1.1 Objectives of the Code :
- To promote good and Fair Practices by setting minimum standards in dealing with customers
- To provide full information/knowledge to customers regarding the products and services offered by MHFSL so as to enable them to take informed decision.
- To increase transparency, so that, customers can have better understanding of what they can reasonably expect of the services
- To encourage market forces through competition, in order to achieve higher operating standards
- To promote a fair and cordial relationship between the customer and MHFSL
- To foster confidence in MHFSL in particular and the housing finance system in India in general.
1.2 Application of the Code:
This Code will apply to all products and services offered by MHFSL at all its branches, regardless of whether they are provided across the counter, over phone, by post, through interactive electronic devices on the internet or in any other manner.
2.1 MHFSL will act fairly, reasonably and in a transparent manner while dealing with its customers by adhering to the following:-
- MHFSL will meet the commitments and standard in this Code in respect of the products and services offered by it and also in the procedures and practices that are followed by the staff members.
- The products and services offered by MHFSL will conform to relevant laws and regulations in letter and spirit
- The dealings of MHFSL with customers would rest on ethical principles of integrity and transparency.
2.2 MHFSL shall disclose to the borrower all information about the following:-
- Fees/charges payable for processing the loan application
- The amount of fees refundable if the loan amount is not sanctioned/disbursed
- Pre-payment options and charges if any
- Penalty for delayed repayment if any
- Conversion charges for switching the loan from fixed to floating rate or vice-versa
- Existence of any interest re-set clause
- Any other matter which affects the interest of the borrower
MHFSL will disclose “all in cost” inclusive of all charges involved in processing/sanction of loan application in a transparent manner and ensure that such charges/fees are non- discriminatory.
3.1 MFHSL shall
- Ensure that all advertising and promotional material is clear and not misleading.
- In any advertising in any media and promotional literature that draws attention to a service or product and includes a reference to interest rate. MHFSL shall also indicate whether other fees and charges will apply and that full details of the relevant terms and conditions will be made available on request
- MHFSL will provide information on interest rates common fees and charges through display of notices on the notice boards at the branches
- In case MHFSL avails the services of third parties for providing support services it will require such third parties to handle customers’ personal information (if any available to such third parties) with the same degree of confidentiality and security as MHFSL would.
- MHFSL may from time to time, communicate to the customers various features of its products availed by them. Information about other products of MHFSL or promotional offers in respect of products/services will be conveyed to a customer only if he/she has given consent to receive such information/service either by mail or by registering the same on the website or on customer service number.
- MHFSL shall prescribe a code of conduct for its Direct Selling Agents (DSAs) whose services are availed to market products/services which amongst other matters require them to identify themselves when they approach the customer for selling products personally or through phone.
- In the event of receipt of any complaint from the customer that MHFSL’s representative/courier or DSA has engaged in any improper conduct or acted in violation of the code appropriate steps shall be initiated to investigate and to handle the complaint and to make good the loss.
- MHFSL shall provide information about the products and services offered by it in any one or more of the following languages – Hindi, English and relevant regional language.
- MHFSL will ensure that customers are given information regarding the benefits accruing to them the manner of availing the benefits, their financial implications and whom they can contact for addressing their queries and the manner of addressing the queries.
3.2 To help customers to use the products and services MHFSL shall:-
- Provide them regular and appropriate up-dates in the notice board at branches or in the website
- Keep them informed about changes in the interest rate, charges or terms and conditions by means of display of notice in the notice board at branches.
3.3 MHFSL will quickly and sympathetically deal with things that go wrong by:-
- Rectifying the mistakes promptly and reversing charges applied due to mistakes, promptly.
- Attending to complaints of customers promptly
- Giving suitable advice to customers regarding manner of taking their complaints forward if they are not satisfied with the handling of the complaint
- Providing suitable alternative avenues to alleviate problems arising out of technological failures.
3.4 Treatment of Personal Information:-
MHFSL shall treat all personal information relating to customers as private and confidential, subject to what is stated in paragraph No.5 elsewhere.
3.5 To publicise the Code of MHFSL – MHFSL shall:-
- Provide new customer with a copy of the Code and old and existing customers who were provided copy of the code in the past will be given copy of the code on request
- Make this code available on request, either over the counter or by electronic communication or mail
- Make available this code at every branch of the MHFSL and
- Ensure that the staff of MHFSL are trained to provide relevant information about the code and to put the code into practice.
