MUTHOOT HOMEFIN (INDIA) LIMITED

Transcription

1

2 MUTHOOT HOMEFIN (INDIA) LIMITED 2

3 Contents o o o o o o o MUTHOOT HOMEFIN (INDIA) LIMITED 3

4 MUTHOOT HOMEFIN (INDIA) LIMITED 4

5 MUTHOOT HOMEFIN (INDIA) LIMITED 5

6 (A) MUTHOOT HOMEFIN (INDIA) LIMITED 6

7 o o MUTHOOT HOMEFIN (INDIA) LIMITED 7

8 (B) A. B. i. ii. MUTHOOT HOMEFIN (INDIA) LIMITED 8

9 C. i. ii. iii. D. E. MUTHOOT HOMEFIN (INDIA) LIMITED 9

10 MUTHOOT HOMEFIN (INDIA) LIMITED 1. INTRODUCTION The Board of Directors of Muthoot Homefin (India) Limited ( MHIL or the Company ) in its meeting held on adopted Know Your Customer and Anti Money Laundering Measures to know/understand their customers and their financial dealings better which in turn help them manage their risks prudently and housing finance companies (HFCs) from being used, intentionally or unintentionally, by criminal elements for money laundering activities. As per NHB guidelines on KYC policy, MHIL is required to have its KYC policy for its lending / credit operations/ financial dealings in line with extant guidelines framed therein. This KYC policy is also framed keeping in mind the same. The policy has the following four key elements: i. Customer Acceptance Policy; ii. Customer Identification Procedures; iii. Monitoring of Transactions; and iv. Risk management. 2. a) A person or entity that maintains an account and/or has a business relationship with the HFC; b) One on whose behalf the account is maintained (i.e. the beneficial owner); c) Beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers, Chartered Accountants, Solicitors, etc. as permitted under the law, and d) Any person or entity connected with a financial transaction which can pose significant reputational or other risks to the HFC, say, a wire transfer or issue of a high value demand draft as a single transaction. 3. CUSTOMER ACCEPTANCE POLICY (CAP) The Customer Acceptance Policy will ensure the following aspects of customer relationship: i. No account is opened in anonymous or fictitious/benami name(s); MUTHOOT HOMEFIN (INDIA) LIMITED 10

11 ii. iii. Documentation requirements and other information to be collected in respect of different categories of customers depending on perceived risk and keeping in mind the requirements of Prevention of Money Laundering Act, 2002 (Central Act No. 15 of 2003) (hereinafter referred to as PMLA ), rules framed thereunder and guidelines issued from time to time; iv. Not to open an account or close an existing account where the Company is unable to apply appropriate customer due diligence measures, i.e. MHIL is unable to verify the identity and /or obtain documents required as per the risk categorisation due to noncooperation of the customer or nonreliability of the data/information furnished to MHIL. v. Permanent address proof from new applicants will be collected. The documents which can be accepted as proof of address are mentioned in Annexure I vi. For existing customers who wish to pre close their loan account with MHIL following will be collected: a. Permanent Address Proof (As per Annexure I) b. A declaration from the customer regarding source of funds being used for preclosure of the loan account Closure of the loan account authority will be restricted to authorised person at the branch vii. In the following circumstances, the account may be operated by a mandate holder or the account may be opened by an intermediary in a fiduciary capacity hence the customer is permitted to act on behalf of another person / entity in conformity with the established law and practices a. If applicant is NRI / PIO b. If applicant is a limited company c. If applicant is a partnership firm viii. 4. MUTHOOT HOMEFIN (INDIA) LIMITED 11

12 5. As per KYC policy, for acceptance and identification, customers are categorised broadly into low risk, medium risk and high risk categories: i. Low Risk Customers, for the purpose of this policy, will be individuals and entities whose identities and sources of wealth can be easily identified, have structured income and transactions in whose accounts by and large conform to the known profile. Illustrative examples of low risk customers could be: a. Salaried applicants with salary paid by cheque b. People belonging to government departments c. People working with government owned companies, regulators and statutory bodies etc d. People belonging to lower economic strata of the society whose accounts show small balances and low turnover e. People working with Public Sector Units f. People working with reputed Public Limited Companies and Multinational Companies ii. Medium Risk Customers would include: a. Salaried applicants with variable income/unstructured income receiving salary in cheque b. Salaried applicants working with Private Limited Companies c. Self Employed Professionals other than HNIs d. Self Employed customers with sound business and profitable track record for a reasonable period MUTHOOT HOMEFIN (INDIA) LIMITED 12

