Policies 2014

(A) INTRODUCTION

The Reserve Bank of India has released the final guidelines of the Fair Practices Code (FPC) for NBFCs, asking them to implement the fair practices and to post the same on the websites to cater to shareholder's information requirements. The code prescribes fair practice standards while dealing with the customers and to serve in the best interests of the company. The Code is applicable to all aspects of operations of the company. It shall be our policy to make our services available to all qualified applicants without discrimination of any kind and to treat our customers fairly. We offer all sorts of assistance and encouragement in a fair, equitable and consistent manner.

We are committed to ensure that our charges are properly and timely informed to the existing and prospective borrowers. Disputes, if any; will be resolved by our Grievance Redressal Department. We shall ensure employee accountability at all levels of our operations. The Board and senior management will be responsible to ensure our commitment to fair and reasonable practices as also to ensure high quality services to our clients.

(B) OBJECTIVES

The objectives of the Policies are as under:

1. Adopt the best practices in dealings with customers.

2. Set challenging benchmarks and strives to achieve high operating standards for ensuring customer satisfaction.

3. Follow transparent, fair, ethical and legally tenable practices while conducting business.

4. Provide all necessary information and inputs to customers / prospective customers and promote a mutually beneficial long term relationship.

5. Facilitate a continuously growing base of satisfied customers while scrupulously avoiding acquisition of customers having doubtful credentials or criminal background.

(C) APPLICATIONS FOR LOANS AND THEIR PROCESSING

1. All major communications to their borrower will be in the vernacular language.

2. All the customers will be provided with a unique customer ID.

3. Loan application form will include necessary information which affects the interest of the borrower.

4. The Company will devise a system of giving acknowledgment for receipt of all loan applications.

(D) LOAN APPRAISAL AND TERMS/ CONDITIONS

A. Business Loan

1. The Company will convey the borrower the amount of loan sanctioned along with the terms and conditions including annualized rate of interest and method of application. The Company will furnish a copy of loan agreement preferably in the vernacular language at the time of sanction of loan.

2. Interest on business loan-varies from 4% to 33%

3. The company will charge penal interest for late payment and details will be incorporated in loan agreement in bold letters.

B. Gold Loan

1. All gold loan application should be immediately processed and the gold pledged as security should be properly appraised for its purity, by a Company approved appraiser before extending the loan. Existing debts of the borrowers should be analyzed before sanctioning of the loan.

2. The company will ensure that KYC guidelines stipulated by RBI are complied with and adequate due diligence are carried out.

3. The company will implement adequate systems for storing the jewellery in safe custody, review the systems on an on-going basis, train the concerned staff and periodic inspection by internal auditors to ensure that the proce- dures are strictly followed.

4. The loan facility should be extended strictly to the genuine owner of the gold pledged only and should not be extended to any other person.

5. Loan agreement should be prepared in vernacular language or in a language understood by the borrower. Loan agreement should contain the Amount of loan sanctioned, Annual rate of interest, Other charges & levies, Description of the gold pledged, Gross weight and net weight of each item, Procedure regarding the auction of gold pledged and all other terms & conditions of the loan sanctioned. The acceptance of the terms and conditions mentioned in the loan agreement by the borrower should be obtained and kept in record.

6. The rate of penal interest charged in the event of late repayment / non repayment of loan should be indicated in bold letters in the loan agreement.

7. Interest on Gold loan – Varies from 8% to 36%

(E) DISBURSEMENT OF LOANS INCLUDING CHANGES IN TERMS AND CONDITIONS

A. Business Loan/ Term Loan

1. The Company will give notice to the borrower of any change in the terms and conditions including disbursement schedules, interest rates, service charges, etc. The company will ensure that changes in interest rates and changes are affected only prospectively. A suitable condition in this regard will be incorporated in the loan agreement.

2. Decision to recall payment or performance under the agreement will be in consonance with the loan agreement.

3. The company has the option to devise loan products with, with out or partial charging on movable or immovable assets of the customer.

