Swarna Pragati Housing Microfinance Private Limited. (SPHM or the Company)’s endeavor is to provide financial services to the base of the pyramid segment to help build a society where everyone has a conducive habitat to live and work in with dignity and to be the preferred provider of innovative financial solutions for housing, particularly to Economically Weaker Section (EWS) and Low Income Groups (LIG) in rural and semi-urban areas. The vision of SPHM is to be the leader in the housing microfinance in the country, to create a decent habitat for all, to create value for all stakeholders by building a profitable business providing financial assess for housing in hitherto underserved areas. SPHM aims to achieve its mission and vision through the following values:
- To place the customer’s interest first
- To be transparent and ethical in approach in all dealings
- To be sensitive towards social and environmental concerns
- To encourage teamwork, professionalism and a culture of learning & innovation
- To provide for transparency in transactions between the institutions and the end users and also to provide for well informed business relationships, some broad guidelines have been considered
necessary. In this backdrop, the National Housing Bank, has framed the Guidelines on Fair Practices
Code for HFCs to serve as a part of best corporate practices and to provide transparency in business
This Code has been formulated by SPHM, pursuant to the Guidelines issued by the National Housing
Bank (“NHB”) in terms of its circulars
1. NHB/ND/DRS/Pol-No.34/2010-11 dated October, 2010
2. NHB(ND)/DRS/Pol-No. 38/2010-11 dated April 25, 2011
3. NHB (ND)/DRS/Policy Circular No.74/2015-16 dated December 31, 2015
4. NHB(ND)/DRS/Misc. Circular No. 7/2012 dated January 3, 2012
5. NHB (ND NHB(ND)/DRS/Policy Circular No.73/2015-16 dated December 3, 2015
6. NHB(ND)/DRS/Misc. Circular No.16/2015-16 dated December 3, 2015
and updated as per its Master Circular NHB(ND)/DRS/REG/MC-03/2016 dated July 1, 2016 , NHB(ND) / DRS
/ REG / MC-03/2017 dated July 1, 2017 on Fair Practices Code for Housing Finance Companies.
1. Objectives & Application
- To promote good and fair practices by setting minimum standards in dealing with customers.
- To increase transparency so that the customer can have a better understanding of what s/he can
reasonably expect of the services.
- To promote a fair relationship between the customer and the company.
- To encourage market forces, through fair competition, to achieve higher operating standards
- To foster confidence in the housing finance system overall.
1.2 Application of the Code
All parts of this Code apply to all the products and services, whether they are provided by the Company across the counter, over the phone, by post, through interactive electronic devices, on the internet or by any other method.
2. Acting fairly and in a transparent manner
The Company will act fairly and reasonably in all dealings with customers, by ensuring that:
a) The Company meets the commitments and standards in this Code for the products and services they offer and in the procedures and practices their stafffollows.
b) The Company’s products and services meet relevant laws and regulations in letter and spirit.
c) The Company’s dealings with customers’ rest on ethical principles of integrity and transparency. (2A) The Company will transparently disclose to the borrower all information about fees/charges payable for processing the loan application, the amount of fees refundable if loan amount is not sanctioned/disbursed, pre-payment options and charges, if any, penalty for delayed repayment if any, conversion charges for switching loan from fixed to floating rates or vice-versa, existence of any interest reset clause and any other matter which affects the interest of the borrower. In other words, the Company will disclose ‘all in cost’ inclusive of all charges involved in processing/sanction of loan application in a transparent manner. It will also be ensured that such changes/fees are non-discriminatory.
3. Advertising, Marketing and Sales
a) Ensure that all advertising and promotional material is clear, and not misleading.
b) In any advertising in any media and promotional literature that draws attention to a service or product and includes a reference to an interest rate, SPHM shall also indicate whether other fees and charges will apply and that full details of the relevant terms and conditions are available on request.
c) SPHM shall provide information on interest rates, common fees and charges by putting up notices in its branches; through telephone or help-lines; on the company’s website; through designated staff / help desk; or providing service guide / tariff schedule.
d) If SPHM avails of the services of third parties for providing support services, SPHM shall require that such third parties handle customer’s personal information (if any available to such third parties) with the same degree of confidentiality and security as SPHM would.
e) SPHM may, from time to time, communicate to customers various features of their products availed by them. Information about its other products or promotional offers in respect of products/services, may be conveyed to customers only if s/he has given his/her consent to receive such information/service either by mail or by registering for the same on the website or on customer service number.
f) Prescribe a code of conduct for its Direct Selling Agencies (DSAs), if used to market products/services, which among other matters will require them to identify themselves when they approach the customer for selling products personally or through phone.
g) In the event of receipt of any complaint from the customer that SPHM’s representative/courier or DSA has engaged in any improper conduct or acted in violation of this Code, appropriate steps will be initiated to investigate and to handle the complaint and to make good the loss.
4.1 Applications for loans and their processing
a) Loan application forms will include necessary information which affects the interest of the borrower, so that a meaningful comparison with the terms and conditions offered by other HFCs can be made and informed decision can be taken by the borrower. The loan application form will indicate the list of documents required to be submitted with the application form.
b) The Company shall have a system of giving acknowledgement for receipt of all loan applications. The time frame within which loan applications will be disposed of will also be indicated in the acknowledgement.
