FAIR PRACTICE CODE
1. Applications for loans and their processing
Loan Applications shall contain all relevant information in respect of the loan. Loan Application shall be either in English or a vernacular language as understood by the Borrower.
Gold Loans shall be sanctioned after the verification of the following:
The borrower shall satisfy the company by providing necessary documents/information as prescribed by the Company to confirm that the gold ornaments being pledged by him is/are owned by him. The pledge form which forms part of the loan document shall have the following details:
A copy of the Pledge Form shall be provided to the Borrower.
3. Rate of Interest and Penal Interest
The loan sanctioned shall be charged at a specific rate of interest and the same shall be recorded in the pledge form. The annualized rate of Interest depends on the risk involved. The risk is valuated based on the following:
Penal interest charged for late repayment of the principal or interest or both will be mentioned in the loan agreement/pledge form.
4. Disbursement of loans including changes in terms and condition
The company shall send a Notice to the Borrower of any change in interest rate, charges and the terms and conditions. Such changes shall be effective prospectively.Decision to recall a loan will be in consonance with the loan agreement.
The company will release the securities on repayment of all dues. However, if any legitimate right or lien for any other claim of the Company exists against the Borrower then the same shall be detained. If the right of set off is exercised, the borrower shall be given notice about the same with full particulars about the remaining claims and the relative conditions enabling the company to detain the securities till the relevant claim is settled/ paid.
5. General
The Company will keep away from 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).
The Company shall respect the privacy of the Borrower and will ensure that he is not caused undue harassment; he is not disturbed at odd hours. Also it shall be ensured that muscle power is not used for recovery of loans
6. Policy guidelines on Auction of pledged Gold Ornaments
The Company has a separate policy termed as Auction Policy. This policy defines the procedure to be followed by the Company when the Gold ornaments pledged by the Borrower are not redeemed after the due date.
7. Misrepresentation
If, after the loan is granted, the Company comes to the conclusion that the borrower obtained the loan through misrepresentation of facts and has failed to repay the loan with interest on demand made by the Company, then the Company shall file a police complaint.
8. Assaying
Unless otherwise specified in the pledge form and other documents, the gold ornaments accepted by the company as security for the loan granted, will be of the purity of standard 22 ct.
9. Grievance Redressal Mechanism
Complaints received from the Borrowers against the Company or Branch Officials shall be attended to with immediate effect. The Authority in next higher level shall attend to the complaints received.
Borrowers are required to make a written complaint and submit the same at the Branch or to the ADM of the Branch.
Company Secretary,
Door No. 40/1166, Thadikaran Centre,
Palarivattom, Kochi-25
Ph: 0484 2341289, Mob:08138911334
Email: cs@agroindus.co.in
General Manager,
Reserve Bank of India,
Department of Non-Banking Supervision, Bakery Junction,
PB. No. 6507, Thiruvananthapuram-695003.
Tel No. 0471-2338818.
The Name, Address and contact details of the officers mentioned above are displayed at all Branches for information of the Borrowers.
10. This Fair Practices Code will be displayed in the Company’s Website.
DISCLAIMER
1. The information contained in this website is for general information purposes only. The information is provided by Agro Indus Credits Limited and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
2. In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
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AGRO INDUS CREDITS LIMITED AUCTION POLICY
(As amended by the Board of Directors on 20th April 2018)
I. INTRODUCTION
The Reserve Bank of India vide circular DNBS.CC.PD.No.266 / 03.10.01 / 2011-12 dated 26 March 2012 titled “Guidelines on Fair Practices Code for NBFCs” has advised NBFCs to put in place an Auction Policy duly approved by the Board of Directors. This Auction Policy will replace, in full, the existing auction policy and all instructions arising there from.
II. AUCTION PROCEDURES
The term “Auction” used in the policy shall mean realization of the security through Public Auction only.
The Company shall have a dedicated Auction Department at the Head Office (Auction Dept) to initiate, supervise and monitor the auction procedure including adherence to the approved policy. The Department will function under the overall control of DGM or any other competent Authority.
Auction in the Normal Course (after completion of tenure of the loan):
Auction process must be commenced in respect of all accounts on completion of the tenure of the loan on which interest due has not been serviced in FULL or where the account has not been settled.
The auction must be completed within 3 months of completion of the tenure of the loan. The management may postpone the same for administration reasons.
