Fair Practice Code

The objectives of the Fair Practice Code (FPC) include:

1.To provide clear and transparent information to the customers about the products, services and terms and conditions.

2.To encourage fair business practices, ensuring that customers are treated with respect and fairness.

3.To prohibit the use of undue influences, harassment or aggressive collection methods.

4.To enhance customer confidence in NBFC by providing reliable and trustworthy financial services.

5.To establish efficient mechanism for addressing and resolving customer grievances and complaints in time.

6.To provide customers with adequate information and guidance to make informed decisions about financial products and services.

7.To ensure that all activities and operations comply with applicable laws and regulations.

8.To safeguard customer data and ensure confidentiality and privacy.

The Fair Practice Code (FPC) will be applicable to all the offices of the Company including the Head/Registered Office located at Chennai (Tamil Nadu) and all the Offices and the Branches located across India. The FPC shall be binding on all the employees of the Company

a.Communication in Vernacular Language: The FPC mandates that all communications to the borrower shall be in the vernacular language or a language as understood by the borrower. This ensures that borrowers fully comprehend the terms and conditions of their loans which leads to transparency.

b.Information in Loan Application Forms: Loan application forms should include necessary information which affects the interest of the borrower, so that a meaningful comparison with the terms and conditions offered by other NBFCs can be made and informed decision can be taken by the borrower. The loan application form may indicate the list of all documents required to be submitted with the application form.

c.Acknowledgment of Loan Applications: NBFCs must establish a system of giving acknowledgment for receipt of all loan applications by indicating the expected timeframe for processing (Loan Processing Time). This promotes accountability and transparency in the application process.

a.Written Communication and Confirmation of Loan Terms / conditions: The NBFCs should 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.

b.Penal Interest for Late Repayment: The FPC requires NBFCs to prominently mention penal interest charged for late repayment of loan instalments in the loan agreement in bold letters. This transparency prevents borrowers from being caught off guard by additional charges.

a.Notice of Changes and effect of changes: The NBFCs should 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. and also to ensure that changes in interest rates and charges are affected with prospective effect only.

b.Recall/Acceleration of Payment: Any decision to recall (closure) or accelerate (increasing repayment amount) payment must be in consonance with the terms / conditions of the loan agreement in order to preventing arbitrary actions.

c.Release of Securities on closure / settlement: The company should release all securities on repayment of all dues (Closure of Account) or on realisation of the outstanding amount of loan subject to any legitimate right or lien for any other claim NBFCs may have against borrower (Settlement of Accounts).

In the case of settlement of account, the borrower shall be given notice about the same with full particulars about the remaining claims and the conditions under which NBFCs are entitled to retain the securities till the relevant claim is settled/ paid.

a.Non-Interference in the affairs of the borrower: NBFCs should 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). This clause safeguards borrowers from undue influence.

b.Time limit for reply to transfer of Borrowal Account: In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise i.e. objection of the NBFC, if any, should be conveyed within 21 days from the date of receipt of request, adhering to transparent contractual terms in consonance with law.

c.Responsible Loan Recovery Practices: For Recovery of loans, the NBFCs should not resort to undue harassment viz; persistently bothering the borrowers at odd hours, use muscle power for recovery of loans etc

NBFCs shall ensure that the staff are adequately trained to deal with the customers in an appropriate manner.

d.Foreclosure Charges / Pre-payment Penalty: NBFCs shall not charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers as measure of customer protection and uniformity.

a.Formation of FPC: The Board of Directors of Kannattu Fingold Finance Private Limited has laid down the appropriate grievance redressal mechanism within the organization as mentioned in Para-(vi). Such a mechanism ensures that all disputes arising out of the decisions of Kannattu Fingold Finance Private Limited functionaries are heard and disposed of at least at the next higher level.

b.Periodical review of FPC: The Board of Directors of Kannattu Fingold Finance Private Limited shall annually review of the compliance of the Fair Practices Code (FPC) and the functioning of the Grievance’s Redressal Mechanism (GRM) at various levels of management.

c.Compliance reporting on FPC: A consolidated report of such reviews / compliances may be submitted to the Board every year.

