PocketRupee Allen's Housing & Finance Limited

FAIR PRACTICES CODE
OF
ALLEN'S HOUSING & FINANCE LIMITED

CONTENTS

A. INTRODUCTION

The Fair Practices Code ("FPC") is intended to furnish borrowers with a clear and comprehensive understanding of the standards and practices adopted by the Company in the conduct of its lending operations. The objective of the FPC is to promote transparency, fairness, and informed decision-making by ensuring that borrowers are adequately apprised of the financial facilities and services made available by the Company.

The Code sets out the overarching principles governing the Company's dealings with borrowers, including, inter alia, the requirement to provide full and accurate disclosure of the terms and conditions applicable to loans, as well as the procedures to be adhered to in the processing, servicing, and administration of such facilities. Through these measures, the FPC seeks to uphold ethical business practices and foster trust and accountability in the Company's relationship with its borrowers.

Allen's Housing & Finance Limited ("The Company") is a company incorporated under The Companies Act, 2013. It is a Non- Banking Financial Company registered with the Reserve Bank of India ("RBI") presently engaged in the business of providing microfinance services to the needy and to achieve its objective for social upliftment. The Company has framed and adopted this Fair Practice Code ("Code" or "FPC") which sets out the principles for fair practice standards when dealing with customers in accordance to the Reserve Bank of India ("RBI) vide Master Direction - Reserve Bank of India (Non-Banking Financial Company -Scale Based Regulation) Directions, 2023 (as amended from time to time) ("RBI Master Directions"). Accordingly, to ensure compliance with the directions of the Bank, the Code duly approved by the Board of Directors is adopted for implementation. This FPC applies to all categories of products and services offered by the Company through digital lending platform (currently offered or which may be introduced at a future date).

This Policy would be effective from the date of approval of the Board and would be subject to amendments in accordance with Regulations, Circulars, Notifications etc as maybe issued by the regulatory authorities, from time to time. In case of any inconsistencies in the policy with any amendments, circulars, clarifications etc issued by the authorities from time to time, then such amendments shall prevail upon the provisions of this policy.

B. OBJECTIVES

  1. I. To promote fair, ethical, and trustworthy practices by establishing minimum standards in all dealings with customers.
  2. II. ii. To enhance transparency by enabling customers to better understand the products offered, make informed decisions, and form reasonable expectations regarding the services provided.
  3. III. iii. To ensure strict compliance with applicable legal and regulatory requirements, particularly in matters relating to the recovery of advances.
  4. IV. iv. To foster and maintain customer confidence in the Company.
  5. V. To encourage and sustain a fair, transparent, and cordial relationship between the Company and its customers.
  6. VI. To strengthen and maintain effective mechanisms for the redressal of customer grievances.

C. FAIR PRACTICES CODE

The Company shall conduct its business in accordance with all applicable statutory and regulatory requirements, while maintaining a strong emphasis on operational efficiency, customer orientation, and sound corporate governance practices. In addition, the Company shall adhere to the Fair Practices Code in the discharge of its functions. The key commitments to its customers are set out below:

The Company shall act fairly and reasonably in all its dealings with customers by:

  1. I. Complying with the commitments and standards prescribed under this Code in respect of the products and services offered, and ensuring that its procedures and practices, including those followed by its staff and employees, are consistent with the same.
  2. II. Ensuring that its products and services comply with all applicable laws and regulations in force in India.
  3. III. Conducting all dealings with customers in accordance with the ethical principles of integrity and transparency.
  4. IV. Addressing issues and deficiencies promptly and empathetically by:
    –Rectifying errors in a timely manner;
    –Handling customer grievances expeditiously; and
    – Informing customers of the escalation mechanism available to them in the event they remain dissatisfied with the resolution provided.
  5. V. Publicising this Code by displaying it on the Company's website and making copies available to customers upon request.
  6. VI. Guiding the customers' how to take their complaint forward if they are still not satisfied with the resolution.

D. COMPLIANCE REQUIREMENT UNDER FAIR PRACTICE CODE

I. DISCLOSURE TO CUSTOMERS:

i. The Company shall assist customers in selecting products and services that best meet their needs and shall provide clear and comprehensive information outlining the key features of the products and services in which they express interest. The Company shall inform customers of the documentation required to establish their true identity and address, as well as any additional documents necessary to comply with applicable legal and regulatory requirements, including those prescribed under the "Know Your Customer" (KYC) framework. Further, the Company shall provide transparent information regarding the applicable annualised interest rates, fees, charges, and any other costs associated with the products and services offered.

