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You are here: Home > Customer Corner > Fair Practice Code

Bank's Fair Practice Code as Lender

Guidelines:

  1. Processing of loan applications:
    1. In the loan application form, the Bank shall provide comprehensive information including information about fees and charges if any payable for processing and amount of such fees refundable in case of non acceptance of application, prepayment options and other matter which affects the interest of the borrowers, as per the details more fully described in schedule-I to prospective borrowers of all categories of loans, irrespective of the amount of loan sought by them.
    2. The Bank shall provide acknowledgement for receipt of all loan applications. The above said acknowledgement shall also mention the time frame within which application/s up to Rs.2 lakh will be disposed of by the Bank.
    3. The Bank shall verify the loan applications within a reasonable period of time for disposal as per the time frame mentioned in schedule-II.
    4. The Bank shall convey in writing the main reason/s which, in the opinion of the Bank after due consideration have led to rejection of the loan application in case of all categories of loans irrespective of any threshold limits, within a stipulated time.
  2. Loan appraisal and terms/conditions:
    1. The Bank shall ensure that there is proper assessment of credit applications made by the borrower, in tune with the Lending Policy of the Bank.
    2. The Bank shall convey to the borrower the credit facilities sanctioned along with the terms and conditions thereof, and keep the borrowers acceptance of these terms and conditions given with his full knowledge on record.
    3. The credit facilities extended are solely at the discretion of the Bank, as stipulated in the loan agreement. The Bank does not have any obligation to meet further requirement of the borrower/s on account of growth in business etc., without proper review of credit limits.
    4. The Bank must ensure that the terms and condition and other caveats governing credit facilities given by the Bank should be reduced in writing and the copies of the sanction letter duly signed by the authorised official must invariably be handed over to the borrower.
    5. The Bank must ensure that the copies of the loan agreement and all enclosures with reference to the loan agreement must invariably be handed over to the borrower to avoid any future disputes.
  3. Disbursement of loans including changes in terms & conditions:
    1. The Bank shall ensure timely disbursement of loans sanctioned in conformity with the terms and conditions governing such sanction.
    2. The Bank shall give notice of any change in the terms and conditions including interest rates, service charges etc., to the borrower and ensure that changes in interest rates and charges are made prospectively. Whenever the changes made are not borrower specific and apply to any/all categories of borrower, notice of change shall be construed to be made if the communication of the same is made in any of the following media: display with notice board of the Bank in the branch where the borrower account is maintained, or news paper publicity.
  4. Post disbursement supervision:
    1. Post disbursement supervision by the Bank particularly in respect of loans upto Rs. 2.00 lakhs, shall be constructive with a view to taking care of any genuine difficulty that the borrower may be facing.
    2. Before taking a decision to recall/ accelerate payment or performance under the agreement or seeking additional securities, Bank shall give notice to borrowers, as specified in the loan agreement or within a reasonable period, if no such condition exists in the loan agreement.
    3. The Bank shall release all securities on receiving payment of loan or realisation of loan subject to any legitimate right or lien for any other claim the Bank may have against borrowers. If such right of set off is to be exercised, borrowers shall be given notice about the same with full particulars about the remaining claims and the documents under which the Bank is entitled to retain the securities till the relevant claim is settled / paid.
  5. General:
    1. Bank shall restrain from interference in the affairs of the borrowers except for what is provided in the terms and conditions of the loan sanction documents (unless new information, not earlier disclosed by the borrower, has come to the notice of the bank).
    2. The Bank shall not discriminate on grounds of sex, caste and religion in the matter of lending. However, this does not preclude bank from participating in credit-linked schemes framed for weaker sections of the society/ Minority community.
    3. In the matter of recovery of loans, the Bank shall not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc.
    4. In the case of receipt of request for transfer of borrowal account, either from the borrower or from a bank / financial institution which proposes to takeover the account, the consent or otherwise i.e. objection of the Bank, if any, shall be conveyed within 21 days from the date of receipt of request.
  6. Grievance redressal:
    1. Disputes in regard to sanction of loans and advances coming under the powers of Branch Heads shall be referred to respective Regional Heads for redressal.
    2. Disputes in regard to sanctions coming under the powers of Regional Heads, shall be the referred to General Manager (Credit) at Head Office for redressal.
    3. Disputes in regard to sanctions coming under the powers of General Manager (Credit) at Head Office shall be referred to the Chairman.
 
 
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