3.6 To adopt and practice a non-discrimination policy.
MHFSL shall not discriminate on the basis of age, race, caste, gender, marital status, religion or disability of customers.
4.1 MHFSL shall provide information on interest rates, processing and administrative fees, other charges, etc through any one of the following:-
- Through notices on the notice boards in their branches
- Through telephone or help lines.
- Through designated staff/help desk; or
- Through providing service guide/tariff schedule
- Through providing information at the personal level, during the visit of customers.
4.2 In respect of prospective customers, MHFSL shall:-
- Provide clear information explaining the key features of its services and products
- Provide information on any type of product and service offered that may suit the needs of the customer
- Inform the customers about the various means through which, product and services are offered
- Inform the customers the details required by them for the purpose of identity and address for complying with legal, regulatory and internal policy requirements.
4.3 To the existing customers, MHFSL shall:-
- Provide more information on the key features of the products including application of interest rates, fees and charges on request
- Provide extra information on their rights and responsibilities, especially regarding availment of nomination facility offered in respect of deposit accounts
- Automatically register the customer’s name under `do not call’ service. MHFSL shall not inform/explain through telephone calls, SMS, EMAILs, any new product/service unless and until the party himself/herself informs MHFSL in writing his/her consent to avail of this information/service.
4.4 Interest Rates:
MHFSL shall give information to the customers regarding the following as and when customers seek the said information:-
- Interest rates which apply to their accounts, both deposits and loans
- When interest is paid on their deposits/charged on their loan accounts
- How interest is applied to their accounts and method of calculation of interest.
4.5 Changes in interest rates:
MHFSL shall inform their customers as and when changes in interest rates take place, in respect of their deposit schemes and loan products. This information will be given by displaying a notice on the notice board at branches or through verbal information to customers, during their visits or over phone.
4.6 Fees and Charges:
MHFSL shall display in its branches –
- A notice about the tariff schedule – customers can be advised to see this schedule
- Details of services which are offered, free of charge
- MHFSL shall give their customers all details regarding their tariff schedule and also regarding charges applicable to the products and services chosen by them
- MHFSL shall provide customers information about the penalties liable to be levied in case of non-observance/violation of any of the terms and conditions, covering the product/services chosen by them.
4.7 Changes in fees and charges:
In case MHFSL increases any of these charges or introduces a new charge, it will be notified one month prior to the revised charges being levied/becoming effective. This notification will be issued through suitable notice, on the notice board, at all the branches.
4.8 Terms and conditions:-
- Customers availing the product/service for the first time, shall be advised the relevant terms and conditions for the service
- All terms and conditions shall be fair and will set out, respective rights especially with regard to nomination facility, liabilities & obligations clearly and as far as possible, in plain and simple language.
4.9 Changes in terms and conditions:-
Customers shall be informed regarding changes in the terms and conditions through any of the following channels:-
- Personal intimation
- Notices on the branch Notice Board
- Over Phone
- Newspaper advertisement or press release
- Internet/EMAIL and Website
- MHFSL will normally make changes with prospective effect giving due notice on the notice board.
- In case any change is made without notice, the same shall be notified within 30 days. If such change is to the dis-advantage of the customers, he/she may, within 60 days and without notice, close his/her account or switch it over without having to pay any extra charges or interest.
- Major change or a lot of changes in any one, shall be informed to the customers on request and provide a copy of the new terms and conditions or a summary of the charges.
5.1 All personal information of customers shall be treated as private and confidential, even after they cease to be customers and shall be guided by following principles and policies. MHFSL shall not reveal any information or data relating to customers accounts whether provided by the customer or otherwise, to any one, including other companies, entities in their group, other than in the following exceptional cases.
- If the information is to be given as per law.
- If there is a duty towards the public to reveal the information.
- If the interests of MHFSL require them to give information – e.g: to prevent a fraud. But, MHFSL shall not use the same for giving information about the customer/customer account to any one else, including other companies in the group or for marketing purposes.
- If the customers ask MHFSL to reveal information or with the customers’ permission, then only, the information will be revealed.
- If MHFSL is asked to give reference about the customers, MHFSL will obtain customers written permission, before giving the information.
- The customer shall be informed the extent of his/her rights under the existing legal frame-work for accessing the personal records that MHFSL maintains about him/her.
