Lord Fincap

Fair Practices Code

Lord Fincap Limited (“Company”) has formulated this Fair Practices Code (“Code”) for its lending  operations in accordance with guidelines prescribed by the Reserve Bank of India (“RBI”), time and  again. The objective of this Code is to assure all borrowers of the Company with respect to the  Company’s dedication to fair and transparent dealings in its business transactions. It is applicable to any  loan sanctioned and disbursed by the Company.  

Non-discrimination policy

The Company shall not discriminate in extending products and facilities including loan  facilities to physically/visually challenged applicants on grounds of disability, or between  customers/borrowers on the basis of gender, race or religion. All branches of the Company  shall render all possible assistance to physically/visually challenged applicants for availing of  the various business facilities. The Company shall include a suitable module containing the  rights of persons with disabilities guaranteed to them by the law and international conventions,  in all the training programmes conducted for their employees at all levels. 

Applications for loans and their processing

a) All communications to the borrower shall be in the vernacular language or a language as  understood by the borrower.  

b) Loan application forms shall include necessary information which affects the interest of the  borrower, so that a meaningful comparison with the terms and conditions offered by other non banking financial companies (“NBFCs”) can be made and informed decision can be taken by  the borrower.  

c) The Company loan application form shall indicate the documents required to be submitted  along with the application form.  

d) The Company shall collect all necessary information from the customer only with prior customer consent and the borrower shall be provided with an option to provide or deny consent for use of such information as mentioned in the privacy policy. 

e) The Company shall issue an acknowledgement for receipt of all loan applications. The time  frame within which loan applications will be disposed of shall also be indicated in the  acknowledgement. Subject to receipt of all the requisite documentation and information, loan applications shall be disposed of within [30 days], from the date of receipt of the application form complete in all respects. The Company will endeavour to keep the customer / applicant  informed with regard to the status of his/her/its application from time to time. The customer  may also contact the Company’s customer service team at the toll-free number or email id made  available at partner branches, the head office, the website, and any other location where the  Company conducts its business to obtain an update on the status of application.  

f) If any additional details/ documents are required, the same shall be intimated to the borrowers at the earliest.

Loan appraisal and terms/ conditions

a) The Company ensures proper assessment of the loan proposal based on Company’s internal  guidelines & procedures.

b) The Company shall convey in writing to the borrower in the vernacular language as understood  by the borrower by means of sanction letter or otherwise, the amount of loan sanctioned along  with the terms and conditions including annualised rate of interest and method of application  thereof and keep the acceptance of these terms and conditions by the borrower on its record.  

c) The Company shall furnish a copy of the loan agreement in language as understood by the  borrower 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. The Company shall mention the  penalties charged for late repayment in bold in the loan agreement. To ensure transparency, the  terms and conditions of the contract/loan agreement shall also contain provisions regarding:  

(i) Notice period before taking possession;  

(ii) Circumstances under which the notice period can be waived;  

(iii) The procedure for taking possession of the security;  

(iv) A provision regarding final chance to be given to the borrower for repayment of loan before  the sale/ auction of the property;  

(v) The procedure for giving repossession to the borrower; and  

(vi) The procedure for sale/auction of the property. 

d) The Company shall have a built-in re-possession clause in the contract/loan agreement with the  borrower which must be legally enforceable. 

Penal charges in loan accounts

a) Penalty, if charged, for non-compliance of material terms and conditions of loan contract by the  borrower shall be treated as ‘penal charges’ and shall not be levied in the form of ‘penal interest’  that is added to the rate of interest charged on the advances. There shall be no capitalisation of  penal charges i.e., no further interest computed on such charges. However, this shall not affect  the normal procedures for compounding of interest in the loan account. 

b) Company shall not introduce any additional component to the rate of interest and ensure  compliance to the Code in both letter and spirit. [Note to draft: Company shall formulate a  board approved policy on penal charges or similar charges on loans, by whatever name called.] 

c) The quantum of penal charges shall be reasonable and commensurate with the non-compliance  of material terms and conditions of loan contract without being discriminatory within a  particular loan/product category.  

d) The penal charges in case of loans sanctioned to ‘individual borrowers, for purposes other than  business’, shall not be higher than the penal charges to non-individual borrowers for similar  non-compliance of material terms and conditions.  

e) The quantum and reason for penal charges shall be clearly disclosed by the Company to the  customers in the loan agreement and most important terms & conditions/Key Fact Statement  (KFS) as, in addition to being displayed on websites of Company under Interest rates and  Service Charges.  

f) Whenever reminders for non-compliance of material terms and conditions of loan are sent to  borrowers, the penal charges shall be communicated to the borrowers. Further, any instance of  levy of penal charges and the reason therefor shall also be communicated to the borrowers.

