CIN: U51109WB1995PTC070852| NBFC CoR No.: B-05.05188| Reg. Office: Kolkata, West Bengal
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Disclosures  /  Fair Practices Code

Fair Practices Code

Our commitment to fair, transparent and ethical dealing with every borrower.

Fair Practices Code

Collocate Merchants Private Limited  |  CIN: U51109WB1995PTC070852  |  Version 1.0  |  Approved by the Board of Directors

1. Introduction

Collocate Merchants Private Limited (the “Company” or “Collocate”) is a Non-Banking Financial Company registered with the Reserve Bank of India (“RBI”). The Company is committed to following the guidelines laid down by the RBI to ensure fair business practices in its dealings with borrowers. This Fair Practices Code (the “Code” or “FPC”) has been framed and approved by the Board of Directors of the Company in line with the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023, as amended from time to time, and the RBI guidelines on Fair Practices Code for NBFCs.

The Company conducts its lending business, including through its digital lending partner LoanDidi, in a fair and transparent manner. This Code sets out the minimum fair-practice standards the Company follows and explains how it is expected to deal with borrowers on a day-to-day basis. The Company will adopt best business practices from time to time and make appropriate modifications to this Code as necessary.

2. Objectives of the Code

The primary objectives of this Code are to:

  1. promote good, fair and trustworthy practices in dealing with borrowers;
  2. increase transparency so that borrowers can better understand what they can reasonably expect of the Company’s services;
  3. encourage market discipline and higher operating standards through fair competition; and
  4. foster a fair and cordial relationship between borrowers and the Company.

3. Key Commitments and Declarations

The Company commits:

  1. to act honestly, fairly and reasonably, and to deal with borrowers on the ethical principles of integrity and transparency;
  2. not to discriminate against any borrower on the basis of gender, race, caste, religion or language, and to treat all borrowers consistently and fairly;
  3. to make this Code available on the Company’s website and at its registered office, and to put systems in place to ensure compliance; and
  4. to ensure transparency in the maintenance of books of account and in the disclosure of financial statements.

The Board of Directors and management are responsible for implementing this Code and for ensuring that the Company’s operations reflect its commitment to fair and equitable dealing.

4. Applications for Loans and Their Processing

  1. Communications to the borrower will be provided in a vernacular language or a language understood by the borrower, upon request.
  2. Loan documentation will contain the necessary information — including the rate of interest, processing charges, insurance charges (if any), penal charges and other charges that affect the borrower’s interest — so that the borrower can make a meaningful comparison with the terms offered by other lenders and take an informed decision. The loan application will indicate the documents required to be submitted.
  3. The Company will acknowledge receipt of loan applications and inform the borrower of any pendency of information or documents. A decision on a complete loan application will ordinarily be conveyed within a reasonable time, and in any case in accordance with applicable regulatory timelines.
  4. The borrower will be provided with contact details through which the status of the application may be ascertained.

5. Loan Appraisal and Terms / Conditions

  1. The Company will convey to the borrower, in writing through a sanction letter, the loan agreement, the Key Fact Statement (KFS) or otherwise, the annualised rate of interest, the Annual Percentage Rate (APR) and the method of application thereof, and will retain the borrower’s acceptance on record. Penal charges for delayed repayment will be stated prominently in the loan agreement.
  2. All contingent charges will be disclosed separately in the sanction letter.
  3. A copy of the loan agreement, together with copies of all enclosures, will be furnished to the borrower at the time of sanction or disbursement, in a vernacular language if so requested.
  4. The terms and conditions explained to the borrower include the manner and frequency of repayment, the loan amount and tenure, the rate of interest and APR, processing and other charges, and the responsibilities of any co-borrower or guarantor in the event of default.
  5. Due notice will be given for any change in the terms of the loan, including the rate of interest (applied prospectively), periodicity, quantum of instalments and tenure.

