Fair Practices Code
Sai Gold OGL is committed to transparent, ethical, and customer-first lending practices in full compliance with RBI guidelines for Non-Banking Financial Companies.
This Fair Practices Code (FPC) has been framed by Sai Gold OGL in accordance with the Guidelines on Fair Practices Code for NBFCs issued by the Reserve Bank of India vide circular DNBS.CC.PD.No.266/03.10.01/2011-12 dated 26 March 2012, and updated as per the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023.
This Code aims to provide all stakeholders, especially customers, with an effective overview of the practices followed by the Company while offering its products and services, enabling them to take informed financial decisions.
This Fair Practices Code covers the following areas:
I. Objectives of the Fair Practices Code
This Fair Practices Code has been drawn up aiming to:
a. Adopt the best practices followed by entities in the financial and similar service sector while dealing with customers.
b. Provide customers with an effective overview of practices followed by the Company in respect of financial facilities and services offered.
c. Enable customers to take informed decisions about the financial facilities and services offered by the Company.
d. Promote good, fair, transparent and legally tenable practices by setting minimum standards in dealings with customers.
e. Enable customers to have a better understanding of what they can reasonably expect from the services offered by the Company.
f. Reckon with market forces through competition and strive to achieve higher operating standards.
g. Foster a fair and cordial relationship between the customers and the Company at all times.
II. Declarations & Commitments
i. The Company undertakes to abide by all applicable laws, regulations and guidelines passed/issued by the Regulators (Reserve Bank of India, SEBI, IRDA, etc.) and other competent authorities such as Government and Local Authorities.
ii. The Company commits itself to full customer satisfaction through efficient, professional and courteous services across all its offices.
iii. The Company shall consistently strive to meet with and improve upon the internally set benchmarks and practices and remain ahead of the standards prevalent in the industry.
iv. The Company undertakes not to discriminate against customers on grounds of religion, caste, gender, language or disability.
v. The Company will provide clear and complete information about its products and services to its customers and prospective customers, and will not resort to any misleading or potentially misguiding advertisement or publicity.
vi. The Company undertakes to refrain from introducing any products or services having elements of hidden charges or lack of transparency.
vii. The Company will communicate with customers in the local language and in English upon request.
viii. The Company undertakes to take all possible and reasonable measures to secure the safe custody of the security pledged by the customer and to compensate the customer for any accidental, inadvertent or fraudulent loss of the security whilst in the custody of the Company.
ix. The Company undertakes not to take advantage of any unintentional or clerical error made by the customer while transacting business.
x. The Company is committed to putting in place a system for promptly addressing complaints and suggestions of customers, supplemented with a structured Grievance Redressal Mechanism having an escalation matrix.
xi. The Company shall display this Fair Practices Code on its website and make available a copy to the customer on request.
III. Applications for Loans and Their Processing
a. All communications to the borrower shall be in English, in vernacular language, or in a language as understood by the borrower.
b. Loan application forms shall include all necessary information affecting the interests of the borrower, enabling them to take an informed decision by comparing terms and conditions with those of other similar NBFCs. The forms shall also indicate the documents required to be submitted by the borrower.
c. If any additional documents or information are required from the customer, the same shall be communicated to the customer immediately.
d. In case of all loans, other than gold loans which are sanctioned on the same day of receipt of the application, an acknowledgement shall be given to the applicant indicating the probable date by which a decision regarding sanction of the loan will be communicated. The acknowledgement may also be given as a tear-off from the application form or through an SMS message.
IV. Loan Appraisal and Terms and Conditions
a. Subject to receipt of all the requisite information, completion of documentation and creation of charge over the security, loan applications shall be disposed of in the normal course on the same day of receipt of the application form, complete in all respects. However, if there is any delay in sanctioning the loan beyond one day due to reasons such as field verification, the customer shall be given an acknowledgement for receipt of the application indicating the time frame within which the loan application will be disposed of. The customer shall be kept informed of the status of their application.
b. The borrower shall be given a loan sanction letter and a copy of the loan document in vernacular language or a language as understood by the borrower. This shall include details of the loan such as the amount sanctioned, annualised interest rate, method of application and any other terms and conditions.
c. Penal Charges: In the event of failure on the part of the borrower to repay the loan and accrued interest on the prescribed due date, penal charges as fixed by the Company from time to time shall be charged for the period of delay in repayment beyond the loan due date. Penal charges shall also be applicable for non-fulfillment of the terms and conditions of the loan. There shall be no capitalisation of penal charges — that is, no further interest shall be computed on the penal charges applied.
d. Details of penal charges shall be disclosed to customers in the loan sanction letter, loan document and Key Fact Statement (KFS).