13 iii. e. High Net worth individuals with occupational track record of more than 3 years High Risk Customers that are likely to pose a higher than average risk to the Company may be categorised as high risk customers depending on customer s background, nature and location of activity, country of origin, sources of funds and his client profile, etc. The Company will examine the case in detail based on the risk assessment as per our credit risk policy. Examples of high risk customers requiring higher due diligence may include: a. Nonresident customers b. High net worth individuals, without an occupational track record of more than 3 years c. Trusts, charities, NGOs and organisations receiving donations d. Companies having close family shareholding or beneficial ownership e. Firms with sleeping partners f. Politically exposed persons (PEPs) of foreign origin g. Non face to face customers h. Those with dubious reputation as per available public information etc MHIL s exposure to any client is subject to the credit risk policy of the company. However, for customer acceptance, KYC is a prerequisite for a credit risk grading 6. CUSTOMER IDENTIFICATION PROCEDURE 1. Customer identification means identifying the customer and verifying his/her/its identity by using reliable, independent source documents, data or information while establishing a relationship. The Company will obtain sufficient information such as Voter ID card, PAN, Passport etc necessary to establish, to our satisfaction, the identity of each new customer, whether regular or occasional and the purpose of the intended nature of relationship It will be ensured that due diligence is observed based on the risk profile of the customer in compliance with the extant guidelines in place and the same will be available for verification. Besides risk perception, the nature of information/documents required will also depend on the type of customer (individual, corporate etc). For customers that are natural persons, the Company will obtain sufficient identification data to verify the identity of the customer, his/ MUTHOOT HOMEFIN (INDIA) LIMITED 13

14 her address/location and also his/her recent photograph. The Company will collect identity proof, bank account details and property documents and verify the applicant s occupation, residence and documents as applicable For customers that are legal persons or entities, MHIL will i. Verify the legal status of the legal person/entity through proper and relevant documents ii. Verify that any person purporting to act on behalf of the legal person/entity is so authorised and identify and verify the identity of that person and For (i) & (ii) Memorandum of Association and board resolution will be collected to ensure that the person purporting to act on behalf of the legal person/entity is authorised to do so, apart from applicable field/document investigations. In case of partnership firm, a copy of partnership deed along with the registration certificate of the firm, if registered and power of attorney in favour of the person purporting to act on behalf of the firm shall be collected In order to authenticate the identity of the person so purporting to represent the Company / Firm, signature verification / attestation shall be done either from the Banker or copy of passport, driving license or pan card to be taken. iii. Understand the ownership and control structure of the customer and determine the natural persons who ultimately control the legal person. For this, the Company will collect shareholding letter duly certified by the Company Secretary/company's Auditor/Chartered accountant and necessary Resolution / authorisation etc 2. i. Nonresident customers due diligence including verification of employment of the customer, collection of a local guarantor & power of attorney along with their identification proofs and verification of their residence/office will be done, if found necessary. ii. High net worth individuals with less than three years occupational track record due diligence including personal discussion with the applicant, analysis of bank statement and financial statements will be done, details of client profile, sources of fund will be obtained, if required. MUTHOOT HOMEFIN (INDIA) LIMITED 14

15 iii. Trusts, charities, NGOs and organizations receiving donations, as and when such cases are received due diligence to be undertaken as for other cases in the high risk categories. iv. Companies having close family shareholding or beneficial ownership due diligence including personal discussion with the applicant will be done. In case of company's proportionate income being considered to the extent of the customer's Shareholding in the company board resolution authorising the director(s) to sign on behalf of the company will be collected. Also, signature verification of the person(s) issuing the board resolution will be collected, if necessary. v. Firms with 'sleeping partners' due diligence including personal discussion with the applicant will be done. If income of the partnership firm is being considered, the Company will collect a letter signed by all the partners authorising the concerned partner(s) to sign on behalf of the partnership to be continued. Also, signature verification of the person(s) issuing this authority letter will be collected, if necessary. vi. Politically exposed persons (PEPs) of foreign origin same due diligence as NRI/PIO to be undertaken, though the Company is not doing cases of applicants of foreign origin. Only cases of applicants of Indian Origin working abroad are done. vii. Nonface to face customers due diligence including telephonic/personal discussions be done, if required. Information from reliable sources will be obtained for establishing the existence of the person. viii. Those with dubious reputation as per public information available, etc If found dubious then the case will not be entertained. 3. Customer identification requirements in respect of a few typical cases, especially, legal persons requiring an extra element of caution are given below: i. Trust Nominee or Fiduciary Accounts: MUTHOOT HOMEFIN (INDIA) LIMITED 15