Discretionary powers to defer auction in accounts where atleast 75% of the interest due has been paid shall be vested with the CEO on the recommendations of the DGM or any other competent Authority.
An auction can be deferred at the request made by the customers on reasonable ground, Such proposals for deferment of auction submitted by AGM-GL/GLBH shall be recommended by DGM and approved by the CEO.
Selection and Approval of Auction Centres, Safe Custody, Security Arrangements
Auction Centre shall be finalized in line with the regulatory norms/ directions and internal guidelines of the company which shall be in compliance with RBI/statutory norms. Physical transfer of gold from various branches to the regional auction centres/offices shall be carried out in line with the regulatory/internal norms/directions which shall be subject to modification from time to time.
Authorisation for Auction of Gold
Once the accounts have been identified and listed for auction by the Auction Department the proposal, in a structured format, shall be put up to the CEOfor approval. The Gold Loan Department shall ensure that the list is accurate, complete and in compliance with the approved Auction Policy.
Mode and Periodicity for Sending Notices, Intimation to the Borrower
| Letter Type | Normal Gold |
| Intimation cum Auction Letter | A notice in the local language, alone or in local language along with English translation, in an approved format, shall be sent for all “Auctionable” pledges furnishing the date and venue of auction atleast 14 days before the proposed date of auction by registered post AD requesting the borrower to immediately pay the full dues failing which the security would be liable to be put on auction, without further notice, for recovery of the dues. Such letters should be originated from the branches where the gold loan has been sanctioned. |
i. CEO shall be empowered to approve modifications to the above guidelines for Auction from time to time on the recommendations of the DGM or any other competent authority keeping in view, interalia, the regulatory directives, legal position and the Fair Practice Code adopted by the Company.
Public notification of auction/advertisement etc and other related procedures shall be in line with the applicable rules, regulations and RBI guidelines issued from time to time.
Pledges taken up for Auction can be segregated into appropriate / convenient lots/ if necessary to facilitate disposal based on various parameters such as assessed purity, quantity of gold, expected participation of bidders, prevailing market prices etc. The proposal with recommendations for fixation of the reserve / floor price for each auction shall be done by the Head of the Auction taking into consideration the regulatory directions in place, recommended by the DGM or any other competent authority and approved by the CEO. In order that the auction attracts bidders and is successfully completed the reserve price may be fixed at about 5 % below the prevailing market price. The same may be lowered further forf Management approved cases
Proper and acceptable documents for identification of the participants in an auction should be obtained before permitting them into the auction hall. The usual documents taken for customer account KYC compliance is to be accepted.
A reasonable amount of EMD should be insisted upon from every participant on such date as maybe decided by the management from time to time.
The mode (cash or banking channels) of receipt of bid amount shall be decided by the management from time to time taking into consideration the market conditions and AML risks involved.
A minimum percentage of the bid amount as decided by the management from time to time including the EMD lying with the Auctioneer shall be insisted upon from the successful bidders on the date of the auction itself. Successful bidders should be given a letter in a pre-approved format along with the terms and conditions. The balance shall be payable within 5 working days from the date of auction. If the full amount is not received within the stipulated time, the bid shall be treated as cancelled and a penalty of 25% of bid amount or loss incurred by the company due to rate fluctuation whichever is higher shall be levied and intimated. Delivery of gold to successful bidders should be made only after confirmation of full receipt of payment or realization of cheque / draft along with taxes due. Proper acknowledgement by the bidder for receipt of gold, in a format duly approved, with the signature duly verified by an officer of the Company should be ensured. Loans to bidders against such auctioned gold shall be not permitted.
1. Auction Due to Depletion in Security Value (auction before completion of tenure of the loan):
Auction shall be conducted in the same Branch or Taluka in which the branch is located. Auction department shall regularly monitor the realizable value of gold and in any instance where the realizable value of gold is less than the actual value, such accounts shall be taken up for auction even before the completion of the tenure of the loan and in accordance with the directions laid down by the management from time to time.
CEO shall be empowered to approve modifications to the points mentioned in points C - Auction in normal course and point K 1- Auction due to depletion in value of security, from time to time on the recommendations of the DGM or any other competent authority keeping in view, interalia, the regulatory directives, legal position and the Fair Practice Code adopted by the Company. Such modifications shall be reported to the Board in the next meeting for information.