Disbursement of loans including changes in terms and conditions

a) Company shall give notice to the borrower in the vernacular language, or a language as  understood by the borrower of any change in the terms and conditions including disbursement  schedule, interest rates, service charges, prepayment charges etc. Company shall also ensure  that changes in interest rates and charges are affected only prospectively. A suitable condition  in this regard must be incorporated in the loan agreement.  

b) Decision to recall/accelerate payment or performance under the agreement shall be in  consonance with the loan agreement.  

c) Company shall release all securities on repayment of all dues or on realisation of the  outstanding amount of loan subject to any legitimate right or lien for any other claim they 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 Company is entitled to retain the securities till the relevant claim is settled/paid. 

Loan Sourced from Digital Lending Platforms

a) Names of digital lending platforms engaged as sourcing agents (referred to as agents,  hereinafter) shall be disclosed on the website of the Company. 

b) Digital lending platforms engaged as agents shall disclose upfront to the customer, Company’s  name and Company will disclose the agents name on whose behalf they are interacting with  him.  

c) Immediately after sanction but before execution of the loan agreement, the sanction letter shall  be issued to the borrower on the letter head of Company.  

d) A copy of the loan agreement along with a copy each of all enclosures quoted in the loan  agreement shall be furnished to all borrowers at the time of sanction/ disbursement of loans.  Effective oversight and monitoring shall be ensured over the digital lending platforms engaged  by the Company.  

e) Adequate efforts shall be made towards creation of awareness about the grievance redressal  mechanism. 

Lending Conduct – Release of movable/immovable property documents on repayment/ settlement of personal loans

a) Release of movable/immovable property documents 

i) Company shall release all the original movable / immovable property documents and  remove charges registered with any registry within a period of 30 (thirty) days after  full repayment/settlement of the loan account.  

ii) The borrower shall be given the option of collecting the original movable/ immovable  property documents either from the banking outlet/branch where the loan account was serviced or any other office of the Company where the documents are available, as per  her/his preference. 

iii. The timeline and place of return of original movable/immovable property documents  shall be mentioned in the loan sanction letters issued on or after the effective date.  

iv) In order to address the contingent event of demise of the sole borrower or joint  borrowers, Company shall have a well laid out procedure for return of original  movable/immovable property documents to the legal heirs. Such procedure shall be  displayed on the website of Company along with other similar policies and procedures  for customer information. 

b) Compensation for delay in release of movable/immovable property documents 

i) In case of delay in releasing of original movable/immovable property documents or  failing to file charge satisfaction form with relevant registry beyond 30 (thirty) days  after full repayment/ settlement of loan, the Company shall communicate to the  borrower reasons for such delay. In case where the delay is attributable to the  Company, it shall compensate the borrower at the rate of INR 5,000 (Indian Rupees  Five Thousand) for each day of delay. 

ii) In case of loss/damage to original movable/immovable property documents, either in  part or in full, the Company shall assist the borrower in obtaining duplicate/certified  copies of the movable/immovable property documents and shall bear the associated  costs, in addition to paying compensation as indicated at clause 4(b)(i) above.  However, in such cases, an additional time of 30 (thirty) days will be available to the  Company to complete this procedure and the delayed period penalty will be calculated  thereafter (i.e., after a total period of 60 days).  

iii) The compensation provided under these directions shall be without prejudice to the  rights of a borrower to get any other compensation as per any applicable law. 

Reset of floating interest rate on Equated Monthly Instalments (EMI) based personal loans

a) At the time of sanction of EMI based floating rate personal loans, Company is required to take  into account the repayment capacity of borrowers to ensure that adequate headroom/margin is  available for elongation of tenor and/or increase in EMI, in the scenario of possible increase in  the external benchmark rate during the tenor of the loan.  

b) The Company shall put in place a board approved policy meeting the following requirements  for implementation and compliance:  

(i) At the time of sanction, the Company shall clearly communicate to the borrowers about the  possible impact of change in benchmark interest rate on the loan leading to changes in EMI  and/or tenor or both. Subsequently, any increase in the EMI/ tenor or both on account of  the above shall be communicated to the borrower immediately through appropriate  channels.  

