Code of Conduct
Code for Responsible Lending — adopted by UFin Financial Services Limited as per RBI Master Directions for NBFC-MFIs and the MFIN (Microfinance Institutions Network) industry code.
Download PDF (463 KB)Introduction
UFin Financial Services Limited aims to promote financial inclusion and women empowerment by extending unsecured micro-enterprise loans and credit-plus assistance to clients. The Company is an NBFC-MFI registered with the Reserve Bank of India and follows various RBI guidelines, having adopted the Code for Responsible Lending (CRL) developed by MFIN — the Self-Regulatory Organization recognized by RBI.
Objectives
Promote and strengthen the Microfinance movement by bringing low-income clients to the mainstream financial sector.
Build progressive, sustainable, and client-centric systems to provide a range of financial services consistent with regulation.
Promote cooperation and coordination to achieve higher operating standards and avoid unethical competition.
Applicability
This code applies to unsecured microfinance loans extended by the company — specifically covering credit services (individual or group), recovery of credit, insurance and remittance services, formation of Joint Liability Groups and their federations, and business development services including marketing for client welfare.
The Five Principles
1. Fair Interaction
- No unfair discrimination on grounds of religion, caste, marital status, or sexual orientation.
- All employees and agents must use respectful language, maintain decorum, and be respectful of social and cultural sensitivities.
- No coercion of any sort for recovery of loans. No verbal or physical intimidation or humiliation.
- No contacting customers at odd hours or inappropriate times such as bereavements, illness, or social occasions.
- Clients are protected against fraud, misrepresentation, deception, or unethical practices.
- No bundling of products — except credit-linked life insurance as per RBI and IRDA norms, with client consent.
- Board-approved process for dealing with clients at each stage of default. No collection of shortfalls from employees.
2. Suitability (Avoiding Multiple/Over Lending)
- Valid Credit Information Report (CIR) required before sanctioning any loan — including top-ups and subsequent cycles. CIR valid for 15 calendar days.
- Loan disbursement commensurate with customer’s ability to repay.
- Maximum 50% of monthly household income allowed for loan repayment obligations, considering all outstanding loans.
- Interest rates and charges must not be usurious. No pre-payment penalty charges.
- Household income computed by considering borrower, spouse, and unmarried adult children.
- Comprehensive Credit Information Report (CCIR) required for borrower and all household members.
- Timely and accurate data submission to Credit Information Companies (CICs) — preferably daily.
- No loan to customers with non-performing accounts (>DPD 90 days, >₹3,000 outstanding) with another lender.
3. Education & Transparency
- Key information provided in loan application, sanction letter, and loan card — including identity, product details, annualized interest rate (reducing balance), processing fee, total payable, and insurance coverage.
- All terms communicated in the official regional language or a language understood by the customer.
- Receipt provided for every payment received from the customer.
- Training, assessment, and periodic interactions to ensure customers fully understand products and contract terms.
- Disclosure prior to disbursement: rate of interest (reducing balance), processing fee, insurance charges, and any other fees.
4. Information & Privacy
- KYC documents obtained from customers as per RBI norms.
- Accurate and comprehensive customer data uploaded to all RBI-approved CICs in Uniform Credit Data Format on a daily basis.
- Customer disputes about CIC data addressed promptly.
- Personal customer information kept strictly confidential — disclosed to third parties only under legal requirement, with prior written customer permission, or when authorized by the customer.
5. Grievance Redressal
- Robust customer grievance redressal system to address complaints effectively and in a timely manner.
- Separate Board-approved Customer Grievance Redressal Mechanism (CGRM) policy implemented.
- Clients informed about the grievance mechanism and how to access it.
- Customer care number displayed in all branches for easy accessibility.
- Grievance redressal details communicated in branches, loan documents, and all communication materials.
Governance & Enforcement
UFin observes high standards of governance by inducting persons with good and sound reputation as members of the Board of Directors and seeks to comply with best standards stipulated in the Companies Act and RBI regulations.
The company takes responsibility to incorporate professional governance systems to ensure all employees and agents are trained to follow this Code in practice. Clients are also educated on this Code and its implementation. A compliance report is placed before the Board at regular intervals, indicating deviations and reasons thereof.