II. APPLICATIONS FOR LOAN AND THEIR PROCESSING

i. Loan application forms shall contain all material information that may affect the interests of the borrower, thereby enabling a meaningful comparison with the terms and conditions offered by other Non-Banking Financial Companies (NBFCs) and facilitating an informed decision. The application form shall clearly specify the documents required to be submitted along with the application. All communications with the borrower shall be in the vernacular language or in a language understood by the borrower.

ii. In the case of digital lending products, the sanction letter shall be accompanied by a standardized Key Fact Statement (KFS), providing details of the Annual Percentage Rate (APR), recovery mechanism, grievance redressal mechanism, and all applicable fees and charges in respect of the proposed loan. The Company shall establish a system for acknowledging receipt of all loan applications.

iii. Prior to sanctioning any loan, the Company shall assess the borrower's repayment capacity. For this purpose, it shall evaluate all documents and information submitted to verify the borrower's creditworthiness, which shall constitute an important parameter in processing the loan application. The proposal shall be evaluated at the Company's sole discretion and in accordance with its internal policies, norms, and procedures. As a matter of general policy and customer service, loan applications shall ordinarily be sanctioned or rejected within a reasonable timeframe.

III. LOAN APPRAISAL AND TERMS AND CONDITIONS

i. All communications to the borrower shall be in the vernacular language or in a language understood by the borrower. The company shall convey, in writing via email or other appropriate means, the sanction of the loan to the borrower in English or in a vernacular language understood by the borrower. Such communication, through the Key Fact Statement (KFS), Loan Agreement, sanction letter, or otherwise, shall specify the loan amount sanctioned and the key terms and conditions, including but not limited to the annualized rate of interest, fees and charges, penal charges, loan tenure, commencement date, repayment schedule, and due dates. The Company shall retain on record the borrower's acceptance of these terms and conditions.

ii. Allen's Housing & Finance Limited shall verify loan applications within a reasonable period. If additional details or documents are required, the borrower shall be informed promptly.

iii. At the time of loan disbursement, Allen's Housing & Finance Limited shall furnish to the borrower a copy of the digitally signed loan agreement, along with a copy of all enclosures, preferably in the vernacular language or in English as understood by the borrower, along with copies of all enclosures referred to therein. Upon execution of the loan contract, the Company shall share the digitally signed documents including the KFS, loan application form, sanction letter, terms and conditions, and the privacy policy of the Lending Service Provider (LSP) or Digital Lending Application (DLA), as applicable through the borrower's registered email address and/or SMS.

iv. Penal charges for late repayment shall be prominently disclosed in bold in the loan agreement and sanction letter. No interest, charge, or fee other than those specified in the sanction letter or KFS shall be levied upon or be binding on the borrower.

v. In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise i.e. objection of Allen's Housing & Finance Limited, if any, should be conveyed within 21 days from the date of receipt of request. Such transfer shall be as per transparent contractual terms in consonance with law.

IV. DISBURSEMENT OF LOANS INCLUDING CHANGES IN TERMS AND CONDITIONS

i. The Company is committed to openness and transparency in its operations. The Company shall inform borrowers, in the language understood by the borrower, of any modifications in the terms and conditions of the loan, including changes relating to the disbursement schedule, interest rates, penal charges, service charges, prepayment charges, or any other material changes affecting the customer's relationship with the company.

ii. Any changes in interest rates or charges shall be implemented only on a prospective basis, and prior notice of such changes shall be provided to the borrower. Appropriate provisions to this effect shall be incorporated in the loan agreement.

iii. Unless otherwise permitted or required under applicable laws or regulations, the complete disbursal of the loan amount shall be made directly to the borrower's bank account, without routing through any pass-through or intermediary accounts.

iv. The company shall devise a system of giving acknowledgement of receipt of all loan applications. The time frame within which the loan application will be disposed off shall be included in the application.

v. The company shall give written notice to the borrower of any changes in terms and conditions including disbursement schedule, interest rates, service charges, pre-payment charges etc. The company acknowledges its responsibility to ensure that changes in interest rates and charges are effected only prospectively. The suitable condition in this regard shall be included in the loan agreement in the company. The company shall release all dues on or realisation of the outstanding amount of loan subject to any legitimate right of lien for any other claim NBFC's may have against borrowers. If such right is set off to be exercised, the borrower shall be given notice about the same with full particulars about the remaining claims and the conditions under which the companies are entitled to retain the relevant securities till the relevant claim is settled or paid.