(ii) At the time of reset of interest rates, the Company shall provide the option to the borrowers  to switch over to a fixed rate as per their board approved policy. The policy, inter alia, may  

(iii) The borrowers shall also be given the choice to opt for (a) enhancement in EMI or  elongation of tenor or for a combination of both options; and, (b) to prepay, either in part  or in full, at any point during the tenor of the loan. Levy of foreclosure charges/ prepayment  penalty shall be subject to extant instructions.  

(iv) All applicable charges for switching of loans from floating to fixed rate and any other  service charges/ administrative costs incidental to the exercise of the above options shall  be transparently disclosed in the sanction letter and also at the time of revision of such  charges/ costs by the Company from time to time.  

(v) The Company shall ensure that the elongation of tenor in case of floating rate loan does not  result in negative amortisation.  

(vi) The Company shall share/ make accessible to the borrowers, through appropriate channels,  a statement at the end of each quarter which shall at the minimum, enumerate the principal  and interest recovered till date, EMI amount, number of EMIs left and annualized rate of  interest/Annual Percentage Rate (APR) for the entire tenor of the loan. The Company shall  ensure that the statements are simple and easily understood by the borrower.  

c) Apart from the equated monthly instalment loans, the above mentioned board approved policy  would also apply, mutatis mutandis, to all equated instalment based loans of different  periodicities. 

Regulation of interest charged by Company

a) The board of the Company shall adopt an interest rate model taking into account relevant factors  such as cost of funds, margin and risk premium and determine the rate of interest to be charged  for loans and advances. The rate of interest and the approach for gradations of risk 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.  

b) The rates of interest and the approach for gradation of risks shall also be made available on the  website of the companies or published in the relevant newspapers. The information published  on the website or otherwise published shall be updated whenever there is a change in the rates  of interest.  

c) The rate of interest must be annualised rate so that the borrower is aware of the exact rates that  would be charged to the account. 

d) The board of the Company shall lay out appropriate internal principles and procedures in  determining interest rates and processing and other charges and should be made transparent to  the terms and conditions of the loan.


a) The Company shall refrain from interference in the affairs of the borrower except for the  purposes provided in the terms and conditions of the loan agreement (unless information, not  earlier disclosed by the borrower, has been noticed). 

b) In case of receipt of request from the borrower for transfer of borrowal account, the consent or  otherwise i.e., objection of the Company, if any, shall be conveyed within 21 (twenty one) days  from the date of receipt of request. Such transfer shall be as per transparent contractual terms  in consonance with law.  

c) As a measure of customer protection and also in order to bring in uniformity with regard to  prepayment of various loans by borrowers of banks and NBFCs, the Company shall not charge  foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned for  purposes other than business to individual borrowers, with or without co-obligant(s). 

d) Company shall communicate to the borrower, at the time of sanctioning of the loan and also at  the time of passing on the recovery responsibilities to a lending service provider (“LSP”) or  change in the LSP responsible for recovery, the details of the LSP acting as recovery agent who  is authorised to approach the borrower for recovery. 

e) In the matter of recovery of loans, the Company shall not resort to undue harassment viz.,  persistently bothering the borrowers at odd hours, use muscle power for recovery of loans etc.  The Company shall ensure that the staff are adequately trained to deal with the customers in an  appropriate manner.  

f) Code of Conduct for our recovery agents: 

The Company and their agents shall not resort to intimidation or harassment of any kind, either  verbal or physical, against any person in their debt collection efforts, including acts intended to  humiliate publicly or intrude upon the privacy of the debtors’ family members, referees and  friends, sending inappropriate messages either on mobile or through social media, making  threatening and/or anonymous calls persistently calling the borrower and/or calling the  borrower before 8:00 a.m. and after 7:00 p.m. for recovery of overdue loans or making false  and misleading representations. 

Language of communicating this Code

a) The Company shall endeavour to have this Code translated into any vernacular language or other language as understood by the borrowers.


a) Unless authorized by the borrower, the Company will treat all personal information as  private and confidential. 

b) The Company may not reveal transaction details of the borrowers to any other persons  except under following circumstances.  

  • i) If the Company is required to provide the information as per regulatory directives to  any statutory or regulatory body or bodies. 
  • ii) If arising out of a duty to the public to reveal the information. 
  • iii) If it is in the interest of the borrowers to provide such information (e.g. fraud  prevention) 
  • iv) If the borrower has authorized the Company to provide such information to its  group/associate/entities or Companies or any such person/entity as specifically agreed  upon. 
Grievance redressal mechanism

The grievance redressal mechanism is as per the policy attached here

Review and updates in the Code

Any subsequent modifications/ updates in this Code shall be updated on the Company’s  website. The implementation of this Code shall be monitored and reviewed periodically by the  board of the Company.