FAIR PRACTICES CODE

Kerala Housing Finance Limited (KHFL) is a public limited company incorporated under Companies Act, 1956, and Regulated by the directives of National Housing Bank.
This Code has been formulated by KHFL (‘the Company’) pursuant to the Guidelines issued by the National Housing Bank on Fair Practices Code for Housing Finance Companies vide its circular bearing No.NHB (ND)/DRS/POL-No.16/2006 dated September 05, 2006 and amendments communicated by NHB from time to time, latest being circular dated 24/04/11.
The said Code is meant to promote good and fair practices, increase transparency, encourage market forces, promote fair and cordial relationship between the borrower/customer and the Company and to foster confidence of the customer in the Company.

Objective:
Our main business is extending loans for purchase / construction / extension / repairs / renovation etc. of residential houses, loans for purchase of land for construction of a house thereon and loans for business purposes.
The objective of the code is primarily to ensure fair and transparent transactions with all our customers. This will also facilitate the customers to have a better understanding about our products and the various charges levied by the Company. The following Fair Practices Code shall be followed by the Company.

I THE FAIR PRACTICES CODE (FPC) FOR LENDING
1) The Company will publish salient features of all loan products, interest rates for different categories of advances granted to individual borrowers, total fees and charges applicable on various types of loans. (Please refer Para II) in its website http://www.khfl.in
2) The Company would publish the Schedule of Charges, Rate of Interest on various loan products, prepayment charges by way of brochure, display on Notice Board and through website.
3) The Company would indicate the time frame within which loan applications containing full information/ details/documents will be disposed off.
4) The Company would verify the loan applications within a reasonable period of time. If additional details/documents are required; it would intimate the applicants/borrowers immediately thereafter.
5) The Company would ensure that there is proper assessment of credit applications submitted by the applicants /borrowers.
6) The Company would carry out proper due diligence on creditworthiness of applicants/ borrowers notwithstanding the stipulation of any security and margin made by it.
7) The Company would make proper assessment of the credit needs of the borrowers in order to take care that the credit limits which are sanctioned, meet the genuine requirement of such borrowers.
8) The Company would convey to the applicants/borrowers the terms and conditions of the sanctioned loan by issuing a sanction letter, a duplicate copy of which accepted and signed by them will be kept along with the loan documents.
9) As per the NHB guidelines issued by NHB, the Company would issue a copy of the Most Important Terms and Conditions (MITC) agreed and signed by the borrower and the Company.
10) As per NHB guidelines, the Company will display such additional information and MITC in the notice Board of the Company in the prescribed format and website of the Company from time to time.
11) The Company would ensure timely disbursement of loans sanctioned in conformity with the terms and conditions of sanction.
12) It is the borrower’s responsibility to register the correct postal address, E-mail ID, Telephone Number & Mobile Number and any other means of communication with the relevant branch of the Company and intimate any changes and get the same registered in the relevant branch. Proper acknowledgement of intimation of such changes shall be obtained from the branch by the borrower.
13) The Company will publish FPC/ MITC updated from time to time covering schedule of charges, changes in terms and conditions etc. in the Company’s official website www.khfl.in from time to time, besides displaying in the notice board of the branch.
14) The Company would promptly attend to any “lender-related’ genuine difficulty/ies that the borrowers may face. The Company will be concerned with sanction and disbursement of the loan, but will not offer any warranty for the property/ property related issues and the borrower should satisfy himself with the title of the property, quality of the construction, progress of the project etc.
15) The Company would release all securities on receiving payment of loan or realization of loans subject to any legitimate right or lien for any other claim the Company may have against Borrowers as guarantors/ co-applicant/co-owners. If such right of set off is to be exercised, the borrower would be given notice about the same with full particulars about the remaining claims and documents under which the Company is entitled to retain the security till the relevant claim is settled/ paid.
16) The Company will store loan papers/property documents at centralized locations in fireproof environment.
17) The Company will not discriminate on grounds of sex, caste and religion in the matter of lending.
18) If the borrower does not adhere to the repayment schedule agreed by the borrower/s, the Company shall follow normal recovery procedures like sending SMS alerts, telephone calls, emails, visiting the customers residence/ office, etc. and shall not resort to undue coercion or physical force.
19) The Company will have Complaints Redressal Mechanism, which is detailed in this FPC.
20) The customer should comply with the rules of Know Your Customer (KYC), Anti Money Laundering(AML), Customer Acceptance Policy, as published in our website from time to time.
21) The Company shall treat the information relating to customers as strictly confidential and shall not share any information, unless required under law or permitted by the customer.
22) The Company shall inform the guarantor/s if any, for the loan provided about quantum of liabilities as a guarantor and terms relating to the same including any changes thereof from time to time.
23) The Company and Customer shall act fairly and diligently in dealing with each other. If the customer acts fraudulently/ negligently and/or suppressers any information, he/she will be responsible for all the losses caused to the Company and liable for criminal/ legal action.
24) Generally, all the data/ documents pertaining to any account of the customer will be purged after 10 years from the closure of the loan/account and the Company will not entertain any request for providing any information/data of such accounts after 10 years.