16 ii. Accounts of companies and firms The Company will be careful while processing the cases of business entities especially to establish that individuals are not using those entities for maintaining accounts with it. The Company shall seek information, if required, on the control structure of the entity, source of funds and the natural persons who carry a controlling interest in the management. These requirements may be moderated as per our credit risk policy and guidelines of the operations manual, for e.g. in the case of a public company it will not be necessary to identify all the shareholders. iii. iv. Accounts of Politically Exposed Persons (PEPs) resident outside India Politically exposed persons are individuals who are or have been entrusted with prominent public functions in a foreign country, e.g. Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of stateowned corporations, important political party officials, etc. The Company will gather sufficient information as available on any person/customer of this category intending to establish a relationship and check all the information available on the person in the public domain. The Company will verify the identity of the person and seek information about the sources of funds before accepting the PEP as a customer. The above norms may also be applied to the accounts of the family members or close relatives of PEPs v. Accounts of nonfaceto face customers: In the case of nonfacetoface customers, apart from applying the usual customer identification procedures, The Company will do telephonic/personal discussion with the applicant, if necessary. Applicant will be met by the Sales representative of the Company and will fill up the meeting sheet on that basis to mitigate the higher risk involved, as applicable. Certification of all the documents presented may be insisted upon and, if necessary, additional documents may be called for and applicable MUTHOOT HOMEFIN (INDIA) LIMITED 16

17 verification of these documents will be done. In the case of crossborder customers, there is the additional difficulty of matching the customer with the documentation and the Company may have to rely on third party certification/introduction. In such cases, it will be ensured that generally the third party is a regulated and/or supervised entity with an established track record. Hence apart from the existing due diligence for such customers The Company may take resident Indian Coapplicant as a party to the loan proposal or a local resident guarantor to the loan with identity verification. and type of documents that may be relied upon for customer identification is given in the Annexure I. 7. MONITORING OF TRANSACTIONS a) Ongoing monitoring is an essential element of effective KYC procedures. Since the Company is a housing finance company and all our loans are tenure based with a fixed/variable installment paid through electronic clearing system (ECS) mandate or postdated cheques, our monitoring structure will be relevant to our nature of operations. The Company will pay special attention to all unusually large transactions involving large cash and the Company has introduced cash transaction reporting system above Rupees ten lakhs. Risk categorization as is mentioned in this policy may be updated as and when required by the management. In case of overdue/default accounts where there is scope for meeting or vetting the profile of this customer again, due diligence, if found necessary, will be carried out. Subsequent to our sanction, during the period of part disbursement till full disbursement if any unusual transaction/development comes to our knowledge relating to money laundering the same will be verified and notified as required, The Company will ensure that a record of transactions in the accounts is preserved and maintained as required in terms of section 12 of PMLA, The Company will ensure that transactions of suspicious nature as defined in Annexure II and/or any other type of transaction notified under section 12 of the PMLA, 2002, is reported to the appropriate law enforcement authority, as and when detected by our officials through the Principal Officer. b) The Company will maintain proper record in accordance with PMLA, 2002, of all cash transactions (deposits and withdrawals) of Rupees Ten Lakh and above. No loan is disbursed in cash and no monthly installment above Rupees Ten Lakh is accepted in cash. Any transactions of suspicious nature as per Annexure II are to be reported to the Principal Officer immediately. In addition thereto, the Branches MUTHOOT HOMEFIN (INDIA) LIMITED 17