4.2 Loan appraisal and terms/conditions
a) Normally all particulars required for processing the loan application shall be collected by the Company at the time of application. In case it needs any additional information, the customer will be told that s/he would be contacted immediately again.
b) The Company shall convey in writing to the borrower by means of sanction letter or otherwise, the amount of loan sanctioned along with all terms and conditions including annualized rate of interest, method of application, EMI Structure, prepayment charges and keep the written acceptance of these terms and conditions by the borrower on its record.
c) The Company shall invariably furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to every borrower at the time of sanction / disbursement of loans.
4.3 Communication of rejection of Loan Application
If SPHM cannot provide the loan to the customer, it will communicate in writing the reason(s) for rejection.
4.4 Disbursement of loans including changes in terms and conditions
a) Disbursement will be made in accordance with the disbursement schedule given in the Loan Agreement/Sanction Letter or as per the Agreement for Sale which covers terms of payment by the customer and the builder (in the case of under construction properties) which would need to be confirmed and accepted by SPHM.
b) SPHM will give notice to the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges, other applicable fee/ charges etc. SPHM will also ensure that changes in interest rates and charges are effected only prospectively. A suitable condition in this regard shall be incorporated in the loan agreement.
c) If such change is to the disadvantage of the customer, s/he may within 60 days and without notice close his/her account or switch it without having to pay any extra charges or interest.
d) Decision to recall / accelerate payment or performance under the agreement or seeking additional securities, will be in consonance with the loan agreement.
e) SPHM will 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 SPHM may have against the borrower. If such right of set off is to be exercised, the borrower will be given notice about the same with full particulars about the remaining claims and the conditions under which SPHM is entitled to retain the securities till the relevant claim is settled /paid.
When a person is considering being a guarantor to a loan, s/he will be informed about
a) his/her liability as guarantor;
b) the amount of liability he will be committing him/herself to the company;
c) circumstances in which SPHM will call on him/her to pay up his/herliability;
d) whether SPHM has recourse to his/her other monies in the company if s/he fails to pay up as a guarantor;
e) whether his/her liabilities as a guarantor are limited to a specific quantum or are they
f) time and circumstances in which his/her liabilities as a guarantor will be discharged as also the manner in which SPHM will notify him/her aboutthis.
g) in case the guarantor refuses to comply with the demand made by the creditor /lender, despite having sufficient means to make payment of the dues, such guarantor would also be treated as a wilful defaulter SPHM will keep him/her informed of any material adverse change/s in the financial position of the borrower to whom s/he stands as a guarantor.
4.6 Privacy and Confidentiality
All personal information of customers shall be treated as private and confidential (even when them customers are no longer customers), and will be guided by the following principles and policies. SPHM will not reveal information or data relating to customer accounts, whether provided by the customers or otherwise, to anyone, including other companies/entities in SPHM’s group, other than in the following exceptional cases:
a) If the information is to be given by law;
b) If there is a duty towards the public to reveal the information;
c) If SPHM’s interests require them to give the information (for example, to prevent fraud) but it shall
not be used as a reason for giving information about customer or customer accounts (including customer name and address) to anyone else, including other companies in the group, for marketing purposes;
d) If the customer asks SPHM to reveal the information, or with the customer’s permission;
e) If SPHM is asked to give a reference about customers, it will obtain his/her written permission before giving it;
f) The customer will be informed the extent of his/her rights under the existing legal framework for accessing the personal records that SPHM holds about him/her;
g) SPHM shall not use customer’s personal information for marketing purposes by anyone including SPHM unless the customer specifically authorizes SPHM to do so.
4.7 Credit reference agencies
a) When a customer opens an account, SPHM will inform him/her that it will pass his/her account details to credit reference agencies and the checks SPHM may make with them.
b) SPHM may give information to credit reference agencies about the personal debts the customer owes to it if:
i. the customer has fallen behind with his/ her payments;
ii. the amount owed is not in dispute; and
iii. the customer has not made proposals that SPHM is satisfied with, for repaying his / her debt, following SPHM’s formal demand.
c) In these cases, SPHM will intimate the customer in writing that they plan to give information about the debts the customer owes it to credit reference agencies. At the same time, SPHM will explain to the customer the role of credit reference agencies and the effect the information they provide can have on customer’s ability to get credit.
d) SPHM will give credit reference agencies other information about the customer’s account if the customer has given them his / her permission to do so.
e) A copy of the information given to the credit reference agencies will be provided by SPHM to a customer, if so demanded.
4.8 Collection of Dues
4.8.1 Whenever loans are given, SPHM will explain to the customer the repayment process by way of amount, tenure and periodicity of repayment. However, if the customer does not adhere to the repayment schedule, a defined process in accordance with the laws of the land will be followed for recovery of dues. The process will involve reminding the customer by sending him/her notice or by making personal visits and / or repossession of security if any.
