Fair Practice Code

Grama Vidiyal Micro Finance Limited (referred to as the “Company”) has formulated this Fair Practices Code to lay down the following procedures/practices indealing with the business transactions.

(A) Member Admission

(a) The authorized staff of the Company shall give Compulsory Group Training to every potential member who has expressed her willingness to be a part of the program. In this training the member shall be made aware of the history of the institution, products, services, delivery mechanism and all other details of the program.
(b) The member shall be admitted into the program after verifying her credentials through a Group Recognition Test,
(c) The ‘Know Your Customer’ (KYC) documents like Ration card copy or Voter’s ID copy along with other documents like housing index, name, age, education, asset details, expense details and details of the family shall be collected.

(B) Applications for loans and their processing

(a) All communications to the borrower shall be in the vernacular language or a language as understood by the borrower.
(b) Loan application forms would 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 documents required to be submitted with the application form.
The details included in the loan application form include:
  • Date of application
  • Borrower and Guarantor details
  • Previous loan details
  • Current loan details – Loan amount requested, Repayment period, Purpose
  • Term and conditions of the Loan
  • Repayment particulars
  • Acceptance by the borrower’s family member
  • Acceptance of the group members
  • Right to Assign clause
(c) The company would devise a system of giving acknowledgement for receipt of all loan applications. Preferably, the time frame within which loan applications will be disposed of would also be indicated in the acknowledgement.

(C) Loan appraisal

a) Loan appraisal is done based on the following aspects of the borrower
Past repayment track record
Attendance to centre meeting
Current Household income and Repayment capacity
Purpose of the loan
Existing Loan details with the other MFIs and Govt. SHGs,
The group members should appraise and agree the loan amount and purpose of the Loan to be sanctioned to the borrower.
Accordingly the loan amount to be given shall be decided and sanctioned by the authorized staff of GVMFL.
The Sanctioned loan amount shall be written in the loan application form, signed by the authorities and maintained in the premises.
(b) We would convey in writing to the borrower preferably 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 our record. It is advised to invariably to furnish a copy of the loan agreement preferably in the vernacular language as understood by the borrower along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction / disbursement of loans and shall mention the penal interest charged for late repayment or prepayment in bold in the loan agreement.

(D) Disbursement of loans

(a) Authorized staff of GVMFL shall verify the Loan application along with all securities and approvals, which is applicable as per the applicable policy of the company which includes:
  • Demand promissory Note
  • Group acceptance
  • Family members’ acceptance
  • Acceptance of the terms and conditions by the borrower for interest rate, processing charges if any and repayment terms
  • Documentation for Hypothecation, charge creation or guarantee
(b) All the documents shall be maintained under the safe custody in the respective premises by the authorized persons. During loan disbursement, a loan pass book containing the Photograph of the member, Annualised interest rate, Weekly principle and interest dues, Loan repayment period, Loan utilization verification details, helpline number, etc., shall be handed over to the borrower.

(E) Changes in terms and conditions

a) We would give notice to the borrower in the vernacular language as understood by the borrower of any change in the terms and conditions including disbursement schedule, interest rates, service charges, prepayment charges etc ensure that changes in interest rates and charges are effected only prospectively. A suitable condition in this regard would be incorporated in the loan agreement.
(b) Decision to recall / accelerate payment or performance under the agreement would be in consonance with the loan agreement.
(c) We would release all securities if any, on repayment of all dues or on realisation of the outstanding amount of loan subject to any legitimate right or lien for any other claim the Company may have against borrower. If such right of set off is to be exercised, the borrower shall be given notice 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.

General

(a) The Company shall refrain from interference in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan Agreement, unless new information, not earlier disclosed by the borrower, has come to the notice of the Company.
(b) In case of receipt of request for transfer of borrowal account, either from the borrower or from a lender which proposes to takes over the account, the consent or otherwise i.e. objection of the Company shall be conveyed within 21 days from the date of receipt of request. Such transfer shall be as per transparent contractual terms in consonance with law.
(c ) The Company shall have the right to collect the outstanding loans or exercise any legitimate right over the borrower in normal course of business. However the company shall not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc. The Company shall ensure that the staffs are adequately trained to deal with the customers in an appropriate manner.
(d) Grievances, if any, in connection with this Code shall be addressed to

Head Operations,

Grama Vidiyal Microfinance Limited,
No.9, Paripoorna Towers, Manoranjitham Street,
Annamalai Nagar, Tiruchirapalli-620018,
by letter (or)
by helpline phone number : 93600 27000 (or)
by email to helpline@gvmfl.com
(e) The Board of Directors shall provide for periodical review of the compliance of the Fair Practices Code and the functioning of the grievances addressing mechanism at various levels of management. A consolidated report of such reviews may be submitted to the Board at regular intervals, as may be prescribed by it.