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FAIR PRACTICE CODE
LIC Housing Finance Limited had adopted Board Approved Fair Practice Code in
October 2006; 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.
This Code has been modified pursuant to the Guidelines issued by the Reserve Bank of
India vide their Master Direction - Non-Banking Financial Companies – Housing Finance
Company (Reserve Bank) Directions , 2021. The revised Code will come into effect from
the date of review by the Board.
1. OBJECTIVES & APPLICATION
1.1 Objectives of the Code
This Code has been formulated by LIC Housing Finance Limited 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. 34/2010-11
dated October 11, 2010 as a part of best corporate practices. The Code has been
developed:-
a. To promote good & fair practices by setting reasonable Standards in dealing with
Customers;
b. To increase Transparency so that the Customers can have better understanding of
what they can reasonably expect of the Services;
c. To encourage Intermediaries, to achieve higher Operating Standards;
d. To promote a fair & cordial relationship between Customer & LICHFL; &
e. To foster confidence in Housing Finance System.
1.2 Application of the Code
The Code applies to all the Products & Services offered by LICHFL or subsidiaries by
any Method, & all Offices & all Employees of LICHFL or subsidiaries, including
Employees of LIC of India, who are working in LICHFL or its subsidiaries.
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2. We shall act fairly and in transparent manner
The Company shall act fairly & reasonably in all dealings with Customers
by ensuring that –
a. The Commitments & Standards prescribed in this Code are met for all Products,
Services, Procedures, & Practices.
b. Our Products & Services meet relevant Laws & Regulations in letter & spirit.
c. Our dealings with Customers rest on the Ethical Principles of Integrity &
Transparency.
3. ADVERTISING, MARKETING AND SALES
3.1 We shall
a. Ensure that all Advertising & Promotional Material is clear, & not misleading.
b. In any Advertising in any Media & Promotional Literature that draws attention to a
Service or product & includes a reference to an Interest Rate, we shall also
indicate whether other Fees & Charges will apply & that full details of the relevant
Terms & Conditions are available on request.
c. We shall provide Information on Interest Rates, Common Fees, & Charges
through Putting up Notices in all our Offices; Through Telephone or Helplines; On
the Company’s Website; through designated Staff / Helpdesk; or Providing Tariff
Schedule.
d. If we avail of the Services of Third Parties for providing Support Services,
we shall ensure that such Third Parties handle Customer’s Personal Information (if
any available to such Third Parties) with the same degree of Confidentiality
& Security as we would.
e. We may, from time to time, communicate to Customers various features of the
Products availed by them. Information about our other Products or Promotional
Offers in respect of Products / Services, may be conveyed to Customers only if he /
she has given his / her consent to receive such Information / Service either by Mail
or by registering for the same on the Website or on the Customer Service Number.
f. Prescribe a Code of Conduct for our Marketing intermediaries, whose Services are
availed to Market Products/ services which, amongst other matters, require them to
identify themselves when they approach the Customer for selling our Products.
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g. In the event of receipt of any Complaint from the Customer that our
Representative / Courier or DSA / HLA / CRA/ Agent has engaged in any
improper conduct or acted in violation of this Code, appropriate steps shall be
initiated to investigate & to handle the Complaint & to make good the loss.
4. LOANS / DEPOSITS
4.1 Applications for loans/ Deposits and their processing
We shall inform our customers of all necessary information through application forms /
brochures/ posters or during the course of meeting with the customers etc which affects
the interest of the Customer. We shall provide the indicative list of documents required
to be submitted along with the loan/ Deposit application form.
We shall follow the System of giving Acknowledgement for receipt of Loan
Application preferably along with time frame for disposal depending upon the level
of authority for sanction of loan.
Loan Appraisal / Deposit Processing and terms/conditions
a. Normally all particulars required for processing the Loan/ Deposit Application
shall be collected by us at the time of Application. In case we need any
Additional Information, the Customer will be informed accordingly.
b. We shall convey to the Customer the Loan Sanction along with the Terms &
Conditions thereof.
c. We shall furnish a copy of the loan agreement along with a copy each of all enclosures
quoted in the loan agreement to every borrower at the time of disbursement of loans,
against acknowledgement.
d. Once the Deposit is processed, the Fixed Deposit Receipt will be dispatched to the
depositor at their registered address.
