TERMS & CONDITION

As all MFIN Member MFIs are guidelines follow by the Reserve Bank of India (RBI), they are already required to follow all prudential norms as well as consumer protection practices laid down by the RBI. This TERMS & CONDITION is designed to ensure that the RBI Guidelines are followed in both letter and spirit, and in some matters, lays down additional requirements.

• FAIR PRACTICES WITH BORROWERS.
• Communication of charges

All members should clearly convey to the borrowers the following terms of the loan (at the minimum):

• All the important terms and conditions of the loan agreement
• Declining rate of interest
• Processing fee
• Any other charges
• Security or any other deposit.
• Systematic advance collections
• Total charges recovered for insurance coverage risks covered
• Any other services rendered and charges for the same

The communication should be in writing through any/various of the following ways:

• Individual sanction letter
• Loan card
• Loan schedule
• Passbook
• Through Group/Centre meetings (Details can be printed on a paper and all borrowers can sign on the same as acknowledgement of their acceptance)

The communication should be in a medium understood by the borrower

• Nature and amount of charges

The TERMS & CONDITION will not specify the nature and quantum of charges to be charged by individual MFIs. However, the transparency of the same should be ensured as covered in clause ( I.i.)

• Recovery mechanism
• Though each MFI tries to ensure on-time recovery of dues, it is imperative that they shall not use any abusive, violent, or unethical methods of collection and recovery efforts should be in line with guidelines issued from RBI from time to time.
• A valid receipt (in whatever form as decided by each member) should be provided for each collection from the borrower.

Multiple Lending & Lending Limits

• The maximum number of MFIs who can lend to one client is three, and the maximum loan outstanding that all the three MFIs together can have to a single client is restricted to Rs. 50,000/- at any point in time.
• This cap will cover only unsecured loans given within the joint liability group mechanism or mutual guarantee of all types.
• Any secured loans or individual business loans will not be covered under this cap.
• The code will not cover the credit norms to be fixed by individual member MFIs.
• Data sharing / Incident sharing.

CLIENTS GRIEVANCE HANDLING

Gk policy on customer grievance redressal is based on the following principles

• All initiatives and strategies of GK will be customer focused.
• Transparency, Prompt and efficient customer service.
• Clients are being educated on the existence and process of grievance redressal mechanism during the three days CGT. They are also provided with phone numbers of Relationship Officers and Branch Officers in case they have any grievances.
• GK treats all complaints efficiently and fairly so as to not damage or tarnish the company's reputation and affect its business otherwise.
• GK endeavors that its employees work in good faith and without prejudice to the interests of the client.

The following procedure for the redressal of client's grievance has been devised to be observed at branches and head office:

• To Log a complaint / grievance toll free phone number has been provided on the Pass Book which is provided to the client. Clients are being educated during three days CGT that in the event of any grievance, clients can call on the given numbers and directly talk to the officials at the Head Office.
• All the field officers are given induction as well as refresher training on the grievance redressal process.
• Branch Manager and Area Manager are required to make surprise centre visits to meet clients and seek feedback about the working of the company and field staff for continuous improvement and to record grievance if any and forward the same to the Head Office for further action.
• A complaint process chart is placed on the notice board of every branch offices clearly stating the process of grievance redressal system in vernacular language at the branch level.