Regulatory

1. Preface
Hiranandani Financial Services Private Limited (“Company/ HFS”), in pursuance of the Master Directions issued by Reserve Bank of India on Scale Based Regulation, 2023 for Non-Banking Financial Companies (NBFCs), has adopted the following Code for fair practices while dealing with customers. The Code will facilitate the customers to take informed decisions in respect of the financial facilities and services to be availed by them and will apply to any loan that the Company may sanction and disburse.
The Fair Practices Code (“FPC”) is intended to cover the following areas:

• Applications for loans and their processing
• Loan appraisal and terms/conditions Disbursement of loans, including changes in terms and conditions
• Release of movable/ immovable property documents on repayment/ settlement of loans
• Reset of floating interest rate on Equated Monthly Instalments (EMI) based personal loans
• General provisions
• Grievance redressal mechanism
• Rate of Interest , and
• Penal and other Charges

2. Objective

• Promote good, fair and trustworthy practices by setting minimum standards in dealing with customers
• Increase transparency to enable the customers to have a better understanding of what they can reasonably expect of the services.
• Promote a fair and cordial relationship between the customers and the Company.

3. Applications for loans and their processing

• All relevant information pertaining to the loan/loan facility will be made available in the relevant loan application form(s) or through other modes (term sheet, Sanction letter, Key Fact Statement etc.). The loan application form will also indicate/contain the documents required to be submitted together with the duly completed application form and the timelines within which the application will be disposed of, subject to receipt of necessary documents.
• The customer  will have the option to receive all the correspondences, loan documents, recall notices etc. relating to loan in vernacular language or in a language as understood by the customer. For this purpose the customer  needs to indicate his/her/its preference in the loan application form by selecting the appropriate option.
• Receipt of completed application forms will be duly acknowledged within appropriate timeframe.

4. Loan appraisal and terms/conditions

• Loan applications shall be assessed in accordance with the Company’s credit appraisal process and policies. The customer shall be advised of the outcome of the credit appraisal (approval/rejection) within the period, for appraising the loan application indicated in the acknowledgment to loan application
• Upon approval of the loan, the Company shall convey the amount of loan sanctioned, annualized interest rate and other important terms and conditions to the customer by way of sanction letter or otherwise, in the language selected by the customer in the application form for correspondence, etc. The penal charges, if any, to be charged by the Company for late repayment, non-compliance of terms and conditions of loan contract, other covenants etc., shall be levied as per schedule of charges and to be mentioned in bold in the loan agreement, and the same shall be displayed on the website of the Company. An acceptance of such terms and conditions by customer shall be retained by the Company.
• The Company shall enter into an agreement indicating the amount of loan sanctioned, annualised rate of interest applicable, summary of key fact statement, schedule of charges along with the terms and conditions with the customer. A copy of the said agreement along with schedule(s) and annexure(s) to the agreement will be provided to the customer.
• When penal charges are levied for non-compliance with the material terms and conditions of sanctioned loan, it shall be in compliance with the guidelines issued by RBI from time to time.

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

• Any changes to the terms and conditions including interest rates, disbursement schedule, etc shall be informed individually to the borrowers in case of account specific changes, and in case of others changes, the same shall be made available at the Registered office / Corporate office or on website of the Company. Changes in the interest rates and charges shall be affected prospectively. A suitable condition to this effect is inserted in the loan agreement.
• Decision to recall / accelerate payment or performance under the agreement shall be in accordance with the terms and conditions of the loan documents executed by the borrower with the Company.
• All securities pertaining to the loan would be released on receipt of full and final payment of the loan(s), subject to any legitimate or contractual right or lien or right to set-off which the Company or any other person may have under the loan documents against the borrowers. 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 right to retain or setoff the securities/sale proceeds from the securities or right to transfer the securities or sale proceeds is exercised by the Company.

6. Applicant with Disability
The Company shall not discriminate in extending products and facilities including loan facilities to the physically / visually challenged applicants on the grounds of disability. They shall be treated at par with the other applicants and their application shall be dealt on merit as per the credit process and policy of the Company. All possible assistance will be provided to the applicants with the disability (ies) to enable them to understand, select and avail appropriate product or loan facility.