18 shall on monthly basis furnish a certificate to the Principal Officer evidencing that neither such prohibited transactions and/nor cash transaction as specified in the policy have taken place. 8. RISK MANAGEMENT a. Internal Audit: The Company's internal audit department will evaluate and ensure adherence to the KYC policies and procedures. As a general rule, the compliance function will provide an independent evaluation of the Company's own policies and procedures, including legal and regulatory requirements. Internal Auditors may specifically check and verify the application of KYC procedures at the branches and comment on the lapses observed in this regard. The compliance in this regard will be put up before the Audit Committee of the Board along with their normal reporting frequency. A compliance conformation from Branch will be obtained by the Principal Officer. b. Employee Training: c. d. e. NonCooperation by the customer in respect of KYC norms: MUTHOOT HOMEFIN (INDIA) LIMITED 18

19 f. Applicability to branches and subsidiaries outside India The guidelines shall also apply to the branches and majority owned subsidiaries located abroad, especially, in countries which do not or insufficiently apply the FATF Recommendations, to the extent local laws permit. When local applicable laws and regulations prohibit implementation of these guidelines, the same should be brought to the notice of National Housing Bank and RBI. g. Appointment of Principal Officer: h. Maintenance of Records of Transactions (As per Rule 3 of the Prevention of Money Laundering Rules 2005): i. all cash transactions of the value of more than rupees ten lakh or its equivalent in foreign currency; ii. all series of cash transactions integrally connected to each other which have been valued below rupees ten lakh or its equivalent in foreign currency where such series of transactions have taken place within a month and the aggregate value of such transactions exceeds rupees ten lakh; iii. all transactions involving receipts by nonprofit organizations of rupees ten lakhs or its equivalent in foreign currency; MUTHOOT HOMEFIN (INDIA) LIMITED 19

20 iv. v. all cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine and where any forgery of a valuable security or a document has taken place facilitating the transactions; and i. Information to be preserved: The Company will maintain the following information in respect of transactions referred to in the preceding point on Maintenance of records of transactions 1) The nature of the transactions 2) The amount of transactions and currency in which it was denominated 3) The date on which the transaction was conducted and 4) Parties to the transactions j. The Company will ensure that records pertaining to the identification of the customer and his address (e.g. copies of documents like passports, identity cards, driving licenses, PAN, utility bills etc.) obtained while opening the account and during the course of business relationship, are properly preserved for at least ten years after the business relationship is ended. Apart from this, the application form, copy of loan agreement, NOC, other document either photocopy or cancelled original copy will be kept for next ten years after the full closure of the account. However, preservation and maintenance of the documents will be in paper form and a soft copy. k. MUTHOOT HOMEFIN (INDIA) LIMITED 20

21 9. MUTHOOT HOMEFIN (INDIA) LIMITED 21

22 Annexure I CUSTOMER IDENTIFICATION PROCEDURE FEATURES TO BE VERIFIED AND DOCUMENTS THAT MAY BE OBTAINED FROM CUSTOMERS Features INDIVIDUALS Legal name and any other names used Correct permanent address Documents (Certified copy) (i) Passport (ii) PAN card (iii) Voter s Identity Card (iv) Driving license (v) Identity card (subject to the HFC s satisfaction) (vi) Letter from a recognized public authority or public servant verifying the identity and residence of the customer to the satisfaction of HFC. (i) Telephone bill (ii) Bank Account statement (iii) Letter from any recognized public authority (iv) Electricity bill (v) (vi) Ration card Letter from employer (subject to satisfaction of the HFC) (any one document which provides customer information to the satisfaction of the HFC will suffice) One recent passport size photograph except in case of transactions referred to in Rule 9(1)(b) of the PML Rules. COMPANIES Name of the company Principal place of business Mailing address of the company (i) (ii) (iii) Certificate of incorporation Memorandum & Articles of Association Resolution from the Board of Directors and Power of Attorney granted to its MUTHOOT HOMEFIN (INDIA) LIMITED 22