- MHFSL shall not use customers’ personal information for marketing purposes of anyone, including its own marketing staff, unless the customer specifically authorises the MHFSL to do so.
5.2 Credit Reference Agencies:-
- When a customer opens an account, MHFSL shall inform him/her when they may pass his/her account, details to credit reference agencies and the checks MHFSL may make with them.
MHFSL may give information to credit reference agencies about the personal debts the customer owes them, if:-
- The customer has fallen behind with his repayments
- The amount owed is not in dispute and
- The customer has not made proposals that the MHFSL is satisfied with, for repaying his/her debt, following MHFSL’s formal demand
- In these cases, MHFSL shall intimate the customers in writing that they plan to give information about the debts the customer owes them, to the credit reference agencies. At the same time, MHFSL shall explain to the customers the role of credit reference agencies and the effect the information they provide, can have on customers’ ability to get credit.
- MHFSL may give credit reference agencies other information about the customer’s account, if the customer has given his/her permission to do so.
- A copy of the information given to credit reference agencies shall be provided by the HFCs to a customer, if so demanded.
6.1 While giving loans, MHFSL shall explain to the customers the repayment process by way of amount, tenure and periodicity of payment. This will be made clear in the loan offer letter. However, if the customer does not adhere to the repayment programme, a defined process, in accordance with the laws of the land, shall be followed for recovery of dues. The process will involve – reminding the customer by phone, by sending him/her notice or by making personal visits and any other steps, including re-possession of security, if any. If the recovery action is in terms of the provisions of SARFAESI Act, then the procedure as prescribed in the SARFAESI Act/rules there under, shall be followed.
6.2 MHFSL’s collection policy shall be built on courtesy, fair treatment and persuasion. MHFSL believes in fostering customer confidence and long term relationship. Staff of MHFSL or any person, authorised to represent MHFSL in collection of dues and security re-possession, shall identify himself/herself and display the authority letter issued by MHFSL and upon request, display his identify card issued by the MHFSL or under authority of the company. MHFSL shall provide customers with all the information regarding dues and shall endeavour to give sufficient notice for payment of dues.
6.3 All the members of staff of MHFSL or any person authorised by the company to represent it, in the collection or security re-possession, shall follow the guidelines given below:-
- Customer should be contacted ordinarily at the place of his choice and in the absence of any specified place, at the place of his residence and if un-available at the residence, at the place of his business/occupation.
- Identity and authority to represent MHFSL should be made known to the customer at the first instance.
- Customers’ privacy should be respected
- Interaction with the customers shall be in a very civil manner.
- MHFSL’s representatives shall contact the customer between 7AM and 7PM on any day, unless special circumstances of the customer’s business or occupation require otherwise.
- Customers’ request to avoid calls at a particular place and at a particular time, shall be honoured, as far as possible
- Time and number of calls and contents of conversation should be documented
- All assistance should be given to resolve disputes or differences regarding dues in a mutually acceptable and in an orderly manner
- During visits to customers’ place for collection of dues, decency and decorum should be maintained.
- Improper occasions, such as bereavement in the family, ill-health or such other calamitous occasions should be avoided for making calls/visits to collect the dues.
7.1 Internal Procedures:-
MHFSL shall have a system and procedure for receiving registration and disposing of complaints and grievances in each of its offices.
- MHFSL has put in place a grievance redressal mechanism to resolve complaints and redress the grievances. All disputes arising out of decisions of different functionaries will be heard and disposed of at the next higher level. The grievance redressal mechanism will be subject to review by the Board from time to time.
- Customer should be told where to find details of MHFSL’s procedure for handling complaints fairly and quickly.
If the customer wants to make a complaint he/she should be told :-
- how to do this
- where a complaint can be made
- how a complaint should be made
- when a reply can be expected
- Whom to approach for redressal
- What to do if the customer is not satisfied about the reply/outcome
- The staff of MHFSL shall help the customer regarding any questions the customer has
- After examining the matter, MHFSL shall send the customer its final reply or explain why it needs more time to respond and shall endeavour to do so, within 6 weeks of receipt of a complaint and the customer should be informed how to take his complaint further, in case he is not satisfied by the reply.
- MHFSL’s grievances redressal procedure is made available in its website.
