FAIR PRACTICE CODE

APAC HOUSING FINANCE PRIVATE LIMITED (“APACHF” or the “Company”) is incorporated under the Companies Act, 2013.

This Fair Practice Code (“Code”) has been formulated in compliance with the guidelines issued by the National Housing Bank vide their circular no. NHB/ND/DRS/Pol-no.34/2010-11 dated 11-10-2010. NHB(ND)/DRS/REG/MC-03/2017 dated July 1, 2017.

Accordingly, the following is the Fair Practice Code of APACHF as framed and approved by its Board of Directors.

Objectives of the Code

The following are the primary objectives of this Code:

  • To promote good and fair practices by establishing minimum standards in dealings with customers.
  • To increase transparency so that customers can have a better understanding of what they can reasonably expect of the services.
  • To encourage market forces, through competition, to achieve higher operating standards.
  • To promote a fair and cordial relationship between the borrowers and the Company.
  • To foster confidence in the housing finance sector.

Application of the Code

This Code is applicable to all the products and services of the Company, whether they are provided by APACHF across the counter, over the phone, by post, through interactive electronic devices, on the internet or by any other mode, except in the event of any force majeure. The Code is based on ethical principles of integrity and transparency and all actions and dealings shall follow the spirit of the Code.

The Company shall at all times do its best to act fairly, reasonably and meet the standard practices prevalent in the housing finance industry by ensuring that:

  • The Company follows the ethical principles of integrity and transparency and follow the guidelines as issued by the National Housing Bank.
  • The Company shall disclose and provide required information about fees/charges payable for processing the loan application, the amount of fees refundable if loan amount is not sanctioned /disbursed, prepayment options and charges, any penalty for delayed repayment, if any, conversion charges of switching loan from fixed to floating rates or vice-versa, existence of any interest clause and any other matter which affects the interest of the borrower. In other words, APACHF will disclose all costs inclusive of all charges involved in processing/sanctioning of loan applications in a transparent manner. APACHF will ensure that such charges/fees are non-discriminatory.
  • The Company shall make this Code available on request, either over the counter or by electronic communication or email.
  • The Company shall ensure all relevant staff are trained to provide relevant information about the Code and will put the Code into practice.
  • The Company will inform customers on changes in the rate of interest or any other terms and conditions which financially impact the customer through letters, email, publication in newspapers or through its website.
  • The Company shall assist its customers towards compliance with Know your Customer (“KYC”) guidelines.
  • At all times the Company’s dealings with its customers will rest on ethical principles of integrity and transparency.
  • At all times the Company’s products and services will meet relevant laws and regulations in letter and spirit.
  • The Company shall take all the necessary steps for providing easy accessibility of this Code to all prospective customers and provide customers a copy of the Code. A copy of the Code will also be available on the Company’s website and in every branch.

Applications for loans and their processing

  • The Company’s loan application form will include the necessary information to enable prospective customers to fairly compare the Company’s terms and conditions with those of other Housing Finance Companies (HFCs). In addition, the loan application form shall clearly list the documents required to be submitted along with the application form.
  • Specifically, the Company shall transparently disclose to the customer all information about fees and charges payable for application processing, the amount of fees that are refundable in the event a loan is not sanctioned/ disbursed, pre-payment options and charges if any, penalty for delayed repayment charges if any, conversion charges for switching a loan from fixed to floating rates or vice versa, existence of any interest re-set clause and any other matter which affects the interest of the customer. The Company will also ensure that such charges and fees do not violate its commitment to be non-discriminatory, transparent and fair.
  • The Company will give proper acknowledgement for the receipt of all loan applications. (The expected time frame for response will be indicated in the acknowledgement)

Loan Appraisal and terms/conditions

  • Where possible, the Company will strive to employ the most practicable communication mode with its borrowers in order to facilitate the efficiency of loan application processing.
  • As a business practice, all particulars required for processing a loan application shall be collected by the Company at the time of application. In cases where the Company requires any additional information the customer will be informed as such at or before the time of sanction/disbursal of the loan.
  • The Company will communicate a sanction through a letter containing:
    • The amount of the loan sanctioned and disbursement schedule
    • Rate of interest applicable
    • Fees
    • Method of funds application
    • EMI Structure
    • Prepayment charges and other terms and conditions
  • A duly accepted copy of such letter will be kept on record.
  • The Company will furnish a copy of the loan agreement along with a copy of other enclosures to the borrower.

Communication of rejection of loan application

  • In the event of rejection of a loan application, the Company will communicate the reasons for the rejection of the loan proposal to the customer.

