[As per the amended guidelines issued by RBI vide circular RBI/2016-17 UPDATED ON 22 -02-2019]

AS APPROVED BY THE BOARD OF DIRECTORS IN THE MEETING HELD ON 3RD JULY, 2019

MUTHOOT MERCANTILE LIMITED in pursuance of the directions issued by Reserve Bank of India Master Direction DNBR.PD.007/03.10.119/2016-17 dated September 01, 2016 Updated as on February 22, 2019 The Board and senior management will be responsible to ensure our commitment to fair and reasonable practices as also to ensure high quality services to our clients.

The Company undertakes to abide by all applicable laws, regulations and guidelines passed / issued by the Regulators (Reserve Bank India, Ministry of Corporate Affairs etc. and other competent authorities such as Government, Local Authority etc.

The Fair Practices Code adopted by the Company covers the following areas.

1. Applications for loans and their processing.

2. Loan appraisal and terms/conditions

3. Disbursement of loans, including changes in terms and conditions.

4. Disclosures about interest rates and approach for gradation of risk,

5. Policy on KYC, Appraisal, insurance, etc.

6. Confidentiality

7. Grievance redressal mechanism

8. General Provisions

KEY AREAS

APPLICATIONS FOR LOANS AND THEIR PROCESSING

• The application for loan will include matters/information regarding the charges, penal/overdue interest, interest calculation methodology, etc.
• As a matter of policy and customer service loan applications are sanctioned / rejected immediately. Disbursement of the loan and acceptance of security will be carried out nearly simultaneously.

LOANS APPRAISAL AND THEIR PROCESSING

• All relevant information pertaining to the loan has been made available in the relevant loan application form(s) in vernacular language including the necessary loan information and documents required, to be submitted together with the duly completed application form.

TERMS /CONDITION, INTEREST RATE & CHARGES AND OTHER DETAILS

• The Company shall issue a Pawn Ticket in vernacular language to the customer containing all the terms and conditions governing the loan facility. The pawn ticket will also contain the loan amount, loan account number, interest rate, charges, loan processing fees, penal interest etc. The pawn ticket will bear the signatures of the authorized officials and customer of the company. The pawn ticket will also serve as a receipt for the security pledged at the branch by the customer.
• The loan agreement shall also disclose the details regarding auction procedure.
• The application form will clearly state the information to be provided by the customer to fulfill the KYC norms and to comply with legal and regulatory requirements.

DISBURSEMENT OF LOANS INCLUDING CHANGES IN TERMS AND CONDITIONS

• • The terms and conditions of the loan shall be accepted by the borrower before disbursement of the loan amount. Any change in the terms and conditions of the loan, interest rates, service charges, etc. will be brought to the notice of the customer by sending notice in vernacular language as understood by the borrower.
• The company shall release all securities on repayment of all 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 the borrower. If such right to set off is to be exercised, the borrower shall be given notice in vernacular language about the same 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 / paid.
• The auction policy of the Company shall be approved by the Board. The auction of Gold in case of non-payment shall be transparent and adequate prior notice to the customer should be given before the auction date. The notice shall contain the auction procedure that would be followed by the Company.
• TThe rates of interest will be based on variables such as cost of funds, risk premium, loan scheme, loan per gram, profit margin etc. and shall be in conformity with the Interest Rate policy of the Company and Regulatory Guidelines from time to time. It shall also, by and large, be in tune with industry practices and benchmarks.

GENERAL

• The company will not interfere in the affairs of the borrower except for the purpose provided in the terms and conditions of the loan agreement.
• In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise of the company shall be conveyed within 21 days from the date of receipt of request. Such transfer shall as per transparent contractual terms in consonance with law.
• In the matter of recovery, the company will not resort to any type of undue harassment viz; persistently bothering the borrowers at odd hours, use of muscular power for recovery of loans etc. Company shall train all staff to deal with customers in a proper manner.
• The company shall state the repossession clause in the loan agreement with the borrower which shall contain provisions regarding notice period before taking possession, procedure for taking possession of the security, provision regarding final chance to be given to the borrower for repayment of the loan before auction/sale of security, procedure for giving repossession to the borrower and the procedure for auction of the property.
• The Company shall maintain appropriate internal principles and procedures in determining interest rates and other charges.
• The Company shall have proper assaying procedure for the Gold received and also maintain proper internal system to satisfy ownership of the gold jewellery.
• 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.
• The personnel information provided by the customers shall be kept confidential except at the instances as required by the statutory bodies regulating the affairs of the Company.
• The Company ensure that the securities against which the loan is granted is properly insured as prescribed by Reserve Bank of India.
• The Gold jewelley accepted as collateral by the company shall be appropriately insured.
• The Company undertakes not to take advantages of any unintentional or clerical error made by the customer while transacting business.
• The Company shall display the FPC on its website and also make available to the Customer, on request, a copy of the FPC on demand.
• The customers to comply with KYC norms as prescribed by the Reserve Bank of India and amended from time to time.

GRIEVANCE REDRESSAL MECHANISM

• The Company has framed suitable grievance redressal mechanism to resolve grievances / complaints of borrowers. All disputes arising out of the decisions of the company are heard and disposed by the Assistant General Manager of the company who is acting as the Grievance Redressal Officer / Principal Nodal Officer.The Management Committee consisting of Complaints received directly and appeals against the decisions of Regional Managers on complaints handled by him shall be heard and disposed of by the Grievances Redressal Officer. The company had put in place an effective Customer Grievance Redressal Mechanism details of which is displayed on head office and all the branches. The mechanism specify interalia the name & designations of the officials with whom complaints can be registered, their postal address / telephone numbers email address, time limit for acknowledging receipt of complaint, time limit for dealing with the complaint etc. Incase if the complaint / dispute of the customers is not redressed within a period of one month, the customer can appeal to the DGM, DNBS, Reserve Bank of India, P.B. No. 65077, Bakery Junction, Trivandrum – 695 033 (Officer-in-Charge of the Regional Office of DNBS of RBI).
• Board of Directors shall periodically review every six months and ensure that all the Grievances of customers are redressed as per the circulars issued / notifications by Reserve Bank of India from time to time. There shall be a Grievance Redressal Officer appointed by the Company to resolve the pending Grievances as the Board may decide from time to time.

FRAUD & OTHER MALPRACTICES

• During the operation of the business, any fraud or malpractices noted by the company shall be dealt with the legal provisions & procedures of the country. Any instances of fraud shall be reported to the police station within the jurisdiction of the company and the material / goods involved shall be handed over to the concerned authorities as per law.

CONFIDENTIALITY

• The company shall treat all personal information of its borrowers as private and confidential and will not reveal any information to any other entity other than for regulatory / statutory matters.