a.Policy: The Board of Directors of Kannattu Fingold Finance Private Limited has laid down a Grievance Redressal Mechanism (GRM) in compliance with various regulations applicable to the company (As per “Annexure-1 Grievance Redressal Mechanism (GRM)” attached herewith.

b.Register and Escalation of Grievance:

Level-1: If a customer is not satisfied with the response from customer care team (Where he / she register the complaint / query), the customer can escalate the matter to:

Name of the Grievances Redressal Officer : Mrs. Cuckoo Elsa Philip (Nodal Officer)

Office Address : No.7, Ground Floor, Karuneegar Street

Adambakkam, Chennai-600088

(Near St. Thomas Mount Railway Station)

Contact Number : +91 9962200232

Email : cuckoo@kannattu.com

grievances@kannattu.com

Level-2: A customer not satisfied with the response at Level-1 or the complaint is not resolved within 15 working days, can further escalate the matter / complaint / query to the below:

Name of the Director : Mrs. Allen Thomas Kannattu

Contact Number : +91 9946031111

Email : allen@kannattu.com

c.Appeal to RBI

If the complaint / dispute is not redressed within a period of one month, the customer may appeal to the Officer-in-Charge of the Regional Office of DNBS of RBI (Adress stated below), under whose jurisdiction the registered office of the company falls.

Officer-in-Charge : General Manager

Address : Reserve Bank of India, Fort Glacis, Chennai, Tamil Nadu-1

Contact Numbers : 044-25395964

Email Address : cms.nbfcochennai@rbl.org.in

d.Display of GRM

The company has displayed the Grievance Redressal Mechanism prominently in all Branch premises and Head Office / Corporate Office for the benefit of the customers by highlighting the grievance redressal mechanism followed by the company, together with details of the grievance redressal officer and of the Regional Office of the RBI.

a.Drafting and Approval of FPC: The company has been drafted FPC in English as well as regional and vernacular languages in accordance with the guidelines as stated by Reserve Bank of India and the same has been approved by the Board of Directors.

b.Disclosure of FPC: The Board approved FPC has placed in all branch premises and head office / corporate office. The company has published the FPC on the Website of the company for the information of stakeholders.

a.Interest Rate Model: The Board of Kannattu Fingold Finance Private Limited has adopted 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.Disclosure of Interest: The rate of interest and the approach for gradation of risks shall also be made available on the website of the company or published in the News Paper. The information published in the website or otherwise published shall be updated whenever there is a change in the rates of interest.

c.Annualised Rate of Interest: The rate of interest will be an annualised rate so that the borrower is aware of the exact rates that would be charged to the account.

a.Adequate steps to ensure that the KYC guidelines stipulated by the Reserve Bank are complied with and to ensure that adequate due diligence is carried out on the customer before extending any loan

b.Proper assaying procedure for the jewellery received. At the time of granting loans, the Company will assay the purity which is not to be considered as final. The company will re assess the purity in the event of Auditing and the pledged gold being auctioned and the purity as assessed at the time of Auction will be final.

c.Internal systems to satisfy ownership of the gold jewellery,

d.Adequate systems for storing the jewellery in safe custody, reviewing the systems on an on-going basis, training the staff concerned and periodic inspection by internal auditors to ensure that the procedures are strictly adhered to. Normally, such loans shall not be extended by branches that do not have appropriate facility for storage of the jewellery,

e.The jewellery accepted as collateral shall be appropriately insured,

f.Transparent auction procedure in case of non-repayment with adequate prior notice to the borrower. There shall be no conflict of interest and the auction process must ensure that there is arm’s length relationship in all transactions during the auction including with group companies and related entities,

g.The auction shall be announced to the public by issue of advertisements in at least two newspapers, one in vernacular and another in national daily newspaper,

h.As a policy, the Company themselves shall not participate in the auctions held,

i.Gold pledged shall be auctioned only through auctioneers approved by the Board,

j.The policy shall also cover systems and procedures to be put in place for dealing with fraud including separation of duties of mobilization, execution and approval.