INTRODUCTION
Sampark Fin Services Pvt. Ltd. (SFS), an NBFC based in Odisha and Branch Offices in Bihar & Chhattisgarh follows the Code of Conduct (COC) adopted by Microfinance Institutions Network, MFIN for its members. The COC is designed to ensure that the NBFC follows the RBI guidelines and also few self-imposed guidelines to improve the quality of lending, transparency, self-discipline, coordination among MFIs & healthy competition, grievances redressal mechanism, anti-poaching activities, etc.
CODE OF CONDUCT
The list of the code of conduct as relevant to the branches is mentioned here below:
INTEGRITY AND ETICAL BEHAVIOUR
Sampark shall put strong systems and promote good governance practices within the organization
Sampark shall adhere to the Fair Practice Code, Client Protection Principle, and Code of Conduct
All the compliances shall be regularly audited and presented in the ‘Board’ meeting.
Sampark shall follow International Finance Corporation (IFC)’s Social and Environmental Policy while lending to any clients and shall enquire about their business and activities
Sampark shall design appropriate board approved policies and operating guidelines to treat clients and employees with fairness and dignity
The incentive structure for the staff shall aim at promoting good business and service practices towards customers
Through Group/Center meeting/Loan disbursement clients shall be educated on code of conduct and its adherence
Fair Practices with Borrowers:
Branch Officials should clearly convey to the borrowers by way of loan card, passbook or through Centre meeting the following terms of the loan:
All the important terms and conditions of the loan agreement
Rate of interest on declining balance method
Processing fee
Any other charges
Security or any other deposit
Systematic advance collections
Total charges recovered for insurance coverage and risks covered
Any other services rendered and charges for the same
AVOIDING OVER-INDEBTEDNESS
Branch Officials should clearly convey to the borrowers by way of loan card, passbook or through Centre meeting the following terms of the loan:
All the important terms and conditions of the loan agreement
Rate of interest on declining balance method
Processing fee
Any other charges
Security or any other deposit
Systematic advance collections
Total charges recovered for insurance coverage and risks covered
Any other services rendered and charges for the same
AVOIDING OVER-INDEBTEDNESS
Sampark shall adhere to the total debt limit, processing fee, interest and insurance premium as prescribed by the Reserve Bank of India (RBI).
Sampark shall take into consideration that the area is not overly penetrated while opening new branch.
Sampark shall use pin code analysis report from the credit bureau to understand the indebtedness of the clients of that area
Sampark shall share clients’ data with the credit bureaus such as Equifax and Crif Highmark to check their level of indebtedness prior to extension of loan. While making any credit decision, if a client has loans from three separate MFIs then Sampark shall not lend to that client. This shall be validated by credit bureau report prior to extension of loan
Sampark shall train branch staffs to make necessary enquiries with regard to existing debt of the borrowers and shall ensure the repayment capacity of the clients
Sampark shall also enquire about clients’ credit health from informal sources
Relationship officers (RO) shall do cash flow analysis while filling up loan application forms of the clients. Branch manager shall verify the details filled by Relationship Officer during Group Recognition Test (GRT).
Sampark shall enhance clients’ awareness on the adverse effects of over-indebtedness, through financial literacy program during the three days of Compulsory Group Training (CGT).
Sampark shall carry out test checks of efficacy of their processes relating to avoidance of over indebtedness through additional credit bureau check reports on select sample of clients after loan disbursements. The result of verification shall be reviewed by board periodically.
Recovery mechanism:
Though each MFI should ensure timely recovery of dues, it is imperative that the MFIs shall not use any abusive, violent, or unethical methods of collection and the recovery efforts should be in line with RBI guidelines issued from time to time
A valid receipt should be provided by MFI for each collection from the borrower
Multiple Lending & Lending Limits:
The maximum number of MFIs who can lend to one client is three, and the maximum loan outstanding from all the three MFIs together to a single client is restricted to Rs.80,000/- at any point of time.
This cap will cover only unsecured loans given within the joint liability group mechanism
Any secured loans or individual business loans will not be covered under this cap
Data Sharing /Incident Sharing:
Data to be shared to Credit Bureaus like CIBIL, Crif High Mark, Equifax and Experian in daily basis.