Rate of Interest charged on Loans
a. We shall disclose the rate interest and the approach for gradation of risk and rationale
for charging different rate of interest to different categories of borrowers to the
borrower or customer in the application form and will communicate explicitly in the
sanction letter.
b. We shall clearly indicate the bifurcation between interest and principal in installments
collected from borrowers.
c. For loans under floating Rate of Interest, we shall provide as option to the borrowers
to switch over to a Fixed rate of Interest.
d. All applicable charges for switching of loans from floating rate of interest to fixed
rate of interest and any other service charges/administrative cost incidental to the
exercise of the above option shall be transparently disclosed in sanction letter and also
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at the time of revision of such charges/ costs from time to time through customer
portal.
e. We shall share / make accessible to the borrowers, through appropriate channels, a
statement at the end of each quarter, enumerating the principal and interest recovered
till date, EMI amount, number of EMIs left and annualized rate of interest for the
entire tenor of the loan. We shall ensure that the statements are simple and easily
understood by the borrower.
Communication of rejection of Loan Application
If we cannot provide the Loan to the Customer, we shall communicate in writing
the Reason (s) for Rejection (wherever possible).
Disbursement of Loans including changes in terms and conditions
Disbursement will be made in accordance with the disbursement schedule as per
loan agreement/ sanction letter.
Customers would be informed regarding changes to Terms & Conditions including
disbursement schedule, interest rates, penal charges, service charges, prepayment
charges, other applicable charges etc. Normally, changes shall be made with
Prospective Effect giving due Notice. If such change is to the disadvantage of the
Customer, he / she may within 60 days & without Notice close his / her Account or
switch it without having to pay any extra Charges or Interest.
Before taking a decision to recall / Accelerate Payment or Performance under
the Agreement or seeking Additional Securities, we shall give Notice to Borrowers
in consonance with the Loan Agreement.
We shall release all Securities on repayment of all Dues or on Realization of
the Outstanding Amount of Loan subject to any Legitimate Right or Lien for any other
Claim we may have against the Borrower. 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 & the Conditions under which we are entitled to retain the
Securities till the relevant Claim is settled / paid.
Release of Property Documents on Repayment/ Settlement of Loans
a. We shall return original title documents within 30 days from the date of receipt of
full repayment/ settlement of the loan amount (i.e., 30 days from the realization of
total dues for closure of loan in bank account of LIC HFL) along with satisfaction
of charges.
b. We shall hand over the documents to the customer either from the branch where the
loan account was serviced i.e., AREA OFFICE from where loan has originated, or
BACK OFFICE associated with the Area office where loan has originated.
c. We shall mention the timeline and place of return of original documents in the loan
sanction letter.
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d. We shall display the procedure for return of documents in the event of demise of the
single applicant or joint applicants on the website of the company.
e. We have a compensation framework in cases where delay in the return of documents
is attributed to the company.
f. We shall assist the borrower for obtaining certified copies of the original documents
within 60 days of closure of loan where the original documents are either lost/
damaged in part or in full.
Loans/ Deposits sourced over Digital Lending / Deposit raising Platforms
a. Names of the Digital lending/ Deposit raising platforms engaged as agents/ service
provider shall be disclosed on the website.
b. Digital lending/ Deposit raising platforms engaged as agents/ service provider shall
be directed to disclose upfront to the customer, the name of the HFC on whose behalf
they are interacting with him.
c. Immediately after sanction but before execution of the loan agreement, the sanction
letter shall be issued to the borrower on the letter head of the company.
d. A copy of the loan agreement along with a copy each of all enclosures quoted in the
loan agreement shall be furnished to all borrowers at the time of disbursement of
loans.
e. Effective oversight and monitoring shall be ensured over the digital lending
platforms engaged by the Company.
f. Adequate efforts shall be made towards creation of awareness about the grievance
redressal mechanism.