II Available Loan Products:
As of now, KHFL has the following 5 loan schemes.
1) Home Loan
2) Home Extension Loan
3) Home Renovation Loan
4) Mortgage Loan
5) Personal Loan.

The features of all the above products are available on our website http://www.khfl.in

III. Complaint Redressal Mechanism:
If the customers have any grievances, they can make a complaint in writing or email addressed to the concerned Branch Manager, quoting the account number and gist of the complaint. In case the grievance is not resolved within 15 days, a copy of the complaint/email with acknowledgment may be forwarded to the Grievance Escalation address: General Manager, Kerala Housing Finance Limited, Registered & Head Office, 2nd Floor, Pan African Plaza, Near Pulimoodu Junction, M.G.Road, Trivandrum-695001. Complaints can also be forwarded to the email id, khflho@yahoo.com. In case of any complaint, customers can also contact the National Housing Bank at the following address and lodging a complaint in online mode at the link http://grids.nhbonline.org.in OR in offline mode by post, in prescribed format available at link
http://www.nhb.org.in/Grievance-Redressal-System/Lodging-Complaint-Against-HFCs-NHB%E2%80%93Physical-Mode.pdf, to Complaint Redressal Cell, Department of Regulation and Supervision, National Housing Bank, 4th Floor, Core 5-A, India Habitat Centre, New Delhi-110003. The complaint can also be e-mailed at crcell@nhb.org.in.
IV. Customer acceptance policy
1) As per the directions of National Housing Bank guidelines, KHFL would verify the identity of the customer with proper adherence to customer identification procedure, before accepting duly completed application form for issuing sanction letter to a loan borrowers. Also KHFL shall conduct due diligence appropriate to the risk profile of the client.
2) KHFL shall endeavor that no loan is availed in anonymous or fictitious/ benami name(s) and also endeavor that no account is opened for a customer who has a criminal background, terrorist and all other such persons prohibited by the statutory authorities.
3) As per the PMLA guidelines, the documentation requirements and other information are collected from different categories of customers depending on perceived risk and periodical intervals as may be specified by the NHB/FIUIND/Govt. of India.
4) No account will be opened or closed for a customer where we are unable to apply appropriate due diligence measures i.e. unable to verify identity and/or obtain documents required as per the risk categorization due to non-cooperation of the customer or non-reliability of the data/information furnished to us.
5) KHFL carries out due diligence while complying with customer acceptance policy and ensure that its implementation is not too restrictive and must not result in denial of our services to general public.
6) As explained by NHB in its circular dated April 10, 2006, KHFL exercises extra caution while dealing with politically exposed persons (PEPs). Politically exposed persons are individuals who are or have been entrusted with prominent public functions in a foreign country, e.g. Heads of States or of Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations, important political party officials, etc. KHFL shall gather all the necessary information available in the public while establishing the relationship with this category of people. . KHFL verify the identity of the person and seek information about the sources of funds before accepting the PEP as a customer. The decision to open an account for PEP should obtain senior management approval. The above norms may also be applied to the accounts of the family members or close relatives of PEPs.

