Fair Lending Practices Code

Introduction

 

The object of this FAIR LENDING PRACTICES CODE is to provide information to our existing and prospective customers regarding the lending practices followed by our Bank. It is hoped that this information will enable our customers to avail a whole range of loan products and services offered by our Bank in a trouble-free manner. The information will also help our customers to interact effectively with our Bank in regard to these matters.

 

Our Bank undertakes

 
  • To offer professional, efficient, courteous, diligent and speedy services in the matter of lending.
  • Not to discriminate on the basis of religion, caste, sex or descent in the matter of lending.
  • To be fair and honest in advertising and in marketing loan products.
  • To offer customers accurate and timely disclosure of terms and conditions, costs, rights and obligations as regards loan transactions.
  • To offer relevant and useful assistance to customers applying for loans, as may be required.
  • To attempt in good faith to resolve any disputes or differences with customers through appropriate authorities within and outside our Bank.
  • To comply with all the regulatory requirements in good faith.
  • To spread general awareness about potential risks that customers may face in contracting loans, so as to encourage customers to make their own decisions for their benefit, after taking independent financial advice wherever necessary, and not act only on representation of the bank.
 

Information on loan products and services

 

It will be our endeavour to bring to a prospective customer’s attention the range of loan products offered by our Bank which may suit his/her individual needs and to provide adequate information and explanations as may be required.

 

On exercise of choice, the customer would be given more specific and relevant information about the loan product of his choice. The customer would be explained the processes involved until sanction and disbursement of loan.

 

He/she would also be informed of timeframe within which the processes will normally be completed at our Bank, once the information/data required from him/her are received in full.

 

The customer would be informed of the names, contact addresses and phone numbers of the persons whom he can contact for the purpose. The customer would be informed the procedure involved in servicing the loan after availment and closure of the loan account.

 

Interest Rates

 

The interest rates for different types of loans and advances would be made available to existing and prospective customers through our branches. This information would also be available in our Bank’s website and over phone wherever tele-banking services are provided. The information would also be published in other media from time to time.

 

All our customers are entitled to receive periodic updates on the interest rates applicable to their loan accounts. In case of revision of interest rates as per the terms and conditions agreed to by the borrower, the concerned borrowers would be notified of the revision as soon as possible through individual letters and/or display of suitable notice at the branch and other media.

 

The details of penal interest chargeable in the case of overdues, defaults, non-compliance in the terms and conditions of sanction of the loan, etc. will be made known to all our customers and prospective customers.

 

Other charges

 

Our Bank would notify details of fees and other charges payable by customers for their loan facilities. The standard fees/charges payable by the borrowers in addition to interest on loans and advances will be made available for the benefit of prospective customers. Any revision in the charges will also be notified in advance.

 

The fees and charges payable by our customers in respect of their loan accounts may be debited to the concerned customer’s account with due mandate or prior intimation to the concerned customer.

 

Terms and conditions of lending

 

On receipt of an application for loan, an acknowledgement of the receipt would normally be given. If so required by the applicant, a copy of the application form, duly acknowledged, would also be given as soon as the applicant chooses to buy a product or service of his choice.

 

After a decision to sanction the loan is taken, our Bank would convey to the applicant the sanctioned loan amount along with the terms and conditions of sanction.

 

The draft/specimen of the loan documents that the customer will be required to execute would also be shown and, if necessary, explained to the borrower so that the terms and conditions of sanction and the formalities required to be completed before disbursement of the loan are clearly understood. After the loan documents are executed, a copy of the duly executed documents would be provided to the borrower, if so required by him/her.

 

Our Bank will ensure that the loan application forms, loan documents and such other papers to be signed by a customer, in respect of all categories of loans irrespective of the amount of loan sought by the customer, comprehensively contain all the terms and conditions relating to the loan product or service of the customer’s choice.

 

Wherever possible, reasons for rejection of loan application, in case of all categories of loans irrespective of any threshold limit, including credit card applications, would be conveyed to the customers as per the normal banking practices.

 

In line with the normal banking practices, loan facilities and services are extended by our Bank at the Bank’s discretion. Such discretion will include allowing or disallowing facilities such as drawings beyond the sanction limits, honouring cheques issued for purposes other than specifically agreed to at the time of sanction, allowing drawings in case of any default in servicing the loan or non-compliance with the terms and conditions of sanction.

 

Our Bank does not undertake any obligation to meet further requirements of the borrowers over and above the sanctioned limits arising from any reason including growth in business, without proper review/re-assessment.

 

Operations in loan account

 

Our Bank would provide regular statement of accounts, unless not found necessary by the customers.

 

Our Bank would notify relevant due dates for application of agreed interest, penal interest, default interest, and charges if they are not mentioned in the Loan applications, documents or correspondence. Our Bank would notify in advance any change in accounting practices that would affect the customer, before its implementation.

 

Confidentiality

 

All personal information of the customer would be kept confidential and would not be disclosed to any third party unless agreed to by the customer. The term "third party” excludes all law enforcement agencies, Credit Information Bureau, Reserve Bank of India and other banks and financial institutions.

 

Subject to above, customer information may be revealed only under the following circumstances:

 
  • If our Bank is compelled by law.
  • If it is in the public interest to reveal the information.
  • If the interests of our Bank require disclosure.
 

Financial Distress

 

In case our customer faces financial distress, our Bank would expect and encourage the customer to inform about the condition as soon as possible and in full detail.

 

While handling such cases, the customer’s genuine difficulties will be duly taken into account and necessary sympathetic consideration would be accorded. The Bank’s operational staff is adequately trained to give patient hearing to customers who are facing genuine financial distress and to render all possible help within their means.

 

In case it becomes necessary to recall a loan extended by our Bank, to accelerate payment or performance under the loan agreement, or to seek additional securities, our Bank would give due and reasonable notice to the customers.

 

Grievance Redressal

 

Our Bank would make available to a customer the names and contact addresses/telephone numbers of authorities within and outside our Bank who may be approached for redressal of customer’s grievances.

 

A Grievance Redressal Cell headed by General Manager (Planning and Development Department) will function at the Bank’s Administrative Office, Karur for the purpose. Customers may approach this cell for grievance redressal.

 

The necessary assistance and details regarding where a complaint can be made, how a complaint should be made, when to expect a reply, whom to approach for redressal of grievance, etc. will also be provided to all customers through our branches.

 

All complaints would be acknowledged and responded to normally within a period of a month, unless the complaint involves verification of voluminous facts and figures.

 

Availability of this code

 

A copy of this Fair Lending Practices Code is available to all our existing and prospective customers. It is also available on our Bank’s website at www.lvbank.com.