e. The quantum of penal charges shall be reasonable and commensurate with the non-compliance of material terms and conditions of the loan contract, without being discriminatory within a particular loan or product category.
f. In addition to the applicable interest and penal charges, the Company may levy other charges such as Security Charges, Processing Charges, Service Charges, Documentation Charges, Charges for Lost Loan Tokens, SMS Charges, Auction Expenses, Dormancy Charges, Part Release Charges and Transaction Charges — all of which shall be intimated to the customer upfront.
g. An acknowledged copy of the sanction letter shall be kept as part of the loan document. Digital acknowledgement to the sanction letter and concurrence to the stated terms and conditions is also considered valid for compliance.
V. Disbursement of Loans Including Changes in Terms and Conditions
a. The loan shall be disbursed upon executing the necessary documents and completing the formalities regarding creation of charge over the security offered by the borrower. Any change in terms and conditions, including interest rates, service charges and prepayment charges, shall be communicated to the borrower in vernacular language or a language known to the borrower. Any changes in interest rates and charges shall be effected only prospectively. A suitable condition in this regard shall be incorporated in the loan document.
b. Decision to recall or accelerate payment or performance shall be as per the covenants in the loan document.
c. The Company shall release all securities on repayment of all dues or on realisation of the outstanding loan amount, subject to any legitimate right or lien for any other claim the Company may have against the borrower. If such right of set-off is to be exercised, the borrower shall be given notice with full particulars about the remaining claims and the conditions under which the Company is entitled to retain the securities till the relevant claim is settled or paid.
VI. Rate of Interest
a. The Company shall frame appropriate internal policies and procedures for determining interest rates and processing and other charges, ensuring they are not excessive. At the time of disbursement, the Company shall ensure that interest rates and other charges are in strict adherence to these internal policies.
b. Interest rates will be annualised rates so that the borrower is aware of the exact rates charged on the loan.
c. Interest shall be charged on the daily balance outstanding, calculated on the basis of the actual number of days from the date of availing the loan to the date of closure.
d. The information published on the website shall be updated whenever there is a change in rates of interest.
e. The rate of interest and the approach for gradation of risk — including the rationale for charging different rates of interest to different schemes — shall be disclosed in the application form and communicated explicitly in the sanction letter issued to the borrower.
f. Any rebate on interest rates offered to encourage timely periodical payment of interest, and any additional interest levied for loans crossing the sanctioned period, shall be mentioned clearly in the loan agreement.
g. No pre-payment penalties or foreclosure charges shall be levied on gold loans in the normal course. Where applicable for any scheme, such charges shall be disclosed in the sanction letter.
h. Changes in rate of interest shall be effected only prospectively.
i. The borrower shall be provided with a Key Facts Statement (KFS) transparently informing them about the key facts of the loan — namely the interest rate, other charges and fees, disbursement schedule, repayment terms and other qualitative information — in a simple, standardised format as per RBI norms, to enable the customer to take an informed financial decision.
Method of Calculation of Interest
Interest shall be calculated for the actual number of days the loan remains outstanding from the date of disbursement to the date of closure. However, if the borrower closes the loan within 7 days from the date of disbursement, a minimum interest for 7 days shall be payable for gold loan schemes where the minimum effective interest rate is more than 11%. For gold loan schemes with a minimum effective interest rate of 11% and below, a minimum interest for 15 days shall be payable if the borrower closes the loan within 15 days from the date of disbursement. If the amount of interest so calculated is less than ₹50, a minimum interest of ₹50 shall be charged.
A rebate in interest rate may be provided for encouraging timely repayment of interest or closure of the loan on or before the specified tenor, as per different slabs built into each scheme.
VII. Policy on KYC, Appraisal, Insurance, Storage of Securities and Auction
The Company shall put in place a Board-approved policy covering the following aspects:
a. Adequate steps to ensure that the KYC guidelines stipulated by the Reserve Bank of India are complied with and that adequate due diligence is carried out on the customer before extending any loan.
b. Proper appraisal procedure for assessing the value and purity of the jewellery accepted as collateral security.
c. A declaration shall be obtained from the borrower confirming ownership of the gold jewellery pledged as security.
d. All branches shall have proper storage facilities — either Strong Rooms or BIS-standard Safes of reputed make — to store the jewellery in safe custody. The sets of keys shall be held separately by two officials and operations shall be conducted jointly. Staff shall be trained on a continuous basis to ensure strict adherence to security guidelines. Gold items shall be periodically inspected by internal auditors to ensure quality, quantity and proper storage.
e. The jewellery accepted as collateral security shall be adequately and appropriately insured at all times.