8.1 Information Regarding Deposit Schemes, Rates of interest etc:-
- When a customer opens a deposit account, MHFSL shall inform the rate of interest on his fixed/recurring deposit accounts, how interest is calculated and its periodicity. For deposit accounts like, recurring deposit account, the customer should be informed about the charges, which will be levied in case of delayed payment of periodical instalments in the account by the customer. Details of the charges should be included in the tariff schedule
- MHFSL shall inform different types of accounts that can be opened, such as fixed deposits, GLCC, etc. MHFSL will also explain the implications of opening the accounts in various styles, such as, single, joint name, joint with either or survivor clause, joint with former or survivor clause or in any other style or with nomination facilities, at the time of opening of the account.
8.2 Premature withdrawal of deposits:-
- The procedure pertaining to premature withdrawal of term deposits/GLCC shall be informed to the depositor, disclosing the interest rate applicable, policy for premature withdrawal of deposits, etc.
- Brokerage paid to the broker for mobilising the deposits, should not be recovered from the borrower, if the borrower decides to pre-close his/her deposit account with our company, for whatever reason.
8.3 Renewal of overdue term deposits:
MHFSL shall inform the customers the interest rate applicable in case they renew the deposits after the date of maturity.
8.4 Loans against deposits (LDs):
MHFSL shall clearly explain the facility of loan against deposits available, if any.
8.5 Accounts of Minors:
MHFSL shall inform customers, on enquiry, how a deposit account can be opened in the name of a minor.
8.6 Special Accounts:
MHFSL shall endeavour to make it easy and convenient for special customers, like senior citizens, physically challenged persons and illiterate persons to deal with them. MHFSL will formulate convenient policies, products and services for such applicants and customers. MHFSL will also inform the procedure for opening of the account and other terms and conditions to blind and physically challenged persons provided, he/she calls on its branch personally, along with a witness, who is known both to such person and branch of the MHFSL.
8.7 Settlement of claim in respect of deceased account holders:
Accounts with survivor /nominee clause: In case of deposit account of a deceased depositor, where the depositor had utilised the nomination facility and made a valid nomination or where the account was opened with the survivorship clause (either or survivor or anyone or survivor or former or survivor or latter or survivor) the payment of the balance in the deposit account to the survivor/nominee of the deceased account holder shall be made, provided:-
- The identity of the survivor/nominee and the fact of the death of the account holder is established through appropriate documentary evidence
- There is no order from a competent court/other statutory authority, restraining MHFSL from making the payment from the account of the deceased; and
- It has been made clear to the survivor/nominee that he/she would be receiving the payment from MHFSL as a `Trustee’ of the legal heirs of the deceased i.e. said payment to him/her shall not affect the right or claim which any person may have, against the survivor/nominee to whom the payment is made.
- The payment made to the survivor/nominee subject to the above conditions would constitute a full discharge of MHFSL’s liability. In such case, payment to survivor/nominee of the deceased depositors, will be made without insisting on production of succession certificate or letter of administration or probate or obtaining any bond of indemnity or surety from the survivors/nominee, irrespective of the amount standing to the credit of the deceased account holder.
- Accounts with at survivor/nominee clause:- In case where deceased depositor had not made any nomination or for the account other than those styled as `either or survivor’ (such as single or jointly operated accounts), MHFSL shall adopt a simplified procedure for repayment to the legal heirs of the depositor, keeping in view the imperative need to avoid inconvenience and undue hardship to the common man. Keeping in view MHFSL’s risk management system, MHFSL has fixed limit for the amount up to which, claims in respect of deceased depositor could be settled without insisting on production of any documentary evidence, other than a letter of indemnity.
- Premature termination of term deposit accounts: In case of term deposits, MHFSL shall incorporate a clause in the account opening form itself, to the effect that in the event of death of the depositor, premature termination of term deposits would be allowed, subject to the provisions of Housing Finance Companies (NHB) Directions, 2001. The conditions subject to which, such premature withdrawal would be permitted will also be specified in the account opening form.
- Time limit for settlement of claims: MHFSL shall endeavour to settle the claims in respect of deceased depositors and release payments to survivors/nominees within a period, not exceeding 15 days from the date of receipt of claim, subject to production of proof of death of the depositor and suitable identification of the claims to the satisfaction of MHFSL.
9.1: Application for loans and their processing:-
- Loan Application form shall be comprehensive to include all requisite information which affects the interests of the borrower so that a meaningful comparison with the terms and conditions offered by other HFCs can be made and informed decision taken by the party. List of documents required will also be indicated to the applicant.