Disbursement of loans including changes in terms and conditions

  • The Company will disburse the sanctioned amount in accordance with the disbursement schedule/terms of sanction/loan agreement.
  • The Company shall intimate to the customer the loan repayment schedule.
  • The Company will intimate to the customer in writing of any amendments to the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges etc. Any changes in interest rates and charges will be effected only prospectively. Suitable conditions in this regard will be incorporated in the loan agreement.
  • If such changes are disadvantageous to the customer, he/she may within 60 days and without notice close his/her account, return the loan outstanding, without having to pay any extra charges or interest.
  • Decision to recall/accelerate payment or performance under the agreement or seeking additional securities, will be in consonance with the loan agreement.
  • The Company will release all securities on repayment of all dues or on realization of the outstanding amount 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 Company will give notice to the borrower about the same with full particulars and the conditions under which the Company is entitled to retain the securities until the relevant claim is settled/paid.

When a person is considering to be a guarantor to a loan, he/she will be informed about:

  • His/her liability as guarantor;
  • The amount of liability that he/she will be committing himself/herself to the Company;
  • Circumstances in which the Company will call on him/her to pay up his/her liability.
  • Whether the Company has recourse to his/her other monies in the Company if he/she fails to pay up as a guarantor;
  • Whether his/her liabilities as a guarantor are limited to a specific quantum or they are unlimited; and
  • Time and circumstances in which his/her liabilities as a guarantor will be discharged and also the manner in which the Company will notify him/her about this.
  • The Company will keep the guarantor informed of any material adverse change/s of which the Company is aware in the financial position of the borrower to whom he/she stands as a guarantor.
  • In case the guarantor refuses to comply with the demand made by the Company despite having sufficient means to make the payment of the dues, such guarantor would also be treated as a wilful defaulter.

All personal information of customers will be treated as private and confidential even when the customers are no longer customers and will be guided by the following principles and policies. The Company will not reveal information or data relating to customer accounts, whether provided by the customers or otherwise, to anyone, including other companies/entities in the group, other than in the following exceptional cases:

  • If the information is to be given by law
  • If there is a duty towards the public to reveal the information
  • If the Company’s interests require it to give the information (for example, to prevent fraud, provide data to credit bureaus) but the same will not be used by the Company, as a reason for giving information about customer or customer accounts including customer’s name and address to anyone else, including other companies in the group, for marketing purposes
  • If the customer asks the Company to reveal the information, or with the customer’s permission
  • If the Company is asked to give a reference about a customer, with his/her prior written permission
  • The customer will be informed about the extent of his/her rights under the existing legal framework for accessing the personal records that the Company holds about him/her.
  • The Company will not use the customer’s personal information for marketing purposes by anyone unless the customer specifically authorizes the Company to do so.
  • When a customer opens an account, the Company will inform him/her as to when the Company may pass his/her account details to credit reference agencies and the checks the Company may undertake in this regard.
  • The Company may, also, give information to credit reference agencies about the personal debts the Customer owes to the Company if,
    • The customer has fallen behind with his/her payments
    • The amount owed is not in dispute
    • The customer has nost made any proposal that the Company is satisfied with, for repaying his/her debt, following the Company’s formal demand.
  • In these cases, the Company will intimate to the customer in writing that the Company plans to give information about the debts the customer owes the Company to credit reference agencies. At the same time, the Company will explain to the customer the role of credit reference agencies and the effect the information provided can have on the customer’s ability to get credit.
  • The Company may give credit reference agencies other information about the customer’s account if the customer has given the Company his/her permission to do so.
  • A copy of the information given to the credit reference agencies will be provided by the Company to the customer, if so demanded.
  • Whenever loans are given, the Company shall explain to the customer the repayment process by way of amount, tenure and periodicity of repayment. However if the customer does not adhere to the repayment schedule, a defined process in accordance with the NHB guidelines and laws of the land shall be followed for recovery of dues. The process will involve reminding the customer by sending him/her notices or by making personal visits and/or repossession of security, if any.
  • The Company’s collection policy is built on courtesy, fair treatment, persuasion and extant NHB guidelines issued from time to time. The Company believes in fostering customer confidence and long-term relationship. The Company’s staff or authorized representative for collection of dues or / and security repossession shall identify himself/herself and upon request, display his/her identity card issued by the Company or under the authority of the Company.
  • The Company will provide customers with all the information regarding dues and shall endeavour to give sufficient notice for payment of dues.
  • All the members of the staff or any authorized representative in collection and/or security
    repossession should follow the guidelines set out below:
    • Customer will be contacted ordinarily at the place of his/her choice and in the absence of any specified place, at the place of his/her residence and if unavailable at his/her residence, at the place of business/occupation.
    • The Identity and authority to represent the Company shall be made known to the customer at the earliest.
    • The customer’s privacy will be respected.
    • Interaction with the customer shall be in a civil manner.
    • Company’s representatives shall contact the customers between 0700 hrs and 1900 hrs, unless the special circumstances of the customer’s business or occupation require otherwise.
    • A customer’s request to avoid calls at a particular time or at a particular place shall be honoured as far as possible.
    • The time and number of calls and contents of the conversation will be documented. All assistance shall be given to resolve disputes or differences regarding dues in a mutually acceptable and orderly manner.
    • During visits to the customer’s place for dues collection, decency and decorum shall be maintained.
    • Inappropriate occasions such as bereavement in the family or such other calamitous occasions shall be avoided for making calls/visits to collect dues.
  • The Company has established systems and procedures for receiving, registering and disposing of complaints and grievances in each of its offices.
  • The management under the supervision of the Board of Directors has set an appropriate grievance redressal mechanism within the Company to resolve complaints and grievances. Such a mechanism will ensure that all disputes arising out of the decisions of the Company’s functionaries are heard and disposed of at least at the next higher level.
  • The Customer shall be told where to find details of the Company’s procedure for handling complaints, fairly and quickly.
  • If the customer wants to make a complaint, then the customers will be informed of the following:
    • How to do this?
    • Where a complaint can be made?
    • How a complaint should be made?
    • When to expect a reply?
    • Whom to approach for redressal?
    • What to do if the customer is not happy about the outcome?
  • If a complaint has been received in writing from a customer, the Company shall endeavour to send him/her an acknowledgement/response within a week. The acknowledgement will contain the name & designation of the official who will deal with the grievance. If the complaint is relayed over the phone at the Company’s customer service number, the customer shall be provided with a complaint reference number and kept informed of the progress within a reasonable period of time.
  • After examining the matter, the Company shall send the customer its final response or explain why it needs more time to respond and shall endeavour to do so within 30 days of receipt of a complaint and he/she should be informed how to take his/her complaint further if he/she is still not satisfied.
  • The Company shall publicize its grievance redressal procedure and ensure that it is specifically made available on its website.