4.2 GUARANTORS
When a person is considering being a Guarantor for a Loan, he / she shall be informed
about:
a. His / her Liability as Guarantor.
b. The amount of Liability he / she will be committing him/herself to the Company.
c. Circumstances in which we will call on him / her to pay up his / her Liability.
d. Whether we have recourse to his / her other Monies in the Company if he / she fail to
pay up as a Guarantor.
e. Whether his / her Liabilities as a Guarantor are limited to a specific quantum or are
they unlimited.
f. Time & circumstances in which his / her Liabilities as a Guarantor will be
discharged as also the manner in which we will notify him / her about this. We
shall keep him / her informed of any material adverse change/s in the Financial
Position of the Borrower to whom he / she stands as a Guarantor.
g. In case the guarantor refuses to comply with the demand made by the creditor/
lender, despite having sufficient means to make payment of the dues, such
guarantor would also be treated as wilful defaulter.
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4.3 PRIVACY & CONFIDENTIALITY
All Personal Information of Customers shall be treated as Private and Confidential [even
when the Customers are no longer Customers] and shall be guided by the following
Principles & Policies. We shall not reveal Information or Data relating to Customer
Accounts, whether provided by the Customers or otherwise, to anyone, including other
Companies / Entities in our Group, 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) but
it should not be used as a reason for giving Information about Customer or
Customer’s Accounts [including Customer Name & Address] to anyone else,
including other Companies in the Group, for Marketing purposes.
d. If the Customer asks us to reveal the information, or with the Customer’s
Permission.
e. If we are asked to give a reference about a Customer, we shall obtain his /
her written permission before giving it.
f. The Customer shall be informed about the extent of his / her Rights under the existing
Legal Framework for accessing the Personal Records that we hold about him / her.
g. We shall not use Customer’s Personal Information for marketing purposes by
anyone including ourselves unless the Customer specifically authorizes us to do so.
4.4 CREDIT REFERENCE AGENCIES
a. Before the opening of loan account, we shall inform the Customers when we shall
pass his / her Account details to Credit Reference Agencies & the checks we shall
make with them.
b. We may give information to Credit Reference Agencies about the Personal Debts
the Customer owes us if:
i. The Customer has fallen behind with his / her Payments.
ii. The Amount owed is not in dispute.
iii. The Customer has not made proposals that we are satisfied with, for repaying his
/ her Debt, following our formal demand.
c. In these cases, we shall intimate the Customer in writing that we plan to give
Information about the Debts the Customer owes us to Credit Reference Agencies. At
the same time, we shall explain to the Customer the role of Credit Reference
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Agencies & the effect the Information they provide can have on Customer’s ability
to get Credit.
d. We may give Credit Reference Agencies other Information about the Customer’s
Account if the Customer has given us his / her Permission to do so.
e. A copy of the Information given to the Credit Reference Agencies shall be provided
by us to a Customer, if so demanded.
4.5 COLLECTION OF DUES
4.5.1 Whenever loans are given, we shall explain to the Customer the Repayment
Process by way of Amount, Tenure & Periodicity of Repayment. However, if the
Customer does not adhere to Repayment Schedule, a defined Process
in accordance with the Laws of the Land shall be followed for Recovery of Dues.
The Process will involve reminding the Customer by sending him / her Notice or
by making Personal Visits & / or taking Repossession of Security, if any.
4.5.2 Our Collection Policy is built on Courtesy, Fair Treatment & Persuasion.
We believe in fostering Customer confidence & long-term relationship. Our Staff
or any person authorized to represent us in Collection of Dues or / & taking
Security Repossession shall identify himself / herself & display the Authority
Letter issued by Office & upon request, display his / her Identity Card issued by
the Company or under Authority of the Company. We shall provide
Customers with all the information regarding Dues & shall endeavor to give
sufficient Notice for Payment of Dues.