23 Telephone/Fax Number managers, officers or employees to transact business on its behalf (iv) An *officially valid document in respect of managers, officers or employees holding an attorney to transact on its behalf. (v) Telephone Bill. (i) Registration certificate, if PARTNERSHIP FIRMS registered Legal name Address Names of all partners and their addresses Telephone numbers of the firm and partners TRUSTS & FOUNDATIONS Names of trustees, settlers, beneficiaries and signatories Names and addresses of the founder, the managers/directors and the beneficiaries Telephone/fax numbers (ii) (iii) (iv) (v) (i) (ii) (iii) (iv) (v) (vi) (i) Partnership deed Power of Attorney granted to a partner or an employee of the firm to transact business on its behalf Any *officially valid document identifying the partners and the persons holding the Power of Attorney and their addresses. Telephone Bill in the name of firm/partners. Certificate of registration, if registered trust deed Power of Attorney granted to transact business on its behalf Any *officially valid document to identify the trustees, settlers, beneficiaries and those holding Power of Attorney, founders/managers/directors and their addresses Resolution of the managing body of the foundation/association. Telephone Bill. Resolution of the managing MUTHOOT HOMEFIN (INDIA) LIMITED 23

24 UNINCORPORATED ASSOCIATION OR BODY OF INDIVIDUALS (ii) (iii) (iv) body of such association or body of individuals Power of attorney granted to him to transact on its behalf An *officially valid document in respect of the person holding an attorney to transact on its behalf And such other information as may be required by the Company to collectively establish the legal existence of such association or body of individuals * Officially valid document is defined to mean Passport, Driving License, PAN card, Voter s Identity Card issued by the Election Commission of India or any other document as may be required by the HFC. MUTHOOT HOMEFIN (INDIA) LIMITED 24

25 Annexure II I. ILLUSTRATIVE LIST OF SUSPICIOUS TRANSACTIONS PERTAINING TO HOUSING LOANS: 1. Customer is reluctant to provide information, data, documents; 2. Submission of false documents, data, purpose of loan, details of accounts; 3. Refuses to furnish details of source of funds by which initial contribution is made, sources of funds is doubtful etc; 4. Reluctant to meet in person, represents through a third party/power of Attorney holder without sufficient reasons; 5. Approaches a branch/office of a HFC, which is away from the customer s residential or business address provided in the loan application, when there is HFC branch/office nearer to the given address; 6. Unable to explain or satisfy the numerous transfers in the statement of account/ multiple accounts; 7. Initial contribution made through unrelated third party accounts without proper justification; 8. Availing a topup loan and/or equity loan, without proper justification of the end use of the loan amount; 9. Suggesting dubious means for the sanction of loan; 10. Where transactions do not make economic sense; 11. There are reasonable doubts over the real beneficiary of the loan and the flat to be purchased; 12. Encashment of loan amount by opening a fictitious bank account; 13. Applying for a loan knowing fully well that the property/dwelling unit to be financed has been funded earlier and that the same is outstanding; 14. Sale consideration stated in the agreement for sale is abnormally higher/lower than what is prevailing in the area of purchase; 15. Multiple funding of the same property/dwelling unit; 16. Request for payment made in favour of a third party who has no relation to the transaction; 17. Usage of loan amount by the customer in connivance with the vendor/builder/developer/broker/agent etc. and using the same for a purpose other than what has been stipulated. 18. Multiple funding / financing involving NGO / Charitable Organisation / Small / Medium Establishments (SMEs) / Self Help Groups (SHGs) / Micro Finance Groups (MFGs) 19. Frequent requests for change of address; 20. Overpayment of instalments with a request to refund the overpaid amount MUTHOOT HOMEFIN (INDIA) LIMITED 25

26 II. ILLUSTRATIVE LIST OF SUSPICIOUS TRANSACTIONS PERTAINING TO BUILDER/PROJECT LOANS: 1. Builder approaching the HFC for a small loan compared to the total cost of the project; 2. Builder is unable to explain the sources of funding for the project; 3. Approvals/sanctions from various authorities are proved to be fake; MUTHOOT HOMEFIN (INDIA) LIMITED 26