The Company shall carry out due diligence as required under its “Know Your Customer “(KYC) policy before opening and operating customer accounts and in adherence of the policy. The customer will be asked to provide and submit necessary documents for the same. The Company shall ensure that it obtains all required information to meet Company’s KYC Policy, Anti Money Laundering Policy and any other applicable statutory requirement.

The Company shall provide the loan application form/account opening forms and other materials to customers and the same shall contain all details of essential information required to be furnished and documents to be produced for verification and/or for records for meeting KYC requirements.

The Company shall explain the procedural formalities and provide necessary clarifications sought by the customer while opening a loan account.

  • The Company shall verify the details mentioned by the prospective customer in the loan application by contacting him/her at his/her residence and/or on business telephone numbers and/or physically visiting his/her residence and/or business addresses through agencies appointed for this purpose, if deemed necessary by the Company.
  • The customer will be asked to cooperate if the Company needs to investigate a transaction on the customer’s account and with the police/other investigation agencies, if the Company needs to involve them.
  • The Company will advise the customer that if the customer acts fraudulently, he/she will be responsible for all the losses on his/her account and that if the customer acts without reasonable care and this causes losses, the customer will be responsible for the same.
  • The Company shall help the customer to understand the Company’s products and services by providing/giving information in any one or more of the following languages: Hindi, English and/or the appropriate local language.
  • The Company will not discriminate on grounds of sex, caste and religion in the matter of lending. However, this does not preclude the Company from instituting or participating in schemes framed for different sections of society.
  • The Company shall process requests for transfer of a loan account, either from a borrower or from a bank/financial institution, in the normal course.
  • To publicise the Code, the Company shall:
    • Provide existing and new customers with a copy of the Code.
    • Make the Code available on request either over the counter or by electronic communication or mail.
    • Make available this Code at every branch and on Company’s website.
    • Ensure that its staff is trained to provide relevant information on the Code and put the Code into practice.
  • The Board of Directors of the Company will ensure periodical review of the compliance with the Fair Practice Code and the functioning of the grievances redressal mechanism at various levels of management.
  • The Board of Directors of the Company have the power to effect any changes, amendments or modifications, if any, in the Fair Practice Code, within NHB guidelines.