V. RECOVERY OF LOAN

Repayment and Recovery of Dues

i. At the time of granting the loan, the Company shall clearly explain to the customer the repayment obligations, including the amount, tenure, and periodicity of repayment as specified in the EMI schedule.

ii. In the event of non-adherence to the repayment schedule, the Company shall follow a defined recovery process in accordance with applicable laws. Such process may include issuing reminders to the borrower through email, telephone calls, SMS, or through authorized collection agents from empanelled collection agencies, whose details shall be communicated to the borrower in advance. Any employee, representative, or third party authorized by the Company to collect dues shall identify himself/herself as an authorized representative of the Company and, upon request, display a valid identity card issued by the Company or by an authorized agency acting under its authority.

iii. The Company shall provide customers with relevant information regarding overdue amounts. Staff engaged in collection and recovery shall be adequately trained to interact with customers in a professional and appropriate manner. All repayments, collections, or recoveries shall be made strictly through the Allen's Housing & Finance Limited application or through a repayment link sent to the borrower's registered contact details, ensuring that funds are credited directly to the Company's designated bank account without any pass-through or intermediary accounts.

During visits to a customer's premises for the purpose of dues collection and/or repossession of security, the following guidelines shall be observed:

  1. i. The customer shall ordinarily be contacted at a place of his or her choice. In the absence of any specified place, contact shall be made at the place of residence and, if unavailable there, at the place of business or occupation.
  2. ii. The identity of the representative and his/her authority to act on behalf of the Company shall be disclosed at the first instance.
  3. iii. The customer's privacy shall be respected at all times.
  4. iv. All interactions with the customer shall be conducted in a civil and respectful manner.
  5. v. The Company or its authorized representatives shall not use threatening or abusive language, nor resort to intimidation, coercion, or violence, or threaten harm to the borrower, the borrower's family, assets, or reputation. The Company shall not harass relatives, friends, or co-workers of the borrower.
  6. vi. Representatives of the Company shall contact customers only between 8:00 a.m. and 7:00 p.m., unless special circumstances relating to the customer's business or occupation require otherwise.
  7. vii. The Company shall not publish the names of borrowers.
  8. viii. All reasonable assistance shall be provided to resolve disputes or differences in a mutually acceptable and orderly manner.
  9. ix. Decency and decorum shall be maintained during visits to the customer's premises.
  10. x. The collection process shall strictly adhere to the Board-approved Collection Policy of the Company.

VI. GENERAL

i. Non-Interference: The Company shall not interfere in the affairs of the borrower except as expressly permitted under the terms of the loan agreement, or where any material information, not previously disclosed by the borrower, comes to the notice of the Company. The Company shall remain responsible for any misconduct or inappropriate behaviour by its employees or by personnel of any outsourced agency and shall ensure prompt and effective grievance redressal.

ii. Recovery Process: If any recovery proceedings need to be initiated, these shall be conducted in accordance with the company' polices and rights provided under the Agreement and also in accordance with legally accepted norms. Allen's Housing & Finance Limited staff or any person authorized to represent the Company including the Lending Service Provider "LSP" in collection of dues shall identify himself / herself.

iii. In the matter of recovery of loans, the Company, its agents and its LSP shall ensure that they do not resort to intimidation or harassment of any kind, either verbal or physical, against any person in their debt collection efforts, including acts intended to humiliate publicly or intrude upon the privacy of the borrowers' family members, referees and friends, sending inappropriate messages either on mobile or through social media, making threatening and/ or anonymous calls, persistently calling the borrower and/ or calling the borrower before 8:00 a.m. and after 7:00 p.m. for recovery of overdue loans, making false and misleading representations, etc.. The Company shall ensure that the staff is adequately trained to deal with the customers in an appropriate manner.

iv. The Company may not reveal transaction details of the borrowers to any other persons except under the following circumstances:

  1. i. The information is required to be disclosed by any applicable law, any direction, request or requirement of Government authority.
  2. ii. The information is required by the auditor, professional advisors, agents or any third- party service providers of the lenders who are under duty of confidentiality.
  3. iii. The information is required by any person with which the lender may enter into any transfer, assignment, participation or other agreements.
  4. iv. If the information is required by other banks if the borrower has availed any facility from them or any credit information bureau.

v. In case of loans sourced through digital lending platforms, the Company shall ensure the following -

