Fair Practice Code

Introduction

The FPC is made to ensure fairness and transparency in dealings with the customers of ARTH and applies to all products and services offered by it.

Purpose & Objective

This Fair Practice Code ("FPC" or the "Code") is framed in accordance with the guidelines outlined in the Master Direction – RBI (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 DoR.FIN.REC.No.45/03.10.119/2023-24 issued by the Reserve Bank of India. This FPC is made with the intent to ensure fairness and transparency in dealings with the borrowers/customers of ARTH and applies to all products and services offered by it. All employees, management, and the Board of ARTH are bound by this FPC. The Code, as revised from time to time, will be available on the website for information of various stakeholders.

Key Commitment

  • An extensive process has been devised for the verification & profiling of the beneficiaries and disbursement of the grants.
  • ARTH will act under the FPC to ensure the fulfillment of all its social/business goals:
    • Livelihood support
    • Micro-enterprise finance
    • Hyper-local economy development
  • The company will ensure all its dealings are based on principles of integrity and transparency.
  • The company will ensure all the products and services comply with relevant laws and regulations.
  • The company will promote good practices in dealing with borrowers of the company ("Customers").
  • The company will promote a fair relationship between the Customer and the Company.
  • To ensure compliance with legal norms in matters relating to recovery of advances.
  • To strengthen mechanisms for redressal of customer grievances.

Guidelines

This FPC applies to the following areas:

  • Applications for loans & their processing
  • Loan appraisal and terms/conditions
  • Disbursement of loans including changes in terms and conditions
  • Rate of interest charged
  • Customer grievance redressal
  • Technology
  • Client protection

1. Application for Loans and Processing

  • As a part of lending activity, loans will be provided to customers for their business requirements ranging from small to medium-sized enterprises.
  • All communications to the borrower shall be in the vernacular language or a language understood by the borrower.
  • Customers will be informed prior to disbursement about fees/charges, prepayment options, or any other matter affecting their interest.
  • The company shall communicate any loan application rejections to the customers.

2. Loan Appraisal and Terms & Conditions

  • The sanctioned loan amount and terms/conditions will be conveyed to the borrower, and their acceptance will be recorded.
  • A copy of the loan agreement and relevant enclosures will be provided to the borrower.
  • ARTH will conduct a credit assessment of all loan applications in line with its credit policy and regulatory guidelines.

3. Disbursement of Loans Including Changes in Terms & Conditions

  • Loans will be disbursed on time as per the agreed terms and conditions.
  • Any changes in terms, including interest rates or charges, will be communicated to the borrower in advance.

4. Rate of Interest Charged

  • Interest rates and associated charges will be determined based on factors such as cost of funds, margin, and risk premium.
  • The APR will include all costs to ensure transparency for borrowers.

5. Customer Grievance Redressal

  • A robust grievance redressal mechanism will resolve disputes raised by customers.
  • Details of the grievance officer will be provided on the company website and loan agreements.
  • Unresolved complaints can be escalated to the RBI as per the given process.

6. Technology

  • Customer data privacy and security will be prioritized.
  • Explicit consent will be obtained for data usage or sharing with third parties.
  • All data will be stored on servers located in India.

7. Client Protection

  • Loan recovery will not involve harassment.
  • Staff will be trained to treat customers respectfully and appropriately.
  • Customer information will remain confidential unless required by law or agreed by the customer.

Review

The FPC and the grievance redressal mechanism will be reviewed periodically. Amendments will be made based on changes in operating models, product offerings, or regulatory guidelines.

Implementation

The FPC will be effective from the date of adoption by the Board.

Amendment

The FPC will be updated periodically, with updates effective from the date of Board adoption.

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