Sampark shall provide the data and information called for by all supervisory and regulatory bodies including MFIN, the SRO.
Recruitment:
The code covers all staffs, in particular, field staff up to the branch manager cadre.
As a matter of free and fair recruitment practice, there will be no restriction on hiring of staff from other MFIs by legitimate means in the public domain like general recruitment advertisements in local newspapers, web advertisements on site, walk-in interviews, etc.
Whenever we recruit from other MFIs, it is mandatory to seek a reference check from the previous employer
We will not recruit anybody from the other members without the relieving letter/no due certificate from the previous MFI employer
We will provide relieving letter / no due certificate to the outgoing employee in case s/he has given proper notice, handed over the charge and settled all the dues towards the organisation
Any staff member who is discovered to have lied about his background of working with any other MFI, will be asked to leave immediately
IMPLEMENTATION OF COC AT BRANCH LEVEL
All the field staff including the Branch Managers are advised to ensure the following:
All our borrowers should be provided with loan passbooks specifying the loan amount, rate of interest on a declining balance, insurance premium amount and other charges; and Equated monthly installment amount with a clear break up of principal and interest, etc. The full details of these are to be explained to our members individually and also in Center meetings in the language understood by them.
Our field staffs should not use coercive method and should not resort to undue harassment & unfair practices for recovery. We should contact our clients at their residence or place of work, for loan recovery, etc, only between 6 AM and 9 PM and avoid inappropriate occasions like a bereavement in the family, or any calamitous occasions.
The branches should not lend in the areas where other MFIs have the high default.
Wherever our field staff comes to know of the violation of the COC by any MFI they should bring it to the notice of Operations dept. HO through their Regional Manager.
All the field staffs are advised to strictly follow the MFIN COC.
Our Internal Audit team shall cover this area also for audit.
IMPLEMENTATION AT REGIONAL OFFICE/HEAD OFFICE LEVEL
The RMs are advised to monitor the implementation of the COC in their regions. Any incident reported to them by the field staff or AMs needs to be verified and the same be sent to HO with their views. The Operations Dept, HO will examine the same, and if required escalate to CCEC or Ombudsperson for further action.
Our HR department shall attend to the areas concerning Recruitment aspect of COC.
HO will arrange for supply of Posters on COC for display in branches.
MECHANISM FOR COMPLAINT RESOLUTION
Sampark shall have an efficient and accessible grievance redressal mechanism for clients.
Sampark shall act as per the ‘Grievance Redressal Policy’.
Appropriate mechanism for ensuring compliance with the Code of Conduct
Display toll-free number on loan card, on the website and at all the branches
Sampark shall have complaint registers and suggestion box available in all the branches for clients to register their grievances at the branch level
Contact numbers of Relationship officers and Branch managers will be provided to the clients, in case they have any complaint
Sampark will display an easy to read grievance redressal flow-charts in vernacular language at branches
Sampark shall provide training to the Relationship Officers to educate and improve client’s awareness on Grievance Redressal Mechanism.
Educate clients on different channels of grievance redressal system as well as escalation processes during the two to three days of Compulsory Group Training (CGT).
Sampark shall appoint ‘Grievance Redressal Officer’, a dedicated person in charge of attending to the calls received at the toll-free number and maintaining a grievance tracker.
The Grievance Redressal Officer shall respond to the grievances in prompt, efficient and courteous manner.
The Grievance Redressal Officer shall maintain a tracker of the grievances received on the toll-free number with utmost clarity and complete information.
Sampark shall have a clearly defined escalation matrix with a maximum Turnaround Time (TAT) of fifteen working days.
Grievances grave in nature shall be escalated further. The head of concerned departments shall be informed on this.
The summary of grievances shall also be shared presented to the board members at the quarterly ‘Board Meeting’.
Sampark shall display contact number of RBI’s NBFC Supervision at the branches.
Sampark shall display contact number and address of MFIN nodal official and details of the grievance redressal system of MFIN