Fair Practice Code

The company has the adopted the Fair Practice Code as per the guidelines issued by RBI from to time.

Objective

To ensure Fair Practice while dealing with customers
To enable customers to take informed decisions about our financial products and services
To ensure customer satisfaction

Applications for Loans and
their Processing

All communication to the borrower shall be in the vernacular language or a language understood by the borrower.
Loan application forms issued to prospective customers includes necessary information which affects the interest of the borrower so that a meaningful comparison with the terms and conditions offered by other NBFCs can be made, and the borrower can make an informed decision. The loan application form also clearly indicates documents required to be submitted along with the application form.
The company has a system for acknowledging receipts of all loan applications. The time frame within which loan applications have to be disposed has been indicated in the acknowledgement.

Loan appraisal and
Terms and Conditions

In accordance with the company’s appraisal norms, the loan application will be considered and the loan amount approved on the basis of merit.
The company shall convey in writing to the borrower, by means of an approval letter or otherwise, the amount of loan approved along with the terms and conditions, including the annualised rate of interest and method of application thereof.
Additionally, the penal interest applicable on late repayment is clearly highlighted in the loan agreement. The company shall keep a record of the customer’s acceptance of all these terms and conditions.
The company shall, at the time of sanction/disbursement of the loan, furnish a copy of the loan agreement and related enclosures to the customer.

Disbursement of loans including changes in terms and conditions

The company shall give notice to all its borrowers of any change in the terms and conditions – including disbursement schedule, interest rates, service charges, prepayment charges, etc. The company shall also ensure that changes in interest rates and charges are affected only prospectively. A suitable provision in this regard is incorporated in the loan agreement.
The decision to recall/ accelerate payment or performance under the agreement shall also be in consonance with the loan agreement.
The company shall relieve all securities on repayment of its full dues or on realisation of the outstanding amount of loan, subject to any legitimate right or lien for any other claim the company may have against its borrowers. If such right of set-off is to be exercised, the borrower shall be given notice about the same with full particulars about the remaining claims and conditions under which the company is entitled to retain the securities till the relevant claim is settled/paid.

General

The company will refrain from interference in the affairs of the customer except for the purposes provided for in the terms and conditions of the loan agreement (unless new information, not earlier disclosed by the customer, has come to the notice of the company).
The company will not discriminate against loan applications based on grounds of sex, caste and religion.
In case of receipt of a request from the borrower for transfer of the borrowal account, the consent or otherwise – i.e., objection of the company, if any – shall be conveyed to the borrower within 21 days from the date of receipt of any request. Such transfer shall be as per transparent contractual terms in consonance with law.
In the matter of recovery of loans, the company staff is adequately trained to deal with customers and shall not resort to any harassment – such as persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc.
The company shall not charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.

Responsibility of the Board of Directors

The Board of Directors of the company shall also lay down the appropriate grievance redressal mechanism within the organisation.
The Board of Directors shall also provide for periodical review of the compliance to the Fair Practices Code and functioning of the grievances redressal mechanism at various levels of management.

Grievance Redressal
Mechanism

In the present competitive scenario, excellent customer service is an important tool for sustained business growth. Customer complaints are a part of business life in any corporate entity. We believe that providing prompt and efficient service is essential not only to attract new customers but also to retain existing ones.

The company strives to provide a better customer experience and an efficient complaints redressal mechanism with a view to providing enhanced experience to our customers.

Customers may approach the Grievance Redressal Officer for redressal of their complaints.

The company has also displayed the name and contact details of the Grievance Redressal Officer at its branches/locations where business is transacted.

Grievance Redressal Officer
Mr. Madhusudan Gupta
Contact No: 011 49614004
Email id: madhusudan.gupta@vcfs.co.in
Address: Plot No 8, pocket 1, Jasola, New Delhi

If the Customers are not satisfied with the resolution provided by the company, they may further approach:

The Assistant Manager
Reserve Bank of India
Department of Non-Banking Supervision
6, Sansad Marg,
New Delhi 110001

Regulation of Interest Rate
charged by the Company

The Company has laid down appropriate internal principles and procedure in determining interest rates, processing fees and other charges. The Company has adopted 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 and the approach for gradations of risk and rationale for charging different rate of interest to different categories of customers shall be communicated explicitly in the sanction letter.

The rates of Interest will be annualized so that the borrower is aware of the exact rates that would be charged to the account.

Repossession of
Hypothecated Assets

The Company has a built in re-possession clause in the loan agreement with the customer which is legally enforceable. To ensure more transparency, the terms and conditions of the loan agreement contains provisions regarding:

notice period before taking possession;
circumstances under which the notice period can be waived;
the procedure for taking possession of the security;
a provision regarding final chance to be given to the borrower for repayment of loan before the sale/auction of the security;
the procedure for giving repossession to the borrower and
the procedure for sale / auction of the property.

Interest Rate Policy

Keeping in view the RBI guidelines, the following internal guiding principles and interest rate model are laid out by the Board of VC & FS (the “company”). This policy should always be read in conjunction with RBI guidelines, directives, circulars and instructions. The company will apply best industry practices so long as such practices do not conflict with or violate RBI guidelines.

Interest Rate

The interest rate and yield for each of the loan products would be decided by the Credit Appraisal Committee from time to time.
The rate of interest shall be determined based on the cost of borrowed funds, matching tenor cost, market liquidity, refinance avenues, offerings by competition, tenure of customer relationship, cost of disbursements (Cost of Fund). In addition to the cost of fund, the rate of interest shall further be determined based on inherent credit and default risk in the products and customer per se arising from customer segment, profile of the customers, professional qualifications, stability in earning and employment and repayment ability, overall customer yield, risk premium, nature and value of primary and collateral securities, past repayment track record of the customers, external ratings of the customers, industry trends, etc.
The company may adopt an interest rate model whereby the rate of interest for the same product and tenor availed during the same period by customers would be different from customer to customer depending upon consideration of any or a combination of a few or all factors listed out in the point above. Hence, the interest rate applied would be different from customer to customer and his/her loans.
The annualised rate of interest would be intimated to the customer.
Interest rates shall be intimated to the customers at the time of sanction/availing of the loan and the equated instalment apportionment towards interest and principal dues shall be made available to the customer.
Interest changes would be prospective in effect and intimation of change of interest, if any, or other charges would be communicated to customers.
In case deemed fit, the company may consider necessary moratorium for interest payment and repayment of principal with proper built-in pricing.
In case of staggered disbursements, the rate of interest would be subjected to review and may vary according to the prevailing rate at the time of disbursement or as may be decided by the company.
Besides interest, other financial charges such as processing fees, late payments, RTGS/ other remittance charges, etc., may be levied by the company under due communication to the customer, wherever considered necessary. Any revision in these charges would be with prospective effect.

Penal Interest /Late
payment charges

Besides normal interest, the company may collect penal interest /late payment charges for any delay or default in making payments of any dues. These penal interest/late payment charges for different products or facilities would be decided by the company from time to time.

No claims for refund or waiver of such charges/penal interest/additional interest would normally be entertained by the company and it is the sole discretion of the company to deal with such requests if any.

Fair Practice Code

Objective

Applications for Loans and their Processing

Loan appraisal andTerms and Conditions