6. Disbursement of Loans, Including Changes in Terms and Conditions

  1. The Company will give notice of any change in the terms and conditions, including the disbursement schedule, interest rate, periodicity, service charges and foreclosure charges. Changes in interest rates and charges will be applied prospectively, and a suitable clause to this effect is incorporated in the loan agreement.
  2. Any decision to recall or accelerate payment will be in consonance with the loan agreement, and notice will be given to the borrower before such a decision.
  3. The Company will release all securities on repayment of all dues, subject to any legitimate right of set-off or lien for any other claim. Where such a right is exercised, the borrower will be given notice with full particulars of the remaining claims.
  4. The Company will clearly inform borrowers of the terms and conditions of the loan, the advantages of timely repayment and the consequences of default.

7. Recovery of Loans

  1. The Company will not resort to undue harassment in the recovery of dues — such as persistently contacting borrowers at odd hours or using muscle power — and will ensure that its staff and recovery agents are adequately trained to deal with borrowers appropriately.
  2. The Company will ordinarily contact borrowers only between 08:00 and 19:00 hours, save in special circumstances.
  3. While enforcing its rights as a lender, the Company will use civil and polite language and will refrain from abusive or harsh conduct.
  4. Where security is enforced, the process of valuation and realisation will be fair and transparent, with the aim only of recovering dues, costs and expenses.

8. Privacy and Confidentiality

The Company will treat the personal information of borrowers as private and confidential, even after the relationship has ended, and will not disclose such information except where required by law, where there is a duty to the public to disclose, where the Company’s interest so requires, or with the borrower’s consent. The Company may share loan and repayment information with credit information companies in accordance with regulatory directions. Disclosures and exchange of information will be limited to those authorised to receive it, with appropriate safeguards.

9. Grievance Redressal Mechanism

The Company has put in place a grievance redressal mechanism to ensure that disputes arising out of decisions of its functionaries are heard and disposed of at least at the next higher level. The name and contact details of the Grievance Redressal Officer are displayed on the Company’s website and at its registered office. The Company’s detailed Grievance Redressal Policy is available on its website. If a complaint is not resolved within 30 days, the borrower may escalate it to the RBI through the Complaint Management System portal at cms.rbi.org.in.

10. Regulation of Excessive Interest

  1. The Company has adopted an interest-rate model that takes into account the cost of funds, margin, risk premium and other relevant factors in determining the rate of interest. The rate of interest and the approach to risk gradation are disclosed in the application form and communicated explicitly in the sanction letter, and are also published on the Company’s website.
  2. Interest rates are annualised so that the borrower is aware of the exact rate applicable.
  3. Interest is charged from the date of actual disbursement of funds, and only for the period the loan is outstanding.
  4. The Company does not levy foreclosure charges or pre-payment penalties on floating-rate term loans sanctioned to individual borrowers. Penal charges are governed by the Company’s policy on the subject and applicable RBI directions on penal charges.

11. Loans to Persons with Disabilities

The Company does not discriminate while extending products and facilities, including loans, to physically or visually challenged applicants on grounds of disability, and renders all reasonable assistance to such persons in availing of its services.

12. General, Compliance and Review

  1. The Company will refrain from interfering in the affairs of the borrower except for the purposes provided in the terms of sanction, unless new, previously undisclosed information comes to its notice.
  2. Requests for transfer of a borrower account will be responded to within 21 days of receipt, on transparent contractual terms and in consonance with law.
  3. This Code will be made available in a vernacular language on request and displayed on the Company’s website and at its offices.
  4. In case of any conflict between this Code and applicable RBI guidelines, the RBI guidelines will prevail.
  5. The Board of Directors is authorised to review and approve modifications to this Code from time to time.
Disclaimer: Registration with the Reserve Bank of India, where applicable, does not imply that the RBI guarantees the correctness of any statement or representation made or opinion expressed by the company, nor for the repayment of any deposits/dues. This website is for general information about Collocate Merchants Private Limited.