4.8.2 SPHM’s collection policy will be built on courtesy, fair treatment and persuasion, and will be aimed at fostering customer confidence and a long- term relationship. SPHM’s staff or any person authorized to represent it in collection of dues and / or security repossession will identify himself/herself and display the authority letter issued by SPHM and upon request, display his/her identity card issued by SPHM or under authority of the company. SPHM will provide customers with all the information regarding dues and will endeavor to give sufficient notice for payment of dues.
4.8.2 All the members of the staff or any person authorised to represent SPHM in collection and / or security repossession will follow the guidelines set out below:
a) Customers will be contacted ordinarily at the place of his/her choice and in the absence of any specified place at the place of his/her residence and if unavailable at his/her residence, at the place of business / occupation.
b) Identity and authority to represent SPHM will be made known to the customer at the first
c) Customer’s privacy will be respected.
d) Interaction with the customer will be in a civil manner.
e) SPHM’s representatives will contact customers between 0700 hrs and 1900 hrs, unless the special circumstances of the customer’s business or occupation require otherwise.
f) Customer’s request to avoid calls at a particular time or at a particular place will be honored
as far as possible.
g) Time and number of calls and contents of conversation will be documented.
h) All assistance will be given to resolve disputes or differences regarding dues in a mutually
acceptable and in an orderly manner.
i) During visits to customer’s place for dues collection, decency and decorum will be
j) Inappropriate occasions such as bereavement in the family or such other calamitous
occasions will be avoided for making calls/visits to collect dues.
4.9 Complaints and Grievances
a) SPHM shall have a system and procedure for receiving, registering and disposing of complaints and grievances in each of its offices.
b) The Board of Directors of SPHM shall lay down the appropriate grievance readdress mechanism within the organization to resolve complaints and grievances. Such a mechanism shall ensure that all disputes arising out of the decisions of SPHM’s functionaries are heard and disposed of at least at the next higher level.
c) Customer will be told where to find details of SPHM’s procedure for handling complaints fairly and
d) If the customer wants to make a complaint, s/he will be told:
I. How to do this
II. Where a complaint can be made
III. How a complaint should be made
IV. When to expect a reply
V. Whom to approach for redressal
VI. What to do if the customer is not happy about the outcome.
VII. SPHM’s staff shall help the customer with any questions the customer has. e) If a complaint has been received in writing from a customer, SPHM will endeavour to send him/her an acknowledgement / a response within a week. The acknowledgement will contain the name & designation of the official who will deal with the grievance. If the complaint is relayed over phone at SPHM’s designated telephone helpdesk or customer service number, the customer will be provided with a complaint reference number and be kept informed of the progress within a reasonable period of time.
f) After examining the matter, SPHM will send the customer its final response or explain why it needs more time to respond and will endeavour to do so within six weeks of receipt of a complaint and s/he will be informed how to take his/her complaint further if s/he is still not satisfied.
g) SPHM shall publicize its grievance redressal procedure (e-mail id and other contact details at which the complaints can be lodged, turnaround time for resolving the issue, matrix for escalation, etc.) for
lodging the complaints by the aggrieved borrower and ensure that it is specifically made available on its website. SPHM shall clearly display in all its offices / branches and on the website that in case the complaint does not receive response from the company within reasonable time or is dissatisfied with the response received, the complainant may approach Complaint Redressal Cell of National Housing Bank by lodging its complaints in Online mode at the link https://grids.nhbonline.org.in OR
in offline mode by post, in prescribed format available at link http://www.nhb.org.in/ GrievanceRedressal-System/LodgingComplaint-Against-HFCs-NHB%E2%80%
93Physical-Mode.pdf, to: Complaint Redressal Cell, Department of Regulation and Supervision,
National Housing Bank, 4 th Floor, Core 5A, India Habitat Centre, Lodhi Road, New Delhi – 110 003.
5.1 verify the details mentioned by him/her in the loan application by contacting him/her at his/her residence and/or on business telephone numbers and/or physically visiting his/her residence and/or business addresses either directly by SPHM or through agencies appointed for this purpose, if deemed necessary by SPHM.
5.2 inform the customer to co-operate if SPHM needs to investigate a transaction on the customer’s account and with the police/other investigative agencies, if SPHM needs to involve them.
5.3 advise the customer that if the customer acts fraudulently, s/he 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.
5.4 Display about its products and services in any one or more of the following languages: Hindi, English or the appropriate local language.
5.5 not discriminate on grounds of sex, caste and religion in the matter of lending. Further, SPHM shall also not discriminate visually impaired or physically challenged applicants on the ground of disability in extending products, services, facilities, etc. However, this does not preclude SPHM from instituting or participating in schemes framed for different sections of the society
5.6 process requests for transfer of a loan account, either from the borrower or from a bank/financial institution, in the normal course.
5.7 To purlicize the Code, SPHM shall:
a) provide existing and new customers with a copy of the Code:
b) make this Code available on request either over the counter or by electronic communication or
c) make available this Code at head office and branch offices and on its website; and
d) ensure that staff are trained to provide relevant information about the Code and to put the Code into practice
5.8 The Board of Directors of SPHM may provide for periodic review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management. A consolidated report of such reviews will be submitted to the Board of SPHM at regular intervals, as may be prescribed by it.