7. General Provisions

• The Company shall refrain from interference in the affairs of the borrower, except for the purposes and as provided in the terms and conditions of the loan documents or unless new information, not earlier disclosed by the borrower, has come to the notice of the Company.
• In case of receipt of request from the borrower for transfer of borrowal account, the consent or otherwise, i.e. objection of the Company, if any, shall be conveyed within
  21 days from the date of receipt of request.
• In the matter of recovery of loans, the Company shall not resort to undue harassment viz persistently bothering the borrower at odd hours, use of muscle power for recovery of loans and would operate within the legal framework.
• The Company shall not charge foreclosure charges/ pre-payment charges on any floating rate term loans sanctioned, for purposes other than business to individual borrowers with or without co-obligant(s). The foreclosure charges are to be applied as per the regulatory directions issued from time to time.

8. Grievance Redressal
The implementation of the Fair Practices Code shall be the responsibility of the Company. The Company shall make every effort to ensure that its dealing with borrowers / customers is smooth and hassle free. Any complaint brought to the notice of the Company by a borrower / customer will be handled expeditiously.

The Board of Directors of the Company has laid down the appropriate grievance redressal mechanism within the organization to resolve complaints and grievances. All disputes / complaints arising out of the decisions of the Company’s functionaries would be heard and disposed of at least at the next higher level after it is brought to their notice.

A consolidated report of periodical review with compliance with the Fair Practices Code and functioning of the grievance redressal mechanism at various levels of Management would be submitted to the Board of Directors (or a committee thereof) at regular intervals.

The contact details of the Grievance Redressal Officer (“GRO”) and the contact details of the Regional Office of Department of Non-Banking Supervision of RBI, under whose jurisdiction the registered office of Company falls,  which can be approached, if the complaint / dispute is not resolved within a period of one month will be displayed at all the branches / places where the Company conducts its business.

Detailed process of grievance redressal and escalation matrix forms part of Grievance Redressal Mechanism of the Company which is placed on the website and shall also be available at the branches.

9. Rate of Interest 

• The rate of interest is arrived after considering factors like cost of funds, margin and risk premium, etc.  To ensure that the customers are not charged excessive interest rate and charges the Company has adopted the “Interest Rate Policy” and same will be available on the website of the Company.
• The information published on the website or otherwise published will be updated, whenever there is a change in the rates of interest.
• The rate of interest would be annualized rates so that the borrower is aware of the exact rates that would be charged to the account.

10. Release of Movable / Immovable Property Documents

• Company shall release all the original movable / immovable property documents and remove charges registered with registry within a period of 30 days after full repayment/ settlement of the loan account.
• Company shall provide option to Borrower to collect property documents from Home Branch or any other branch where the documents are available as per Borrower’s preference
• The timeline and place of return of original movable/immovable property documents shall be mentioned in the loan sanction letters
• In order to address the contingent event of demise of the sole borrower or joint borrowers, Company has a well laid out procedure for return of original movable/immovable property documents to the legal heirs. Such procedure is displayed on the website of the Company along with other similar policies and procedures for customer information.
• In case of delay in releasing of original movable/immovable property documents or failing to file charge satisfaction form with relevant registry beyond 30 days after closure of full repayment/ settlement of loan, the Company shall communicate to the borrower reasons for such delay. In case where the delay is attributable to the NBFC, it shall compensate the borrower at rate of Rs 5000/- for each day of delay.
• In case of loss/damage to original movable/immovable property documents, either in part or in full, Company shall assist the borrower in obtaining duplicate/certified copies of the movable/immovable property documents and shall bear the associated costs. The compensation payable in such cases will be as per the extant regulations.

11. Review of Code
The Fair Practice Code shall be reviewed on an annual basis or as mandated by the regulatory requirement.

……XXX……

Regional language :
English | Hindi | Gujarati | Marathi | Telugu | Tamil | Kannada

In case of any grievance, customers can intimate and record their complaints / grievances for a resolution in the manner detailed below:

l. Registration of Complaints:

a. Branch – Customers can visit the nearest branch office for registration of their grievances in form of a written complaint;
b. Email: Customers can send their grievance through email at : wecare@hfs.in
c. Letters: Customer can write to Customer Service, Hiranandani Financial Services Private Limited, First Floor, 102, Tiffany Building, Hiranandani Estate, Ghodbunder Road, Thane West, Thane – 400607
d. Website: Customer can register their complaint through website under Customer Service tab.