4. The company will release all securities on repayment of all dues 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 will 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.

B. Gold Loan

1. On disbursement of the loan, pawn tickets should be prepared in duplicate and one copy has to be issued to the borrower and the duplicate copy should be retained in the office after obtaining the signature of the bor- rower.

2. Jewellary accepted as collateral will be appropriately insured.

3. Any change in the terms and conditions of the agreement should be intimated to the borrower in vernacular language or in a language understood by the borrower and a copy of the same duly acknowledged by the borrower should be kept on record.

4. It should be mentioned in the loan agreement that the rate of interest and other terms will be revised only prospectively and not retrospectively.

5. Decision to recall / accelerate payment or performance of the loan will be only in consonance with the loan agreement.

6. Every borrower is entitled to receive back all the gold pledged as security for the loan availed on repayment of all dues and on full settlement of the loan. However if the borrower has any other liability with the Company, the company reserves the right not to release the gold pledged. In such a case, the Company should give notice to the borrower about the same stating the full particulars of the remaining claims and the conditions un- der which the Company is entitled to retain the gold pledged till the rele- vant claim is settled/paid.

(F) RECOVERY OF DUES, EXERCISE OF LIEN & DELIVERY OF SECURITY

A. Business Loan / Term Loan

1. The Company will not, as a matter of fair dealing, normally recall the loan before the initially agreed tenure except in unanticipated or abnormal circumstances where the Company’s interests are adversely affected e.g. when the security value diminishes substantially, when the quality of gold is not found to be acceptable, due to any regulatory / government direc- tives etc. In all such cases proper and reasonable notice shall be given to the customer recalling the loan before expiry of the normal tenure.

2. The Company will make all possible soft or persuasive efforts to get the customer to repay the dues without resorting to disposal of the security. The Company does not accept nor will it encourage the use any coercive or hard measures to recover its dues from the customer.

3. The Company will deliver the security to the customer immediately upon settlement of the loan in the same condition as was at the time of sanction of the loan. In case of any damage caused to the security due to mishan- dling by its employees, the Company shall at its cost get the damage re- paired or alternately pay reasonable compensation to the customer on a case to case basis. If the security has signs of damage thereon, before being taken custody of by the Company at the time of sanction of loan, the fact will be briefly incorporated in the sanction letter.

4. The Company will exercise only legitimate right of lien over the pledged security or such cash surplus as may arise upon settlement of existing loans at any time. Such right of lien shall arise only if the customer has any other dues, either directly or as guarantor, and will be subject to proper intimation of such right of lien being given to the customer by the Company.

5. The Company shall issue a signed and, normally, a system generated receipt for all cash payments made by the customer immediately. The Company shall also accept payments vide cheques, demand drafts, electronic transfers etc. subject to the condition that return of the security will be made only after confirmation of realization.

6. Even though the loan sanction letter contains all applicable terms and conditions of the loan the Company shall, nevertheless, endeavour, on a best effort basis, to send advices, reminders etc. regarding due date for payment of interest, principal etc. by letter, courier service, telephone , SMS etc.

7. The Company shall, on demand, provide the customer or his duly authorized representative with a statement of the loan account at any time during the currency of the loan or immediately upon closure. However, the Company may, at its discretion, require payment of reasonable processing charges by the customer for providing statement of account if such demand is made 30 calendar days after closure of the account.

8. The Company will resort to disposal of security only as a last resort and that too after adequate and proper notice is served on the customer to re- pay the dues. Such notice will be as per the terms contained in the sanction letter and also in compliance with applicable laws and regulatory guide lines. The disposal of the security 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 oth- er charges.

9. Where the Company proposes to dispose of the security even before the normal tenure of the loan based on the rights conferred on the Company vide loan application and loan sanction letter adequate and proper notice will be served on the customer before such action is initiated for recovery of dues.

