Guidelines on Fair Practices Code
■ Applications for loans and their processing

• Loan application forms in respect of priority sector advances up to Rs.2.00 lakhs as per prescribed format (Annexure) shall be obtained.
• Loan application should include information about the fees/charges, if any, payable for processing, the amount of such fees refundable in the case of non acceptance of application, pre-payment options and any other matter which affects the interest of the borrower, so that a meaningful comparison with that of other banks can be made and informed decision can be taken by the borrower.
• Bank should verify the loan applications within a reasonable period of time maximum of 30 days from receipt of the complete information. If additional details/documents are required, they should intimate the borrowers immediately.
• In the case of rejection or non acceptance of the credit applications form all borrowers Bank will convey in writing, the main reason/reasons which, in the opinion of the bank after due consideration, have led to rejection of the loan applications within stipulated time.

• Bank should ensure that there is proper assessment of credit application by borrowers. Margin and security stipulation as a substitute for due diligence on credit worthiness of the borrower will not be used.
• The Bank should convey to the borrower the credit limit along with the terms and conditions thereof and keep the borrower's acceptance of these terms and conditions given with his full knowledge on record.
• Terms and conditions and other caveats governing credit facilities should be arrived at after negotiation by the Bank and the borrower. These terms of sanction should be in writing and duly certified by the authorised official. A copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement should be furnished to the borrower.
• As far as possible, the loan agreement should clearly stipulate credit facilities that are solely at the discretion of lenders. These may include approval or disallowance of facilities, such as, drawings beyond the sanctioned limits, honoring cheques issued for the purpose other than specifically agreed to in the credit sanction, and disallowing drawing on a borrowal account on its classification as a non-performing asset or on account of non-compliance with the terms of sanction. It may also be specifically stated that the lender does not have an obligation to meet further requirements of the borrowers on account of growth in business etc. without proper review of credit limits.
• In the case of lending under consortium arrangement, the participating lenders should evolve procedures to complete appraisal of proposals in the time bound manner to the extent feasible, and communicate their decisions on financing or otherwise within a reasonable time.

• Bank will ensure timely disbursement of loans sanctioned in conformity with the terms and conditions governing such sanction. Bank will give notice of any change in the terms and conditions including interest rates, service charges etc. It will be ensured that changes in interest rates and charges are effected only prospectively.

• Post disbursement supervision by the Bank, particularly in respect of loans upto Rs.2 lakhs, should be constructive with a view to taking care of any "lender-related" genuine difficulty that the borrower may face.
• Before taking a decision to recall/accelerate payment or performance under the agreement or seeking additional securities, lenders should give notice to borrowers, as specified in the loan agreement or a reasonable period, if no such condition exits in the loan agreement.
• Bank will release all securities on receiving payment of loan or realisation of loan subject to any legitimate right or lien for any other claim lenders 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 lenders are entitled to retain the securities till the relevant claim is settled/paid.

• Bank should 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 lender).
• Bank must not discriminate on grounds of sex, caste and religion in the matter of lending. However, this does not preclude lenders from participating in credit-linked schemes framed for weaker sections of the society.
• In the matter of recovery of loans, the Bank should not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc.
• In case of receipt of request for transfer of borrowal account, either from the borrower or from a bank/financial institution, which proposes to take- over the account, the consent or otherwise i.e, objection of the lender, if any, should be conveyed within 21 days from the date of receipt of request.

In case there is written request of the client for credit facilities, Bank is required to acknowledge the receipt of the same. The details/clarifications to be called for will be initiated by the Bank within seven days. Bank shall duly acknowledge the receipt of the information and should intimate the clients the time period within which the decision shall be conveyed.

In case the bank is collecting processing fee before the processing of the loan application, Bank shall acknowledge the same and will indicate that in case of non-approval of the facilities and any other matter, which affect the interest of the borrower, entire amount will be refunded.
The reasons of rejections shall also be intimated to the applicants.

In case of approval of the facilities, terms and conditions shall be arrived at with negotiation with the applicants and shall be reduced in writing as part of the sanction letter. The specific terms like rate of interest, periodicity, compounding at specific intervals and penal interest etc. shall be duly intimated in the sanction letter and the same is required to be accepted by the clients as part of the documentation.

Any disputes arising due to referred indicators shall be referred to GM of the branch who shall be the authority to decide the case.