• Customers shall ensure that they quote their application number or loan account number in every correspondence with the Company regarding their complaint.
• Anonymous complaints will not be addressed in terms of this Customer Grievance Redressal Mechanism.

ll. Resolution Process:

• On receipt of complaint, the Company shall, within reasonable time, send an acknowledgement of the same to the complainant. All the complaints received shall be recorded and subsequently the nature and mode of its resolution also will be tracked and updated.
• The officer shall ensure that closure of complaints in records is updated post resolution of complaint.
• The Grievance Redressal Officer shall conduct effective monitoring of the complaint status to ensure that the complaints are resolved within 30 days of receipt of complaint.
• Company shall update/rectify credit information within 21 days and in case the delay is attributable to the Company, Company shall compensate Customer as per extant guidelines
• If any case Company needs additional time, the Company will inform the customer the reasons of delay in resolution within the timelines specified above and provide expected time lines for resolution of the complaint.

III. Escalation Matrix

Regional language :
English | Hindi | Gujarati | Marathi | Telugu |Tamil | Kannada

The Reserve Bank – Integrated Ombudsman Scheme, 2021

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Salient Features of Ombudsman Scheme :

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Address and Area of Operation of Nodal Officers and RBI NBFC Ombudsman :

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Form of Complaint

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Complaint lodging portal of the Ombudsman: https://cms.rbi.org.in

1. Preface:
The Reserve Bank of India (RBI) vide its Notification No. DNBS. 204 / CGM (ASR)-2009 dated
2 January 2009, RBI/2023-24/53 DoR.MCS.REC.28/01.01.001/2023-24 dated August 18,
2023 and vide its Guidelines on Fair Practices Code for NBFCs, as amended from time to time
(RBI Regulations), has directed all NBFCs to make available the rates of interest and the
approach for gradation of risk on web-site of the companies.

In compliance with the requirements of the RBI Regulations mentioned above and the Fair
Practices Code adopted by the Company, the Hiranandani Financial Services Private Limited
(“Company/HFS”) has adopted this Interest Rate Policy broadly outlining the Interest Rate
Model and the Company’s approach to gradation of risks in its lending business.

2. Interest Rate Model:
The interest rate applicable to each loan account is assessed on a case specific basis, based on
evaluation of various factors detailed below:
a. Tenor of the Loan & Payment Terms – term of the loan; terms of payment of interest (viz
monthly, quarterly, yearly repayment); terms of repayment of principal; moratorium
period etc.

b. Internal and External Costs of Funds – the rate at which the funds necessary to provide
loan facilities to customers are sourced, normally referred to as our external cost of funds.
Internal cost of funds being the expected return on equity.

c. Internal cost loading – the costs of doing business. Factors such as the complexity of the
transaction, capital risk weightage, the size of the transaction, location of the borrower
and other factors that affect the costs associated with a particular transaction would be
taken into account before arriving at the final interest rate quoted to a customer.

d. Security – Any offering of security by the borrower would be considered while assigning
the risk premium for the particular loan account.

e. Credit Risk – as a matter of prudence, credit loss (risk) cost would be factored into all
transactions. The amount of credit risk cost applicable to a particular transaction depends
on the internal assessment of the credit strength of the customer.

f. Structuring Premium: A premium may be applied to a loan in case the loan has any
significant structuring elements with respect to collateral, or other aspects of transaction
structure.

g. Margin: A markup to reflect other costs / overheads to be charged to the loan and our
designed margin.

h. ALCO View & Market Dynamics: Views of the Asset Liability Management Committee
(ALCO) on product pricing with respect to prevailing interest rates for similar products /
services, market conditions and interest rate outlook shall be taken into consideration.

i. Other Factors – Matching tenor cost, market liquidity, RBI Policies on credit flow, offerings
by competition, stability in earnings and employment, subvention and subsidies available,
deviations permitted, further business opportunities, external ratings, industry trends,
repayment capacity of borrower, etc. Switchover options will also be relevant factors in
determining interest rate to be charged.

3. Approach for Gradation of Risk

The risk premium attached with a customer shall be assessed inter-alia based on the
following factors:

a) profile and market reputation of the borrower
b) inherent nature of the product, type / nature of facility, refinance avenues, loan to value
of asset financed,
c) tenure of relationship with the borrower group, past repayment track record and
historical performance of our similar clients,
d) group strength, overall customer yield, future potential, repayment capacity based on
cash flows and other financial commitments of the borrower, mode of payment
e) nature and value of primary and secondary collateral / security,
f) type of asset being financed, end use of the loan represented by the underlying asset,
g) interest, default risk in related business segment,
h) regulatory stipulations, if applicable,
i) possibility of changes in external benchmark rates.
j) any other factors that may be relevant in a particular case.

