Fair Practice Code
Midland Microfin Ltd. (MMFL) is committed to dealing with its customers in a fair and transparent manner. As a Non-Banking Financial Company (NBFC), the Company has put in place a Fair Practice Code that incorporates both the RBI’s guidelines on fair practices for NBFCs, as well as other self-regulatory organizations.
1. MMFL’s commitment
1.1 To act honestly, fairly and reasonably in conducting microfinance activities and to deal our customers on the ethical principles of integrity and transparency.
1.2 To not discriminate against clients on the basis of gender, race, caste, religion or language and to treat all the clients consistently and fairly.
1.3 To prominently display the Fair Practice Code in vernacular language on the notice board at the Head Office and all the branches, and put systems in place to ensure compliance. Moreover, MMFL always welcomes new ideas and suggestions from its clients. For this, the suggestion boxes are placed at the Head and Branch Offices.
1.4 To ensure transparency in the maintenance of books of accounts and disclosure of financial statements by qualified auditor/s.
1.5 To place before the Board of Directors within 2 months of the end of every half financial year as on September 30th and March 31st, a Compliance/ Management Report indicating the extent of compliance with the Fair Practice Code and the functioning of Grievance Redressal Mechanism (specifically indicating any deviations and reasons therefore) as at the end of said half financial year.
1.6 The Code will be publicized by us through our website.
2. Applications for availing loans and their processing
2.1 At the time of applying for a loan, the applicant is fully appraised of the terms and conditions attached to the sanction of the loan through various meetings, so that she/ he is able to make an informed decision.
2.2 She/ he will be given the contact number of the concerned Centre Officer and Branch Manager from whom she/ he can enquire about developments in the loan process.
2.3 The credit application form of MMFL seeks detailed information about the borrower and his/her family including their financial means. If any additional details/ documents are required, the same shall be intimated to the borrowers. The need for such information and documents shall be explained to the customer and reasonable time shall be provided for submission of the same.
2.4 As many customers do not have documents to support all the information, information is collected through a personal visit, observation and discussion with the customer. Subsequently, MMFL seeks an appointment at a convenient time for the client to complete the credit application form.
2.5 Information so obtained is used by MMFL to take a credit decision and enables both MMFL and the borrower to exercise caution in respect of the amount borrowed.
2.6 MMFL undertakes to give to the borrowers, an acknowledgement of the receipt of all loan applications and to convey its decision to the applicant within 30 working days after the loan application form is completed. (A form is considered complete once all information has been duly received and filled in, and required documents have been submitted and found acceptable).
3. Loan appraisal and terms/conditions
3.1 MMFL places great emphasis on explaining all terms and conditions orally to its customers at the loan disbursement stage by way of a pre-disbursement session. MMFL shall also provide 3 days mandatory training to its borrowers free of cost and also make the borrowers fully aware of the procedure of availing the loan.
3.2 To reinforce the understanding, the terms and conditions and responsibilities are reiterated at the time of application, sanction and disbursement.
3.3 The terms and conditions explained to the borrower include, but are not limited to the following:
a)Compliance with KYC guidelines of RBI.
b)The manner of repayment of the loan.
c) The fact that each member jointly and severally guarantees the liability of the other for repayment of the loans of the other group members
d)The loan amount and tenure, rate of interest, method of application as well as other charges.
e)The frequency of repayment – whether weekly, fortnightly or monthly.
3.4 MMFL undertakes to give due notice for any change in the conditions of the loan specially pertaining to interest rate and periodicity, quantum of installments and tenure of loan/(any changes in the loan process/procedures).
4. Disbursement of loans including changes in terms and conditions
4.1 MMFL informs customers clearly about all the terms and conditions of the loan, the advantages of timely repayments and the consequences of non-repayment of outstanding loans.
4.2 MMFL ensures that changes in interest rates and charges are effected only prospectively.
5. Recovery of Loans
5.1 MMFL will ensure that its decision to recall/ accelerate payment based on performance is in consonance with the loan agreement.