V. Know Your Customer (KYC) Guidelines:
The customers shall submit or provide necessary documents or proofs viz., PAN details, proof of identity, address, educational qualification, employment etc. as and when called for by KHFL as per the KYC norms, either at the time of applying for the loan and also at any later stage before closure of the account.
All personal information of customers shall be treated as private and confidential [even when the customers are no longer customers], other than in the following exceptional cases:
a. If the information is to be given by law.
b. If there is a duty towards the public to reveal the information.
c. If our interests require us to give the information (for example, to prevent fraud).
d. If the customer permits or consents for revealing the information.
e. If the information is being given to Credit reference agencies
f. The information will be revealed to the credit reference agencies without the consent of the borrower if the customer has defaulted in repayment of installments. The copy of the information so revealed may be obtained on demand and payment of necessary fee.


VI. Loan Repayment
The repayment of the loan under all schemes shall be by way of Equated Monthly Installments (EMI) upto a period of 10 years depending on the scheme.
VII. Schedule of Charges:

1. Interest:
a. The rate of interest for all loan schemes will be decided from time to time.
b. At present, KHFL charges fixed interest rate for all loan schemes, i.e., the interest rate will remain the same throughout the tenure of a loan
c. The lending rate of KHFL is based upon factors including the cost of funds, market conditions etc.
d. Interest is charged on annual rest basis.
e. For NPA accounts, interest is chargeable as per Income Recognition & Asset Classification (IRAC) norms advised by NHB from time to time/ policy of the Company.
f. In respect of all loans, pre EMI interest (PEMII) at the contracted rate for the amount disbursed shall be remitted for the period from the disbursement date till commencement of EMI.

2. Penal Interest:
For delayed payment of EMI or PEMII, penal interest is charged @2% p.m. on the delayed amount for the delayed period.

3. Processing Charges (PC):
a. Processing Charges (PC) @ 2% of the amount of loan applied for shall be payable at the time of submission of the loan application.
b. In case the loan is not sanctioned, 0.5% shall be refundable.

4. Revalidation Charges:
Sanction is valid for 30 days from the date of delivery of the sanction communication to the applicant. Rs.500/- will be charged towards revalidation for all loans if applicant comes forward to revalidate the sanction after the due date.

5. Pre-closure charges:
No pre-closure charges are payable if the borrower closes the loan before completion of tenure using his own funds. Only if the loan is taken over by another financial institution, pre-closure charges @ 2% of the outstanding liability shall be payable.

6. All the charges stated above are subject to revision by the Company from time to time and such revisions will be published on the company’s website, http://www.khfl.in

7. The Company will bear the cost/charges for Property Valuation Reports, Income Tax Certificates and Statement of Accounts.

VIII. Other Aspects
1. The Insurance cover for life of the borrower/s, property mortgaged etc. is not mandatory. However, the company shall have the discretion to obtain life insurance cover, property insurance cover etc. from the approved Insurance Companies at the borrower’s cost, if found necessary. When insurance is taken, KHFL should be made beneficiary of the policy until the loan is cleared. The policy should be got renewed by the borrower from time to time and the same to be kept in the file.
2. The title deeds deposited by the borrower/s or guarantor/s for creation of mortgage will be returned to the said persons or their legal heirs only on closure of the entire loan liabilities of the borrowers /guarantors due under the loan/s availed directly or indirectly against the security of such properties.
3. It will be the responsibility of the customer to collect back the documents within 15 days of closure of the loan. If the documents are not taken delivery by borrower, then safe custody charges @Rs.200/-p.m. will be levied while delivering the documents
4. If the borrower requests for copies of any property documents during pendency of the loan, a minimum of 15 days notice should be given to the concerned branch for retrieval of the requested documents, by paying the actual courier charges +Rs.100.
5. The Company takes proper care and caution while dealing with the property documents submitted by the borrower. If for any reasons, the documents are lost or damaged for the reasons beyond the control of the Company and the Company is not able to produce such documents, the Company will arrange for providing certified copies of such documents as permissible under Law/ Policy of the Company.

IX Application of Fair Practices Code:
1. The Code is applicable under normal operating environment except in the event of any force majeure.
2. The code is based on the ethical principles of integrity and transparency and all actions and dealing shall follow the spirit of the Code.

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