Kinara Capital is a pioneering Fintech NBFC providing fast and flexible collateral free loans to small business entrepreneurs, thus driving Financial Inclusion of the underserved MSME sector in India. Kinara Capital provides loans in the range of INR 1-30 lakhs for Working Capital and Asset Purchase needs. Kinara Capital is addressing the missing link between microfinance and commercial capital in the MSME sector. The funds for such loans are borrowed from banks and other financial institutions for on-lending to potential borrowers.
Introduction Pursuant to Reserve Bank of India (RBI)‘s Master Circular DNBR (PD) CC.No.054/03.10.119/2015-16 on fair practice code of 01 July 2015, issued to Non-Banking Financial Companies (NBFCs), the Board of Directors have adopted a Fair Practices Code for Visage Holdings and Finance Private Limited (“Company”).
The Reserve Bank vide its circular dated September 28, 2006, issued guidelines on Fair Practices Code (FPC) for all NBFCs to be adopted by them while doing lending business. The guidelines, inter alia, covered general principles on adequate disclosures on the terms and conditions of a loan and also adopting a non-coercive recovery method. The same was revised in view of the recent developments and the rapid growth in NBFCs.
The main business of Visage Holdings and Finance Private Limited (‘the company’) is extending loans to individuals / small business entrepreneurs for setting up their businesses or to improve their existing businesses. The objective of the code is primarily to ensure fair and transparent transactions with all our customers. This will also facilitate the customers to have a better understanding about the products and the various charges levied by the Company.
The below mentioned Fair Practices Code shall be followed by the Company. The main objectives of the code are:
The Fair Practices Code, as adopted herein below, is in conformity with the Guidelines on Fair Practices Code for NBFCs as contained in the aforementioned RBI Circular.
The Company’s business will be conducted in accordance with prevailing statutory and regulatory requirements, with due focus on efficiency, customer orientation and corporate governance principles. In addition, the Company will adhere to the Fair Practices Code in its functioning.
The key elements are as follows:
a) Applications for Loans and their Processing
b) Loan Appraisal and Terms/Conditions
The Company shall convey in writing to the borrower in the vernacular language or a language understood by the borrower, by means of approval letter or otherwise, the amount of loan approved along with the terms and conditions, including the annualized rate of interest and method of application thereof. Additionally, any penal interest to be charged will be clearly highlighted in writing to the borrower. The Company will keep the acceptance of all these terms and conditions by the borrower in the Company’s files.
c) Disbursement of Loans including Changes in Terms and Conditions
The Company shall give notice to all its borrowers in the vernacular language or a language understood by the borrower of any change in the terms and conditions – including disbursement schedule, interest rates, service charges, prepayment charges etc. The Company shall also ensure that changes in interest rates and charges are affected only prospectively. A suitable provision in this regard shall be incorporated in the loan agreement.
Decision to recall / accelerate payment or performance under the agreement shall also be in consonance with the loan agreement.
The Company shall release all securities on repayment of its full dues or on realization of the outstanding amount of loan subject to any legitimate right or lien for any other claim, the Company may have against its borrowers. 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 the Company is entitledto retain the securities till the relevant claim is settled/paid.
e) Responsibility of Board of Directors
The Board of Directors of Company should also lay down the appropriate grievance redressal mechanism within the organization. Such a mechanism should ensure that all disputes arising out of the decisions of company’s functionaries are heard and disposed of at least at the next higher level. The Board of Directors shall 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 shall be submitted to the Board at regular intervals, as may be prescribed by it.
f) Grievance Redressal Officer
The Company shall display at their branches / places where business is transacted:
g) Language and mode of communicating Fair Practice Code
Fair Practices Code shall be (which should preferably in the vernacular language or a language as understood by the borrower) based on the guidelines outlined hereinabove should be put in place by all NBFCs with the approval of their Boards within one month from the date of issue of this circular. NBFCs will have the freedom of drafting the Fair Practices Code, enhancing the scope of the guidelines but in no way sacrificing the spirit underlying the above guidelines. The same should be put up on their website, if any, for the information of various stakeholders.
h) Wide Dissemination and Periodic Review
The Company shall put the above Fair Practices Code outlined hereinabove on its website, for the information of various stakeholders.