f. The auction procedure in case of non-repayment shall be transparent. Prior notice shall be given to the borrower before the auction and there shall be no conflict of interest. The auction process shall ensure an arm’s length relationship in all transactions, including with group companies and related entities. Details regarding the auction procedure shall be disclosed in the loan document. Auctions shall be conducted only through auctioneers approved by the Board, and the Company shall not participate in its own auctions.
g. The auction shall be announced to the public by issue of advertisements in at least two newspapers — one in vernacular language and one in a national daily newspaper.
h. The Company must insist on a copy of the PAN Card of the borrower for all gold loan transactions above ₹5 lakh.
i. Documentation across all branches must be standardised.
j. Systems and procedures shall be in place for dealing with fraud, including separation of duties across mobilisation, execution and approval functions. Any fraud in the functioning of the Company shall be enquired into by the appropriate authority and suitable punitive measures shall be taken. Any review of the decision of the disciplinary authority shall be carried out by the Managing Director.
VIII. Confidentiality
a. Unless authorised by the borrower, the Company will treat all personal information as private and confidential.
b. The Company will not reveal transaction details of borrowers to any other person except under the following circumstances:
i. If the Company is required to provide the information as per regulatory directives to any statutory or regulatory body.
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 specifically authorised the Company to provide such information to its group, associate or other entities as agreed upon.
IX. Customer Grievance Redressal Mechanism
Towards ensuring redressal of disputes arising out of decisions of the functionaries of the Company, the following mechanism is in place:
a. The decisions of any official below the Branch Manager shall be heard and disposed of by the Branch Manager.
b. Decisions of Branch Managers shall be heard and disposed of by the Regional Manager.
c. If not satisfied with the decision of the Regional Manager, the customer has the option to escalate the matter to the Grievances Redressal Cell at the Company’s Head Office.
d. Grievances against any outsourced agencies engaged by the Company for activities such as sourcing of applications or collections shall also come under the purview of this Grievance Redressal Mechanism.
e. The Customer Grievances Redressal Cell at the Company’s Head Office shall be headed by an official not below the grade of Asst. General Manager, who shall be designated as the Grievance Redressal Officer.
f. Complaints received directly and appeals against the decisions of Regional Managers shall be heard and disposed of by the Grievance Redressal Officer at Head Office. This official shall also be the designated Principal Nodal Officer (PNO) for the RBI Integrated Ombudsman Scheme.
g. If the complaint or dispute is not redressed within a period of one month, the customer may appeal to the RBI Integrated Ombudsman at the Centralised Receipt & Processing Centre, Chandigarh, as per the contact details displayed in all branches.
h. The contact details of the Grievance Redressal Officer & PNO, and that of the RBI Integrated Ombudsman / Regional Office of the Reserve Bank of India, shall be displayed in all branches for the benefit of customers.
i. Wherever the Company decides, after careful examination, to reject a complaint partly or wholly, the rejection shall be communicated to the complainant only after obtaining approval of the Internal Ombudsman (IO) appointed as per RBI guidelines.
j. Proper training shall be imparted to staff on an ongoing basis to improve staff behaviour and customer service.
k. Compliance with the Fair Practices Code and the functioning of the Customer Grievances Redressal Cell shall be reviewed by the Managing Director on a quarterly basis, and a consolidated report shall be placed before the Board of Directors.
X. General Provisions
a. The Company shall display the normal business hours at respective branches, the list of holidays, and notify any changes by way of a notice displayed in the branch premises or through press notification.
b. Personal information of the customer will not be shared with unauthorised persons, agencies or third parties. However, the Company shall comply with any legal or regulatory requirements obligating it to part with such information, even without notice to the customer.
c. The Company shall refrain from interfering in the affairs of the borrower except for the purposes provided in the terms and conditions of the letter of undertaking, or when new information not earlier disclosed by the borrower has come to the notice of the Company.
d. The Company will not entertain any request for transfer of borrowal accounts, as this is not practical in the case of loans granted against collateral of gold jewellery pledged.
e. In the matter of recovery of loans, the Company shall not resort to undue harassment — such as persistently bothering borrowers at odd hours or use of muscle power for recovery of loans. Staff of the Company shall be adequately trained to deal with customers in an appropriate manner.
f. The Company will contact delinquent customers between 09:00 hrs and 18:00 hrs, unless special circumstances of the borrower’s business require otherwise.
g. A periodical review of this Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management shall be undertaken by the Company at yearly intervals, and a consolidated report of such reviews shall be submitted to the Board of Directors.
This Fair Practices Code is subject to periodic review in compliance with Reserve Bank of India guidelines and updated from time to time.