Samvedna Microfinance Private Limited (SMPL)

Introduction

The Reserve Bank of India (RBI) issued guidelines on the Fair Practices Code for Non-Banking Finance Companies (NBFCs) in Circular No. RBI/2015-16/16 DNBR (PD) CC.No.054/03.10.119/2015-16 dated 1 July 2015 (as amended). Samvedna Microfinance Pvt. Ltd. (“Company” / “SMPL”) is committed to comply with these fair practices.

This FPC applies to all products and services—current and future—across all channels (branch offices, telephonic communication, online platforms, or any other mode introduced later). SMPL maintains a strong grievance redressal mechanism; resolution of customer complaints will not be compromised even where services are outsourced.

Applications for Loans and Their Processing

• All communications to borrowers shall be in the vernacular language or a language understood by the borrower.
• The loan application form shall include all information affecting the borrower’s interest to enable meaningful comparison with other Banks/FIs/NBFCs/Regulated Entities (REs). It shall indicate the documents required and disclose the approach to risk gradation and rationale for differential interest rates in both the application and sanction letter; this shall also be made available on the website or published in relevant newspapers and updated upon any change.
• SMPL shall acknowledge receipt of loan applications and, preferably, indicate the time frame for disposal.
• SMPL shall disclose all pricing information in a standardised, simplified factsheet. Any fee levied by SMPL and/or its partners/agents shall be explicitly disclosed therein. No amounts beyond the factsheet shall be charged.

Loan Appraisal and Terms / Conditions

• Sanction details (amount, terms and conditions, annualised interest rate, and method of application) shall be conveyed in writing in the vernacular language understood by the borrower; SMPL shall retain borrower acceptance.
• SMPL does not charge penal interest on delayed payments. Any penalty, if applicable, shall be applied only on the overdue amount, not on the entire loan, and shall be communicated in bold in the loan agreement.
• A copy of the loan agreement (preferably in vernacular) and all enclosures referenced therein shall be furnished at sanction/disbursement.

Disbursement of Loans & Changes in Terms

• Borrowers shall be notified in vernacular of any change in terms and conditions (including disbursement schedule, interest rates, service charges, prepayment charges, etc.). Changes in interest/charges shall apply only prospectively, with appropriate loan agreement provisions.
• Decisions to recall/accelerate payment or performance shall align with the loan agreement.
• SMPL shall not interfere in borrower affairs except as provided in the agreement (unless new, previously undisclosed information emerges).
• Upon borrower request to transfer the account, SMPL’s consent/objection shall be conveyed within 21 days, per transparent contractual terms in consonance with law.
• SMPL, as a regulated entity, is responsible and accountable for actions/conduct of its employees or outsourced staff and shall provide timely grievance redressal. Employees shall be adequately trained to deal appropriately with clients.
• No foreclosure/pre-payment penalties shall be charged on all floating-rate term loans to individual borrowers.

Responsibility of the Board of Directors

• With Board approval, SMPL has established an appropriate grievance redressal mechanism ensuring disputes arising from decisions of Company functionaries are heard and disposed of at least at the next higher level.
• The Board shall periodically review FPC compliance and grievance redressal functioning across management levels; a consolidated report shall be submitted to the Board at regular intervals.

Grievance Redressal Officer

At the operational level, SMPL shall prominently display at branches/places of business:

• The name and contact details (telephone/mobile and email) of the Grievance Redressal Officer for resolution of complaints.
• If a complaint/dispute remains unresolved within one month, the client may appeal to the Officer-in-Charge of the Regional Office of DNBS of RBI under whose jurisdiction SMPL’s registered office falls (with complete contact details).

Nodal Officer / Principal Nodal Officer

SMPL is covered under the RBI Integrated Ombudsman Scheme for Non-Banking Financial Companies, 2021. SMPL’s client grievance redressal mechanism shall be aligned to the Scheme.

Accordingly, SMPL appoints a Nodal Officer / Principal Nodal Officer to represent the Company and furnish information in respect of complaints filed against SMPL.

Regulation of Excessive Interest Charged by NBFCs

• The Board shall adopt an interest rate model considering cost of funds, margin, and risk premium to determine rates for loans/advances. The interest rate, risk gradation approach, and rationale for differential pricing shall be disclosed in the application and communicated explicitly in the sanction letter.
• Rates and rationale shall also be available on SMPL’s website or published in relevant newspapers and updated upon change.
• Rates shall be annualised so borrowers are aware of the exact charges. Any change in interest or other charges shall be informed well in advance and shall be effective only prospectively.

Guidelines for Charging Interest Rate by Company

SMPL shall not charge excessive rates. Rates shall reflect prevailing market conditions, cost of funds, and operating costs, subject to regulatory conditions. The Board shall lay down internal principles and procedures for determining interest and processing/other charges, in line with FPC transparency requirements.