5.2 In the matter of recovery of outstanding dues of its borrower, MMFL does not resort to undue harassment viz. the use of muscle power for recovery of loans, etc. MMFL also ensures that it does not charge any loan prepayment fee and/ or penalty to its borrowers for delayed payments.
5.3 While enforcing its rights as a lender strictly, MMFL believes in polite language and abjures the use of abusive and harsh words. MMFL is accountable for preventing inappropriate staff behavior.
5.4 MMFL undertakes to release all securities if any on repayment of all dues or on realization of the outstanding amount of loan, subject to any legitimate right or lien for any other claims it may have against the borrower.
5.5 If any such right of set off is to be exercised, the borrower shall be given notice about the same with full particulars about the remaining claims and the conditions under which MMFL is entitled to retain the securities if any, till the relevant claim is settled/ paid.
6. Client protection principles
6.1 MMFL will take reasonable steps to ensure that credit will be extended only if borrowers have demonstrated an adequate ability to repay and loans will not put borrowers at significant risk of over-indebtedness. Similarly, MMFL will take adequate care that non-credit financial products (such as insurance) extended to low-income customers are appropriate.
6.2 The pricing, terms, and conditions of financial products (including interest charges, insurance premiums and fees) will be transparent and will be adequately disclosed in the application form understandable to clients.
6.3 The privacy of individual customer data will be respected, and such data cannot be used for other purposes without the express permission of the customer.
6.4 MMFL is accountable for preventing inappropriate staff behavior.
7. Grievance Redressal Mechanism
7.1 The Company has adopted Grievance Redressal Mechanism. In case a Company’s staff is involved in any kind of misbehavior, disciplinary action against such staff shall be taken immediately. All the grievance related to staff will be taken through firstname.lastname@example.org and also through the contact number 0181 – 508 5555 and 508 6666.
7.2 All the branches have suggestion and complaint box in their premises where customers can make their grievances. All the customers have access to higher level staff (i.e. Branch Manager/ Cluster Manager) to highlight and discuss their issues/ grievances. The senior staff at field level has been empowered to take certain actions/ decisions to address the issues/ grievance of our customers immediately. Moreover, Register of Complaints is maintained at Head Office where all the grievances/ complaints are registered.
7.3 In order to ensure that all the disputes arising out of the decisions of the Company’s functionaries are heard and disposed of at least at next higher level, customers may contact the Grievance Redressal Officer as follows :
Customer may send a letter to :
Mr. Amitesh Kumar
Grievance Redressal Officer
The AXIS, Plot No.1, R.B. Badri Dass Colony,
BMC Chowk, G.T Road ,Jalandhar-144001
e-mail – email@example.com
7.4 All the grievances will be address by the Company within 30 days of receipt of grievance at the following levels –
- Complaint to be resolved by field functionaries under the direct intervention of Cluster Head – 3 days
- To be escalated to Vice president and resolved – 7 days from receipt of complaint
- To further escalate of Managing Director – 15 days from receipt of complaint
- To HO Executive Committee – 21 Days from receipt of complaint
- To Board management Committee – 30 Days from receipt of complaint
7.5 It shall be the endeavor of the company to resolve the complaint on the priority (not later than one month) to the entire satisfaction of the customer. If the complaint/ grievance is not resolved within one month from the date of receiving the complaint/ grievance, the customer may contact the Nodal Officer of the Reserve Bank of India as per following details
Designation Deputy General Manager – Nodal Officer
Contact Address DNBS, RBI, Sector 17, Central Vista, Chandigarh
Contact No. 0172 – 2540350
8.1 MMFL refrains from interference in the affairs of the borrower except for the purposes provided in the terms and conditions of sanction of the loan (unless new information, not earlier disclosed by the borrower, has come to the notice of the lender).
8.2 In case of receipt of request for transfer of borrowal account, either from the borrower or from a lender which proposes to take over the account, the consent or otherwise i.e. objection of the MMFL, if any, would 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.
The Board of Directors shall periodically review the compliance of Fair Practice Code and the functioning of Grievance Redressal Mechanism once in half year.