2. Auction of Gold Ornaments Identified as Spurious / Low Quality
3. Notice to borrowers identified in K (1) – Depletion in Security Value and K (2) –Spurious/Low Quality Gold.
| Letter Type | Depletion in Security Value | purious/Low Quality Identified at the branch or before completion of the tenure of the loan | Spurious/ Low Quality: Identified at the auction centre or after completion of the tenure of the loan |
| Intimation | A Notice in local Language /English should be sent to the borrower within 15 days of identification of loss in the account by registered AD calling upon the borrower to settle the loan within a maximum of 2 weeks from the date of receipt of such notice or replenish the security with additional gold failing which the Company may dispose the gold through auction without any further notice. | A Notice in local Language /English should be sent to the borrower within 15 days of identification of loss in the account by registered AD calling upon the borrower to settle the loan within a maximum of 2 weeks from the date of receipt of such notice or replenish the security with additional gold failing which the Company may dispose the gold through auction without any further notice. | A notice in local language/English should be sent to the borrower within 5 days of detection as spurious/low days of detection as quality by registered AD. The registered notice should clearly provide reference to the following details, inter alia: 1. Completion of tenure of the loan 2. That auction notice had already been sent after completion of the tenure of the loan. 3. That the company had undertaken only preliminarly verification of the gold at the time of disbursing the gold and as per the right conferred on the company as per the terms and conditions of the loan, to further check the purity/weight of the gold internally or by experts at any time, the purity of the gold was re verified at the auction centre prior to auction and was found to be of inferior quality. 4. That the Company is proceeding with auction was already intimated. |
| Final Letter | Nill | In the case where the account reins unsettled after the issue of the above notice an auction notice furnishing the date and venue of auction shall be served on the borrower atleast 14 days before the proposed date of auction. |
4. Re-auction of Gold Ornaments Not Successfully Auctioned (Normal Gold/Spurious or Low Quality Gold)
If the gold ornaments find no bidders at the reserve price the course of action as under should be adopted:
I. The Auction shall be conducted in the same branch or taluka in which the branch is located. The Auctioneer shall submit in writing that no bid was made at the reserve price fixed due to the poor quality of gold or difficulty in assessing the correct purity. This shall be certified by the Company’s official in charge of overseeing the Auction.
II. Such gold ornaments shall be taken up for melting, either in-house or through a reliable outside agency, in the same lots as taken up for auction. Auctioneer/ his representative shall remain present during the melting activity along with a competent Internal Auditor of the Company who will certify accordingly in a register to be maintained for the purpose.
III. vThe melted bars shall then be assayed for purity and put up for auction in such form with a fresh reserve price fixed.
IV. Compliance with the above steps shall be periodically subject to internal audit at intervals not exceeding 1 calendar quarter.
• Refund of Surplus, Recovery of Shortfall
Appropriate accounting entries should be put through in the customer loan accounts within 15 working days after the full receipt of auction proceeds. Surplus, if any, arising in individual accounts should be refunded to the customer within 30days from the date of auction or within such time as may be directed by the regulatory authorities from time to time, either through crossed account payee cheque or electronic transfer. However, a rightful lien on such surplus may be retained, subject to proper notice, in case the borrower has other unsettled liabilities to the Company. Legal action for recovery of shortfall in individual accounts may be considered where required and justified after a cost-benefit analysis is done and put up to the DGM for approval.
Customers whose pledges have been put to auction and where the company had suffered a loss the respective customer ids may be blocked based on the directions provided by the management from time to time.
• Panel of Auctioneers, Commission Rates, Role & Responsibility
In line with the FPC guidelines, Public Auction of the pledged security shall be carried out only through Auctioneers empanelled by the Company with the approval of the Board of Directors. A written agreement should be entered into with all the empanelled Auctioneers.
• Bidding for Gold by Company / Related Entities, Maintaining Arm’s Length Relationship
The Company or any of its related entities shall not participate in the Auctions. Further, there shall be an arm’s length relationship in all transactions during the auction including with group companies and related entities.
• Maintenance of registers / records
All registers and records mandatorily required under law and as per instructions issued by the Company shall be properly maintained and updated under the safe custody of a designated senior official and subject to periodical internal audit. Suitable instructions should be issued in this regard. Compliance shall be ensured by the Head of the Auction Dept.
Amendments
1. Policy drafted on 09/11/2015
2. Amended in the Board dated 20th April 2018. Policy has been redrafted.