10. The Company prefers and encourages customers to take back delivery of the security immediately upon full settlement of all dues. However, should there be exceptional instance of the Customer being unable to take delivery of the security , not attributable to the inability of the Company, after clo- sure of the loan account reasonable safe custody charges may be payable which will be duly advised to the customer or displayed in the branch premises and the Company’s website.

11. The Company will not interfere in the affairs of the customers except for the purposes mentioned in the terms & conditions of the loan or when constrained to do so due to inadequate or false disclosures made by the borrower at the time of putting through the transactions.

12. The company will charge appropriate collection charges as decided from time to time by the board, the same will be communicated to the customers in due course.

B. Gold Loan

1. A minimum of 30 days prior notice shall be given to the borrower before auction.

2. The notice must be sent by registered post with acknowledgement and if the acknowledgement is not received within a normal period a second no- tice should be sent to the borrower in the same manner.

3. The auction should be announced to the public by issue of advertisement in at least two newspapers, one in vernacular language and another in na- tional daily newspaper.

4. Maximum publicity must be given to the auction. A notice stating the de- tails of auction must be published in the notice board of the Company.

5. The Company and any of the sister concerns of the Company should not participate in the auction held. Any staff of the Company or of the sister concerns of the Company should not participate in the auction held.

6. The pledged gold should be auctioned only through auctioneers approved by the Board of Directors.

7. The company will follow the procedure approved by the board for dealing with fraud including separation of duties of mobilization, execution and approval.

8. The auction sale should be conducted in accordance with the rules and regulations prescribed by Reserve Bank of India from time to time.

9. The loan agreement will contain details of auction procedure.

10. The company will charge appropriate collection charges as decided from time to time by the board, the same will be communicated to the customers in due course.

(G) REGARDING EXCESSIVE INTEREST CHARGED

1. In order to avoid complaints about excessive interest charged, the company will lay down appropriate internal principles and procedures in determining interest rates and other processing charges.

2. In order to regulate excessive interest, the Board of the Company will adopt an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium, etc. and determine the rate of interest to be charged for loans and advances. The rate of interest applicable to the borrowers will be disclosed to the customers in the loan agreement.

3. The rate of interest will be made available on the web-site of the Company.

4. The rate of interest will be annualized rates so that the borrower is aware of the exact rates.

(H) GENERAL

1. 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).

2. In case of receipt of request from the borrower for transfer of borrowed account, the consent will be conveyed within 21 days from the date of receipt of request.

3. In the matter of recovery of loans, the Company will not resort to undue harassment. The Company will ensure that the staffs are adequately trained to deal with the customers in an appropriate manner.

(I) GRIEVANCE REDRESSAL MECHANISM

The Board of Directors of the Company will lay down the appropriate grievance redressal mechanism within the organization to resolve disputes arising in this regard. Such a mechanism will ensure that all disputes arising out of the decisions of lending institution's functionaries are heard and disposed of at least at the next higher level. The Board of Directors will also provide for periodical review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management.

1. The Company has framed suitable grievance redressal mechanism to resolve grievances/complaints of borrowers. All disputes arising out of the decisions of the company are heard and disposed of at the next higher level. At the operational level, the company will display the following information prominently for the benefit of our customers at all our branches.

2. The Company will put in place an effective training system to ensure that employees of the Company are customer friendly and do not resort to rude, inappropriate or unethical behavior

3. The Grievance Redressal Officer shall review the functioning of the grievance redressal mechanism on a quarterly basis. A consolidated report of such reviews shall also be submitted to the Board of Directors on a half yearly basis.

4. The Grievance Redressal Officer of JMJ FINANCE LIMITED is Mr. Shaji T D, General Manager. He may be contacted through mail or phone

E-mail:jmj@jmjcompany.com

Mobile:9349860825

(J) CONFIDENTIALITY

The Company shall treat all personal information of its borrowers as private and confidential and will not reveal any information to any other entity except for Regulatory or Statutory matters.

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