4. Rate of Interest:

a) Interest rates offered could be on fixed rate basis or floating rate basis.
b) In case of floating / variable interest rate, the interest rate will be linked to HFS
Benchmark rate “HFSRR”.
c) The Benchmark rate will be a rate approved by the Asset Liability Committee (ALCO) of
the Company, from time to time. The Benchmark rates will be reviewed periodically by
the ALCO considering the various external benchmark rates. The methodology for
calculating the HFSRR may be changed at any time with the approval of the ALCO.
d) The rate of interest for the same product and tenor availed during same period by
different customers need not be standardized. The final lending rate applicable to each
customer will be assessed based on various factors.
e) Presently, the Company is offering its products at the interest rates not exceeding thirty
percent.
f) Loan amount, Annualised Rate of Interest and tenure of loan will be communicated to the
borrower in the sanction letter and the apportionment of instalments towards interest
and principal dues shall be made available to the borrower.
g) Besides normal Interest, the Company may levy additional charges for adhoc facilities,
penal charges / default charges for any delay or default by the borrower in servicing of
the amounts due under the loan. The details of Penal charges for late repayment, schedule
of penal charges on non-compliances of loan terms and conditions will be mentioned in
bold in the loan agreement and will form part of schedule of charges.
h) Besides interest, other financial charges like processing charges, cheque bouncing
charges, pre-payment / foreclosure charges, part disbursement charges, cheque swaps,
cash handling charges, charges on various other services like issuing NO DUE certificates,
NOC, letters ceding charge on assets/ security, security swap & exchange charges etc.
would be levied by the company wherever considered necessary. In addition, the Goods
and Services Tax and other taxes, levies or cess would be collected at applicable rates from
time to time.
i) The rate of interest applicable to each customer is subject to change as the situation
warrants and is subject to the management’s perceived risk on a case to case basis.
j) The interest rates can change at any periodicity, depending upon change in market
benchmark rates, company’s cost of funds and other market conditions.
k) Intimation of change of interest or other charges would be communicated to customers
in a manner deemed fit, as per terms of the loan documents. Any revision in interest or
other charges would be with prospective effect.
l) The interest re-set period for floating rate lending would be decided by the Company from
time to time, applying the same decision criteria as considered for fixing of interest rates.
m) In the event of change in interest rate, the borrower shall be given an option to enhance
the equated monthly instalment or increase the tenor of the loan or a combination of both
and to prepay, in part or in full, the outstanding loan amount at any point of time
n) In case of staggered disbursements, the rates of interest would be subjected to review and
the same may vary according to the prevailing rate at the time of successive
disbursements or as may be decided by the Company.

5. Switchover of floating rate to fixed rate

At the time of reset of interest rates, Company may provide the option to the borrowers to
switch over from floating interest rate to fixed interest rate. The option to switchover shall be
available with the customer only once during the tenor of the loan.

The Company shall fix the new interest rate in accordance with this policy and further levy
switchover and other charges for the same.

6. Quantum of charges

While levying any charges in addition to the applicable interest, the Company shall ensure
that –

a) the charges are not capitalised;
b) the charges are reasonable and commensurate with the non-compliance;
c) charges are not discriminatory within a particular loan/product category;
d) charges for individual borrowers are not higher than charges for non-individual
borrowers; and
e) no additional component is added to the interest rate, etc.

The Company shall further ensure that the quantum and reason for such charges, as and when
levied, are communicated to the borrower.

7. Content on the website
Appropriate disclosure regarding this Interest Rate Policy shall be made on the Company
website.

8. Review
The Policy shall be reviewed every two years or as mandated by the regulatory requirement.

Regional language : English | Hindi | Marathi | Gujarati | Tamil | Telugu | Kannada

Present Benchmark Rate “HFSRR” is at 20.75%

• HFS – Policy on Restructuring of Advances
• Annual Return – Form No. MGT-7 – FY 2018-19
• Annual Return – Form No. MGT-7 – FY 2019-20
• Annual Return – Form No. MGT-7 – FY 2020-21
• Annual Return – Form No. MGT-7 – FY 2021-22
• Annual Return – Form No. MGT-7 – FY 2022-23
• Annual Return – Form No. MGT-7 – FY 2023-24
• Draft Letter of appointment of Independent Director (T&Cs)
• Disclosure on Liquidity Risk FY 2019-20 l FY 2020-21 l FY 2021-2022 l FY 2022-2023 l FY JUNE-2023 l FY SEP 2023 l FY DEC 2023 l FY Mar 2024 l FY June 2024 l FY Sept 2024 l FY Dec 2024
• List of Collection/Recovery Agencies

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