27 MUTHOOT HOMEFIN (INDIA) LIMITED FAIR PRACTICES CODE Muthoot Homefin (India) Limited ( MHIL or the Company ) has adopted Fair Practices Code ( the Code ) to provide transparency in its transactions with the customers, present as well as prospective. MHIL, through the Code, intends to extend protection to its customers by explaining how the Company and its representatives are expected to deal with them during the day to day operations. The Code has been prepared based on the Guidelines issued by the National Housing Bank on Fair Practices Code 1. OBJECTIVES OF THE CODE The Code has been developed to: 1. Promote good and fair practices by setting minimum standards in dealing with borrowers; 2. Oncrease transparency so that the borrower can have a better understanding of what he/she can reasonably expect of the services; 3. Encourage market forces, through competition, to achieve higher operating standards; 4. Promote a fair and cordial relationship between borrower and MHIL; and 5. Foster confidence in the housing finance system. 2. APPLICATION OF THE CODE All parts of this Code apply to all the products and services, whether they are provided by MHIL or subsidiaries across the counter, over the phone, by post, through interactive electronic devices, on the internet or by any other method. 3. TO ACT FAIRLY AND REASONABLY IN ALL DEALINGS WITH BORROWERS, BY ENSURING THAT: 1. We meet the commitments and standards in this Code for the products and services we offer and in the procedures and practices our staff follows. 2. Our products and services meet relevant laws and regulations in letter and spirit. 3. Our dealings with borrowers rest on ethical principles of integrity and transparency. MUTHOOT HOMEFIN (INDIA) LIMITED 27

28 4. ADVERTISING, MARKETING AND SALES: 1. We shall ensure that all advertising and promotional material is clear, and not misleading. 2. Where a reference to an interest rate is made, we shall also indicate whether other fees and charges will apply and that full details of the relevant terms and conditions are available on request. 3. We shall provide information on interest rates, common fees and charges through putting up notices in our branches; through telephone or helplines; on the company s website; through designated staff / help desk; or providing service guide / tariff schedule. 4. If we avail of the services of third parties for providing support services, we shall require that such third parties handle borrower s personal information (if any available to such third parties) with the same degree of confidentiality and security as MHIL would. 5. We may, from time to time, communicate to borrowers various features of their products availed by them. Information about their other products or promotional offers in respect of products / services, may be conveyed to borrowers only if he / she has given his / her consent to receive such information / service either by mail or by registering for the same on the website or on borrower service number. 6. We shall prescribe a code of conduct for our Direct Selling Agencies (DSAs) whose services are availed to market products / services which amongst other matters require them to identify themselves when they approach the borrower for selling products personally or through phone. 7. In the event of receipt of any complaint from the borrower that MHIL's representative / courier or DSA has engaged in any improper conduct or acted in violation of this Code, appropriate steps shall be initiated to investigate and to handle the complaint and to make good the loss. 5. LOANS i. Applications for loans and their processing 1. At the time of sourcing a Loan product, we will provide information about the interest rates applicable, as also the fees/charges, if any, payable for processing, prepayment options and charges, if any, and any other matter which effects the interest of the borrower, so that a meaningful comparison with the terms and conditions offered by other HFCs can be made and informed decision can be taken by the borrower. 2. We shall follow a system of giving Acknowledgment for receipt of all loan applications. Preferably, the time frame within which loan applications will be MUTHOOT HOMEFIN (INDIA) LIMITED 28

29 disposed of would also be indicated in the Acknowledgment, keeping in mind the level of Authority to which the Loan Proposal would be forwarded for final decision. ii. Loan appraisal and terms/conditions 1. Normally all particulars required for processing the loan application shall be collected by MHIL at the time of application. In case we need any additional information, the borrower would be told that he would be contacted immediately again. 2. MHIL shall convey in writing to the borrower the Loan Sanction along with the terms and conditions thereof. 3. MHIL shall furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to every borrower at the time of sanction / disbursement of loans. iii. Communication of rejection of Loan Application MHIL shall communicate in writing the reason(s) for rejection of the loan application. iv. Disbursement of loans including changes in terms and conditions 1. Disbursement shall be made in accordance with the disbursement schedule given in the Loan Agreement/ Sanction Letter. 2. We shall give notice to the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges, other applicable fee/ charges etc. We shall also ensure that changes in interest rates and charges are effected only prospectively. A suitable condition in this regard shall be incorporated in the loan agreement. 3. If such change is to the disadvantage of the borrower, he/she may within 60 days and without notice close his / her account or switch it without having to pay any extra charges or interest. 4. Before taking a decision to recall / accelerate payment or performance under the agreement or seeking additional securities, we shall give notice to the borrower in consonance with the loan agreement. 5. We shall release all securities on repayment of all dues or on realization of the outstanding amount of loan subject to any legitimate right or lien for any other claim we may have against borrower. If 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 we are entitled to retain the securities till the relevant claim is settled /paid. MUTHOOT HOMEFIN (INDIA) LIMITED 29