The Company will also review and refine the Code, as may be required periodically based on its own experience and fresh guidelines, if, any, to be issued by the RBI in this regard.
i) Complaints about excessive interest charged by the Company
The Company shall lay out appropriate internal principles and procedures in determining interest rates and processing and other charges if any, and also to ensure that they are not excessive even though the interest rates and other charges are not regulated by Reserve Bank.
j) Regulation of excessive interest charged by the Company
The Company shall adopt an interest rate model considering 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, viz. the financial strength, business, regulatory environment affecting the business, competition, past history of the borrower, etc. 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.
The rates of interest and the approach for gradation of risks shall also be made available on the website of the company or published in the relevant newspapers. The information published in the website or otherwise published shall be updated whenever there is a change in the rates of interest.
The rate of interest should be annualized rates so that the borrower is aware of the exact rates that would be charged to the account.
k) Clarification regarding repossession of hypothecated assets financed by the Company
The Company shall have a built-in re-possession clause in the contract/loan agreement with the borrower which must be legally enforceable. The Company shall ensure that the entire process of enforcing its security, valuation and realization thereof be fair and transparent. The Company shall also ensure that the staff is adequately trained to deal with the customers in an appropriate manner.
To ensure transparency, the terms and conditions of the contract/loan agreement should also contain provisions regarding:
A copy of such terms and conditions shall be made available to the borrowers in terms of circular wherein it was stated that the Company may invariably furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction / disbursement of loans, which may form a key component of such contracts/loan agreements.
l) Customer Complaints & Grievances
Kinara Capital has a robust Grievance Redressal Mechanism. In order to effectively address customer grievances, Kinara Capital has introduced multiple channels of communication as described below. A customer can raise a complaint or express their dissatisfaction of the company service by any method listed below:
Registered Office Address:
The Customer Care Officer,
No. 50, Second Floor, 100 Feet Road, HAL 2nd Stage (Defence Colony),
Indiranagar, Bengaluru, Karnataka 560038
After waiting for a reasonable time, if the customer feels that his issue is still not addressed or resolved to his satisfaction he / she may escalate the issue as per the company escalation Matrix.
|Level||Name of the Officer||Contact Details||Designation|
|Level 1||Narendra Laxman Pakhare||Phone No: 6364464958, Email: firstname.lastname@example.org||Manager - Customer Care|
|Level 2||Riji K||Phone No: 6364464953, Email :email@example.com||Head - Customer Care|
|Level 3||Mohan K Pattabhiraman||Phone No: 6364464957, Email: firstname.lastname@example.org||Head IQA, Principal Nodal Officer|
|Level 4||Thirunavukkarasu R||Phone No: 6364464955, Email: email@example.com||Chief Operating Officer & Director of the Board|
5th Level Escalation: In rarest of the scenarios where the customer is not happy with the response provided by the 4th level escalation, and if the issue is not resolved within 1 month of submission, the customer can write to the NBFC Ombudsman, details as provided below:
|Sl. No.||Centre||Address of the Office of NBFC Ombudsman||Area of Operation|
|1||Chennai||C/o Reserve Bank of India, Fort Glacis, Chennai 600 001, STD Code: 044, Telephone No: 25395964, Fax No: 25395488, Email: firstname.lastname@example.org||Tamil Nadu, Andaman and Nicobar Islands, Karnataka, Andhra Pradesh, Telangana, Kerala, Union Territory of Lakshadweep and Union Territory of Puducherry|
|2||Mumbai||C/o Reserve Bank of India, RBI Byculla Office Building, Opp. Mumbai Central Railway Station, Byculla, Mumbai - 400008, STD Code: 022, Telephone No :2300 1280, Fax No: 23022024, Email: email@example.com||Maharashtra, Goa, Gujarat, Madhya Pradesh, Chhattisgarh, Union Territories of Dadra and Nagar Haveli, Daman and Diu|