.