30 6. GUARANTORS When a person is considering to be a guarantor to a loan, he/she will be informed about 1. his/her liability as guarantor; 2. the amount of liability he/she will be committing him/herself to the company; 3. circumstances in which we will call on him/her to pay up his/her liability; 4. whether we have recourse to his/her other monies in the company if he/she fail to pay up as a guarantor; 5. whether his/her liabilities as a guarantor are limited to a specific quantum or are they unlimited; and 6. time and circumstances in which his/her liabilities as a guarantor will be discharged as also the manner in which we will notify him/her about this We shall keep him/her informed of any material adverse change/s in the financial position of the borrower to whom he/she stands as a guarantor. 7. PRIVACY AND CONFIDENTIALITY All personal information of borrowers shall be treated as private and confidential [even when the borrowers are no longer borrowers], and shall be guided by the following principles and policies. We shall not reveal information or data relating to borrower accounts, whether provided by the borrowers or otherwise, to anyone, including other companies, entities in their group, other than in the following exceptional cases: 1. If the information is to be given by law 2. If there is a duty towards the public to reveal the information 3. If our interests require them to give the information (for example, to prevent fraud) but it should not be used as a reason for giving information about borrower or borrower accounts [including borrower name and address] to anyone else, including other companies in the group, for marketing purposes 4. If the borrower asks us to reveal the information, or with the borrower s permission 5. If we are asked to give a reference about borrowers, we shall obtain his / her written permission before giving it. 6. The borrower shall be informed the extent of his / her rights under the existing legal framework for accessing the personal records that we hold about him /her. 7. We shall not use borrower s personal information for marketing purposes by anyone including us unless the borrower specifically authorizes them to do so. MUTHOOT HOMEFIN (INDIA) LIMITED 30

31 8. CREDIT REFERENCE AGENCIES 1. When a borrower opens an account, we shall inform him / her when they may pass his / her account details to credit reference agencies and the checks we may make with them. 2. We may give information to credit reference agencies about the personal debts the borrower owes them if: i. The borrower has fallen behind with his / her payments; ii. iii. The amount owed is not in dispute; and The borrower has not made proposals that we are satisfied with, for repaying his / her debt, following our formal demand 3. In these cases, we shall intimate the borrower in writing that we plan to give information about the debts the borrower owes them to credit reference agencies. At the same time, we shall explain to the borrower the role of credit reference agencies and the effect the information they provide can have on borrower s ability to get credit. 4. We may give credit reference agencies other information about the borrower s account if the borrower has given them his / her permission to do so. 5. A copy of the information given to the credit reference agencies shall be provided by us to a borrower, if so demanded. 9. COLLECTION OF DUES: 9.1 Whenever loans are given, we shall explain to the borrower the repayment process by way of amount, tenure and periodicity of repayment. However, if the borrower does not adhere to repayment schedule, a defined process in accordance with the laws of the land shall be followed for recovery of dues. The process will involve reminding the borrower by sending him / her notice or by making personal visits and / or repossession of security if any. 9.2 Our collection policy should be built on courtesy, fair treatment and persuasion. We believe in fostering borrower confidence and longterm relationship. Our staff or any person authorized to represent us in collection of dues or / and security repossession shall identify himself / herself and display the authority letter issued by us and upon request, display his / her identity card issued by us or under authority of the company. We shall provide borrowers with all the information regarding dues and shall endeavor to give sufficient notice for payment of dues. 9.3 All the members of the staff or any person authorised to represent us in collection or / and security repossession should follow the guidelines set out below: MUTHOOT HOMEFIN (INDIA) LIMITED 31

