Fair Practice Code
Guidelines on Fair Practices Code for NBFC-MFI — adopted by UFin Financial Services Limited to bring total transparency in the working of the Company, as recommended by the Board.
Download PDF (298 KB)Introduction
UFin Financial Services Limited extends Microfinance loans through the JLG model for income generation activities and other requirements including water and sanitation, education, medical, and emergency needs to low-income households. The Company is governed by a balanced team of learned, experienced practitioners and professionals. This Fair Practices Code ensures total transparency in operations. All loans offered are categorized as Microfinance Loans (MFI Loans).
General
- Effective Grievance Redressal Mechanism with complaint boxes in all offices and a designated senior-level Grievance Redressal Officer.
- 7 working days to redress grievance at branch level. If unresolved, borrower may escalate to Head Office Grievance Redressal Cell (resolved within 1 month), then to MFIN and RBI.
- Grievance mechanism displays Branch Manager’s name and contact, Area Manager’s name and contact, and MFIN contact numbers.
- The Company is accountable for any inappropriate behaviour by its employees and shall provide timely grievance redressal.
- Free-of-cost training offered to borrowers. Field staff trained to make borrowers fully aware of procedures and systems.
- Field staff shall not visit borrowers for overdue recovery before 9 AM or after 6 PM, and shall not visit on festivals, marriages, or mourning occasions.
- Loan application procedure shall not be cumbersome. Disbursements made per pre-determined time schedule through well-defined process.
Loan Applications & Processing
- Communication with all borrowers in the respective local/official language of the state or a language understood by the borrower.
- All necessary KYC documents collected as per Reserve Bank of India norms.
- Minimum, maximum, and average interest rates prominently displayed on website, all branch premises, and other Company literature.
- Loan application contains list of documents required for availing the loan.
- Loan card issued to borrower contains all relevant details specified by RBI from time to time.
- Fact sheet provided containing all loan product details, pricing information, and fees charged.
- All loan applications disposed within 3 weeks from date of application.
- Details of dedicated recovery-related grievance redressal mechanism provided to borrower at time of loan disbursal.
Loan Appraisal & Terms
- Managers and Field Officers trained for proper income assessment and due diligence to understand household repayment capacity.
- Credit bureau report obtained for all loan applications to assess existing repayment obligations of household/borrower/co-borrower.
- Sanction letter / loan card communicates loan amount and detailed terms in the language understood by the borrower. Acceptance recorded at branches.
- Interest rate, method of application, processing fee, and insurance premium disclosed in the loan agreement.
- Interest rate model follows Board-approved Pricing Policy considering cost of funds, margin, and risk premium. Rates disclosed via formal communications, branch displays, and website.
- No pre-payment charges for Group lending borrowers. No Security Deposit or Margin stipulated.
- Minimum moratorium of one instalment between loan grant and first instalment due date.
- Privacy of borrower’s data assured — shared only with Industry Associations, Credit Bureaus, Lenders, and statutory/regulatory/rating agencies.
- Copy of Loan Agreement made available to borrowers in addition to sanction letter and loan card.
Disbursement of Loans
- Notice served to borrowers in local language for any changes to terms including disbursement schedule, interest rates, or service charges. Changes applied only prospectively.
- Sanctioning and disbursement organized at branch location with more than one official involved. Senior officials and monitoring teams conduct random checks.
- Loan card issued in borrower’s language containing: borrower identity, simplified RBI pricing fact sheet, non-credit product details with consent, repayment acknowledgements, and Grievance Redressal System contacts.
Non-Coercive Methods of Recovery
- All recoveries collected at the central designated place (Group leader/customer house) decided mutually. Staff visits residence/workplace only if borrower misses 2+ successive meetings.
- Board-approved uniform systems for staff recruitment, training, and supervision. Training programs inculcate appropriate behaviour without abusive or coercive collection practices.
- Disciplinary action initiated against staff who abuse any item under the Code of Conduct.
- The Company currently does not engage or outsource any recovery agents.
Internal Control System
- Periodical review of compliance through designated officials in the hierarchy and effective internal audit / inspections.
- Annual report to the Board on review of compliance to Fair Practices Code and functioning of the grievance redressal system.
- Internal audit reviews Fair Practices Code implementation and grievance redressal effectiveness during branch audits.
- Grievance redressal system functioning reviewed by internal audit at Head Office.
- Internal audit furnishes feedback to the Audit Committee at quarterly intervals.
Compliance Review: Management submits an annual report to the Board reviewing compliance to this Fair Practices Code. Internal audit furnishes feedback to the Audit Committee at quarterly intervals.