  1. i. Names of digital lending platforms engaged as agents shall be disclosed on the website of the Company.
  2. ii. Digital lending platforms engaged as agents shall disclose upfront to the customer that they are interacting with the customer on behalf of the Company.
  3. iii. Immediately after sanction but before execution of the loan agreement, the sanction letter shall be issued to the borrower on the letter head of the Company.
  4. iv. Effective oversight and monitoring shall be ensured over the digital lending platforms engaged by the Company.
  5. v. The company shall take measures to create awareness about its grievance redressal mechanisms.

vi. The company shall not charge the foreclosure charges and pre-payment penalty on the floating rate loans given to the individual borrower.

vii. The company shall not discriminate on the grounds of gender, caste, religion, visually impaired or physically challenged applicants on the ground of disability in extending products, services, facilities etc. It shall render all possible assistance to such persons for availing the loan facilities offered by it subject to compliance with board approved policies and prescribed RBI directions and guidelines.

VII. GRIEVANCE REDRESSAL OFFICER

i. A grievance redressal mechanism within the organization has been set up to resolve disputes arising in this regard. This mechanism will ensure that all the disputes arising from the decisions of the company's functionaries have been disposed of at least at the next higher level. The details of grievance redressal policy and grievance redressal officer is available on the company website at https://allenhf.in/.

ii. The Company shall take steps to create awareness about its grievance redressal mechanism.

iii. Foreclosure charges/ Pre-payment penalties on floating rate term loans:
As a measure of customer protection and to bring uniformity with regard to pre-payment of loan, the company shall not charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers.

iv. The Board of Directors of Allen's Housing & Finance Limited should also lay down the appropriate grievance redressal mechanism within the organization to resolve disputes arising in this regard. Such a mechanism should ensure that all disputes arising out of the decisions of lending institutions' functionaries are heard and disposed of at least at the next higher level. The Board of Directors should also provide for periodical review of the compliance of the Fair Practices Code and the functioning of the grievance's redressal mechanism at various levels of management. A consolidated report of such reviews may be submitted to the Board at regular intervals, as may be prescribed by it.

v. Non-discrimination: The Company shall not discriminate on the grounds of gender, caste, or religion, visually impaired or physically challenged applicants on the ground of disability in extending products, services, facilities, etc. It shall render all possible assistance to such persons for availing the loan facilities offered by it subject to compliance with its Board approved policies and prescribed RBI/ Directions, guidelines.

Grievance Redressal Officer :

Address : Centura Square, Unit 113 1st Floor Plot No B-44 & B-44A. Road No 27, Wagle Estate, MIDC, Thane (W) 400 604.

Telephone Number : 7208002957

Email ID : support@phrenological.com

If the grievances / complaints are not resolved within a period of 1 month, the customer may appeal to the Officer-in-Charge of the Regional Office of DNBS of RBI at 15, Netaji Subhas Road, Kolkata - 700001, West Bengal.

VIII. KNOW YOUR CUSTOMER GUIDELINES

i. Allen Housing Finance Ltd shall explain the KYC requirements to its customers and inform them regarding the documents required for establishing the identity of the customer before sanctioning the loan or account opening or any kind of operations. The company discloses that it shall obtain only that information which meets with the company's KYC, Anti Money Laundering or any other statutory requirements. In case additional information is asked for, it will be sought separately.

IX. INTEREST CHARGED

i. To ensure that the customers are not charged excessive interest rate and charges on loans and advances by the company, the board of the company has adopted a policy for determining the interest rates, processing and other charges. The rate of interest and the approach for graduations of risk and rationale for charging different rate shall be in accordance with the company policy. The same is also available on the website of the company.

ii. The quantum and penal charges of the interest charged is disclosed in the loan agreement of the company as well as on the website, the company has to determine the rate of interest charged for loans and advances.

iii. The Board of Allen's Housing & Finance Limited shall adopt an interest rate model taking into account relevant factors such as, cost of funds, margin and risk premium, etc and determine the rate of interest to be charged for loans and advances. The rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers shall be disclosed to the borrower or customer in the application form and communicated explicitly in the sanction letter.

iv. The rates of interest and the approach for gradation of risks shall also be made available on the website of the companies or published in the relevant newspapers. The information published in the website or otherwise published should be updated whenever there is a change in the rates of interest.

v. The rate of interest will be annualised rates by Allen Housing Finance Ltd, so that the borrower is aware of the exact rates that would be charged to the account.

X. WIDE DISSEMINATION AND PERIODIC REVIEW

i. The company shall put the above Fair Practices code on its website for the information of various stakeholders. The company will also review and refine the code as maybe required periodically.