32 1. Borrower would be contacted ordinarily at the place of his / her choice and in the absence of any specified place at the place of his / her residence and if unavailable at his / her residence, at the place of business / occupation. 2. Identity and authority to represent MHIL shall be made known to the borrower at the first instance. 3. Borrower s privacy would be respected. 4. Interaction with the borrower shall be in a civil manner 5. Our representatives shall contact the borrowers between 0700 hrs and 1900 hrs, unless the special circumstances of the borrower s business or occupation require otherwise. 6. Borrower s request to avoid calls at a particular time or at a particular place shall be honoured as far as possible. 7. Time and number of calls and contents of conversation would be documented. 8. All assistance would be given to resolve disputes or differences regarding dues in a mutually acceptable and in an orderly manner. 9. During visits to borrower s place for dues collection, decency and decorum should be maintained. Inappropriate occasions such as bereavement in the family or such other calamitous occasions should be avoided for making calls/visits to collect dues. 10. COMPLAINTS AND GRIEVANCES: Internal Procedures 1. We shall have a system and a procedure for receiving, registering and disposing of complaints and grievances in each of our offices. 2. The Board of Directors of MHIL shall lay down the appropriate grievance redressal mechanism within the organization to resolve complaints and grievances. Such a mechanism shall 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. 3. Borrower would be told where to find details of MHIL's procedure for handling complaints fairly and quickly. 4. If the borrower wants to make a complaint, he/she shall be told: I. How to do this II. Where a complaint can be made III. How a complaint should be made IV. When to expect a reply V. Whom to approach for redressal VI. What to do if the borrower is not happy about the outcome. MUTHOOT HOMEFIN (INDIA) LIMITED 32

33 VII. MHIL's staff shall help the borrower with any questions the borrower has. 5. If a complaint has been received in writing from a borrower, we shall endeavor to send him/her an acknowledgment / response within a week. The acknowledgment shall contain the name & designation of the official who will deal with the grievance. If the complaint is relayed over phone at our designated telephone help desk or borrower service number, the borrower shall be provided with a complaint reference number and be kept informed of the progress within a reasonable period of time. 6. After examining the matter, we shall send the borrower its final response or explain why it needs more time to respond and shall endeavor to do so within six weeks of receipt of a complaint and he/she shall be informed how to take his/her complaint further if he/she is still not satisfied. 7. We shall publicize its grievance redressal procedure and ensure that it is specifically made available on its website. 11. GENERAL We shall give the borrower information: 1. Verify the details mentioned by him/her in the loan application by contacting him/her at his/her residence and / or on business telephone numbers and / or physically visiting his/her residence and/or business addresses through agencies appointed for this purpose, if deemed necessary by us. 2. The borrower shall be informed to cooperate if we need to investigate a transaction on the borrower s account and with the police/ other investigative agencies, if we need to involve them. 3. We shall advise the borrower that if the borrower acts fraudulently, he/she will be responsible for all losses on his/her account and that if the borrower acts without reasonable care and this causes losses, the borrower may be responsible for the same. 4. About our products and services in any one or more of the following languages: Hindi, English or the appropriate local language. 5. We shall not discriminate on grounds of sex, caste and religion in the matter of lending. However, this does not preclude us from instituting or participating in schemes framed for different sections of the society. 6. We shall process requests for transfer of a loan account, either from the borrower or from a bank/financial institution, in the normal course. 7. To publicize the code we shall: 1. provide existing and new borrowers with a copy of the Code, if requested 2. make this Code available on request either over the counter or by electronic communication or mail; MUTHOOT HOMEFIN (INDIA) LIMITED 33

34 3. make available this Code at every branch and on their website; and 4. ensure that our staff are trained to provide relevant information about the Code and to put the Code into practice. 8. The Code will be reviewed at yearly intervals or as and when felt necessary by the Board of Directors of MHIL ************* MUTHOOT HOMEFIN (INDIA) LIMITED 34

35 MUTHOOT HOMEFIN (INDIA) LIMITED 35

36 Feel free to contact us: Write to us at: Muthoot Homefin (India) Limited Muthoot Chambers, Kurian Tower, Banerji Road, Ernakulam, Kerala Call us at: Landline: /3/4/5/6 Mobile: , Contact us online: Website: Follow us on Social Media: /MuthootHomefinIndiaLimited /Muthoot Homefin /MuthootHomefin /muthoothomefin MUTHOOT HOMEFIN (INDIA) LIMITED 36