FairMoney Fair Practices Code

The Reserve Bank of India (RBI) has issued guidelines on Fair Practices Code for Non- Banking Financial Companies (NBFCs) via Reserve Bank of India (“RBI”) Circular no. DNBR (PD) CC.No.054/03.10.119/2015-16 dated July 01, 2015, thereby setting standards for fair business and corporate practices while dealing with their customers. This Fair Practice Code is aimed to provide to all the stake holders, especially customers effective overview of practices followed by the company in respect of the financial facilities and services offered by the company to its customers.

FairMoney Technology Private Limited. (“the Company”) hereby furnishes the Fair Practices Code (“the FPC”) based on the guidelines issued by RBI. The Company shall also make appropriate modifications in the FPC from time to time to confirm the standards that may be prescribed by RBI. The Fair Practices Code, as adopted herein below, is in conformity with the Guidelines on Fair Practices Code for NBFCs as contained in the aforesaid RBI Circulars.

The Company's business will be conducted in accordance with prevailing statutory and regulatory requirements, with due focus on efficiency, customer-orientation and corporate governance principles. In addition, the Company will adhere to the Fair Practices Code in its functioning, the key elements of which are as follows.

The Company has put in place the FPC with an endeavor to achieve synchronization of best practices when the Company is dealing with its stakeholders such as customers, employees, vendors, etc. The Company’s Fair lending practices shall apply across all aspects of its operations including marketing, loan origination, processing, and servicing and collection activities. The Company’s commitment to the FPC would be demonstrated in terms of employee accountability, monitoring and auditing programs, training and technology.

The Company’s Board of Directors and the management are responsible for establishing practices designed to ensure that its operations reflect a strong commitment to fair lending and that all employees are aware of that commitment.

1. “Board” means Board of Directors of the Company
2. “Company” means FairMoney Technology Private Limited
3. "Directors” means individual Director or Directors on the Board of the Company
4. “FPC” means Fair Practice Code
5. "App" means FairMoney Technology Android application 

The essence of the FPC lies in the following aspects that the Company shall strive to follow in spirit and in letter:

1. To act fairly and reasonably in all the dealings with borrowers by ensuring that:
   1. The Company’s products, services, procedures and practices will meet the broad requirements and standards in the FPC;
   2. The Company’s products and services will be in accordance with relevant laws and regulations as applicable for the time being in force;
   3. The Company’s dealings with its borrowers will rest on ethical principles of honesty, integrity and transparency.
2. The Company will assist its customers in understanding as to what the broad features of its financial products and services are and what are the benefits and risks involved in availing the same by:
   1. Providing information about the products and services in simple manner;
   2. Explaining the financial implications of using the products and services;
   3. Ensuring that the staff is adequately trained to deal with the customers in an appropriate manner;
   4. Having reasonable and lawful measures to recover its dues from defaulting customers, including use of persuasive methods for the purpose of collection of its dues.
3. The Company will make every attempt to ensure that its customers would have trouble-free experience in dealing with it. However, in case of error of commission and/or omissions, it shall:
   1. Deal with the errors promptly and effectively;
   2. Deal with the Grievances redressal in a quick and efficient manner and to the satisfaction of the customers;
   3. Promptly handle Complaints;
   4. Have Escalation process, in the event of dissatisfaction of the borrower in handling his complaint(s);

The FPC will be applicable to the following broad areas:

1. Loan applications and processing thereof
2. Loan appraisal and terms/conditions
3. Disbursement of loans including changes, if any, in terms and conditions
4. Post disbursement supervision/monitoring
5. Other general provisions

Reserve Bank of India (RBI) has advised that Boards of Non-Banking Finance Companies (NBFC's) lay out appropriate internal principles and procedures in determining interest rates, processing and other charges.

Although FairMoney is not a regulated NBFC, the Company will strive to be read in conjunction with RBI guidelines, directives, circulars and instructions. The company will apply best industry practices so long as such practice does not conflict with or violate RBI guidelines.

In order to ensure its standards of transparency, in conformity with the stipulations of the RBI's directives, the Company has adopted the following interest rate policy for determining Interest Rates, Processing and Other Charges. This Policy applies to clients whose loans are booked in the Company.

Interest Rate

• Tenor of the Loan – The interest rate charge will depend on the term of the loan; structure of the loan; terms of payment of interest.
• Internal cost loading – The interest rate charged will also take into account costs of doing business.
• Internal and External Costs of Funds - The rate of interest charged is also affected by the rate at which the funds necessary to provide loan facilities to customers are sourced, normally referred to as the Company’s external cost of funds. Internal cost of funds being the expected return on equity issued, is also a relevant factor. The interest rate charged will also take into account costs of doing business.
• Credit Risk – As a matter of prudence, bad debt provision cost should be factored into all transactions. This cost is then reflected in the final interest rate quoted to a customer. The amount of the bad debt provision applicable to a particular transaction depends on our internal assessment of the credit strength of the customer.
• Other Factors – The rate of interest shall be based on the cost of borrowed funds, matching tenor cost, market liquidity, RBI policies on credit flow, offerings by competition, tenure of customer relationship, market reputation, cost of disbursements, inherent credit and default risk in the products and customer per se arising from customer segment, profile of the customers, stability in earning and employment, deviations permitted, ancillary business opportunities, future potential, group strength and overall customer yield, nature and value of primary and collateral securities, past repayment track record of the customers, external ratings of the customers , industry trends, switchover options, canvassed accounts etc.
• The company may adopt discrete interest rate model whereby the rate of interest for same product and tenor availed during same period by customers would not be a standardized one but could be different for different customers depending upon consideration of any or combination of a few or all factors listed out above.
• The annualized rate of interest would be intimated to the customer.
• The interest rates would be offered on fixed, floating, variable basis.
• Interest rates shall be intimated to the customers at the time of sanction/ availing of the loan and the equated installments payment apportionment towards interest and principal dues shall be made available to the customer.

• All processing / documentation and other charges recovered are expressly stated at the loan offer step before client accepts the loan. They vary based on the loan product, geographical location, customer segment and generally represent the cost incurred in rendering the services to the customers, including costs incurred by FairMoney when using third-party solution for KYC, scoring, or any other purpose linked to the rendering of the services.
• The practices followed by other competitors in the market would also be taken into consideration while deciding the charges.
• GST and other applicable taxes shall be charged as per the guidelines issued by the Government

• 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.

• In case of any complaint/grievances of the borrowers, the same shall be intimated by them in writing to the Grievance Redressal Officer. The Grievance Redressal Officer shall immediately make all efforts to redress the grievances within the time frame mentioned in the Grievance Redressal Mechanism.

• After examining the matter, the Company sends a response as soon as possible; The Company has laid down the Grievance Redressal Mechanism for the speedy disposal/ remedy of its Customer’s Complaints/ Grievance.

• The Company believes in speedy redressal of grievances of the borrower and guides its borrowers who wish to lodge a complaint and also provide guidance on what to do in case the borrower is unhappy with the outcome.

The various commitments outlined and made by the Company shall be applicable under the normal operating environment. In the event of any Force Majeure circumstances, the Company may not be able to fulfill the objectives under the FPC to the entire satisfaction of the borrowers, the stakeholders and the public in general.

In order to enhance the value and relevance to the borrowers, the Board of Director of the Company shall annually review the compliance with this Fair Practice Code, adopted by the Board.