- MHFSL shall devise a system of giving acknowledgement for receipt of loan application. The time frame within which loan applications will be disposed of will be indicated to the applicant at the time of receipt of application.
9.2 Before granting loans, MHFSL shall assess whether customer will be able to repay the loan. If MHFSL cannot sanction the loan to the customer, it shall communicate in writing the reasons for the rejection. If the customer wants the MHFSL to accept a guarantee or other security for his/her liabilities, MHFSL may ask the customers for his permission to give confidential information about the financial position of the person, willing to give guarantee or other indemnity or other security. MHFSL may also:-
- Encourage the customers to take independent legal advice to make sure that they understand their commitment and possible consequences of their decision
- Inform the customers that by giving the guarantee or other security, they may also become liable and
- Tell them what their liability would be
9.3 Sourcing of proposals: At the time of sourcing of a loan proposal, MHFSL shall provide information about the interest rate, fees payable such as, administrative and processing fee, pre-payment options and pre-closure charges.
9.4 Normally, all particulars required for processing the loan application shall be collected by MHFSL at the time of application. In case, extra requirements are to be collected, the customer should be told about such requirements and he/she should be contacted immediately in this regard.
9.5 MHFSL shall convey to the customers about the sanction of the loan along with detailed terms and conditions and a loan offer letter should be sent.
9.6 MHFSL shall not discriminate on grounds of sex, caste, religion, etc in the matter of extending the loan. However, this does not preclude MHFSL from instituting or participating in the schemes framed by different sections of the society.
9.7 MHFSL shall furnish a copy of the loan agreement along with a copy each of all enclosures cited in the loan agreement to every borrower at the time of sanction/disbursement of the loan. If MHFSL cannot provide the loan to the applicant, it shall communicate the rejection and the reason therefor.
9.8 MHFSL shall process request for transfer of loan accounts either from borrower or from a bank/financial institution in the normal course.
9.9 Before taking a decision to recall/ accelerate payment or performance under the agreement, or seeking additional securities, MHFSL shall give notice to the borrower, in accordance with the loan agreement.
9.10 MHFSL shall release the securities immediately on repayment of all the dues/closure of outstanding liability, subject to any legitimate right or lien for any other claim MHFSL may have against the 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, MHFSL is entitled to retain the securities till the relevant claim is settled/paid.
- Loan will be disbursed in accordance with the terms & conditions for disbursement of loan as mentioned in his loan agreement.
- MHFSL will communicate verbally or otherwise to the party regarding any change in the terms & conditions of his loan agreement.
- If such change is to the disadvantage of the customer, he/she may within 60 days & without notice close his/her account or switch it without adhere to the modified terms & conditions.
- Decision to recall/accelerate payment or performance under the agreement or seeking additional securities will be in consonance with loan agreement.
When a person is coming forward to be a guarantor to a loan, he/she shall be informed about:-
- His/her liability as a guarantor
- The amount of liability he/she will be committing himself/herself to MHFSL
- Circumstances in which MHFSL will call on him/her to pay the liability
- Whether MHFSL has recourse to his/her other assets/ moneys in the company, if he/she fails to pay the amount as a guarantor.
- Whether his/her liabilities as guarantor are limited to a specific quantum or un-limited.; and
- Time and the circumstance in which, his/her liabilities as a guarantor, will be discharged as also the manner in which MHFSL will notify him/her about the same.
MHFSL shall keep the guarantor informed of any material adverse changes in the financial position of the borrower, to whom he/she stands as a guarantor.
12.1 MHFSL shall give information to the customer regarding the following:-
- Required verification such as residence verification, office verification, etc will be made by physically visiting his/her residence/office/business place or through agencies appointed for the purpose
- The customer should be asked to co-operate if MHFSL needs to investigate a transaction on customer’s account and with the police/other investigative agencies if MHFSL needs to involve them.
- MHFSL will advise the customer that if the customer acts fraudulently he/she will be responsible for all losses on his/her account and that if the customer acts without reasonable care and this causes losses the customer may be responsible for the same.
12.2 Periodical Review:
The Board will be the authority to periodically review compliance of Fair Practices code and functioning of the grievances redressal mechanism at various levels.
Annual percentage Rate (APR) on an average works out to 9.25 to 10.75 on Housing Loans