4.5.3 All the members of the Staff or any person authorized to represent us in Collection
& / or Security Repossession should follow the Guidelines set out below:
a. Customer would be contacted ordinarily at the place of his / her choice & in the
absence of any specified place at the place of his / her Residence & if unavailable
at his / her Residence, at the place of Business / Occupation.
b. Identity & Authority to represent the Company shall be made known to the
Customer at the first instance.
c. Customer’s Privacy should be respected.
d. Interaction with the Customer shall be in a civil manner.
e. Our representatives shall contact the Customers between 08:00 hrs & 19:00
hrs, unless the special circumstances of the Customer’s Business or Occupation
require otherwise.
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f. Customer’s request to avoid Calls at a particular time or at a particular place shall
be honored, as far as possible.
g. Time & Number of Calls & Contents of Conversation would be documented.
h. All assistance should be given to resolve disputes or differences regarding dues in
a mutually acceptable & in an orderly manner.
i. During Visits to Customer’s place for Dues Collection, Decency & Decorum
shall be maintained.
j. Inappropriate occasions such as bereavement in the Family or such
other calamitous occasions should be avoided for making Calls / Visits to collect
Dues.
4.5.4 Penal charges in Loan accounts
Penal charges shall be imposed on borrowers for:
1. Failure to make scheduled payment on respective due date in accordance with
the terms and conditions outlined in the loan agreement.
2. Non-compliance of material terms and conditions of loan in accordance with the
terms and conditions outlined in the loan agreement/ Sanction letter/ MITC.
4.6 COMPLAINTS & GRIEVANCES
4.6.1 Internal Procedures
a. The Company shall make available facilities at each of its offices for the customers
to lodge and/or submit their complaints or grievances, if any.
b. The Company shall endeavour to address/respond to all complaints and grievances
within a reasonable time and keep the customers informed about the status of their
complaints. The Board of Directors will be provided with periodical review of the
compliance of the Fair Practices Code and the functioning of the grievances
redressal mechanism at various levels of management.
c. Customer will be told where to find details of our Procedure for handling
complaints fairly & quickly.
d. If the Customer wants to make a Complaint, he / she will be told:
1. How to do this?
2. Where a Complaint can be made?
3. How a Complaint should be made?
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4. When to expect a Reply?
5. Whom to approach for Redressal?
6. What to do if the Customer is not happy about the outcome?
7. Our Staff shall help the Customer with any questions the Customer has.
e. If a Complaint has been received in writing including those received on-line from
a Customer, we shall send him / her Acknowledgement / Response within a week.
If the Complaint is relayed over Phone at our designated Telephone Helpdesk or
Customer Service Number, the Customer shall be provided with a Complaint
Reference Number & be kept informed of the progress within a reasonable period
of time.
f. After examining the matter, we shall send the Customer our Final Response
or explain why it needs more time to respond & shall endeavour to do so within 6
weeks of receipt of a Complaint & he / she should be informed how to take his /
her Complaint further if he / she is still not satisfied.
g. We shall publicize our grievance redressal procedure and ensure that it
is specifically made available on our website.
5. General
We shall give the Customer information:-
Verify the details mentioned by him / her in the Loan Application by contacting him /
her at his / her Residence & / or on Business Telephone Numbers & / or
physically visiting his / her Residence & / or Business Addresses through staff or through
Agencies appointed for this purpose, if deemed necessary by us.
The Customer shall be informed to co-operate if we need to investigate a Transaction on
the Customer’s Account & with the Police / other Investigative Agencies, if we need to
involve them.
We shall advise the Customer that if the Customer acts fraudulently, he / she
will be responsible for all Losses on his / her Account & that if the Customer
acts without reasonable care & this causes Losses, the Customer may be held
responsible for the same.
Giving Customers information about our Products & Services in any of the
following Languages: Hindi, English or the appropriate local Language.
We shall not discriminate on the basis of Age, Race, Caste, Gender, Marital
Status, Religion, or Disability. However, the restrictions on Age, as mentioned in our
Loan Products, shall continue to apply. Each application shall be considered
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independently on merit, upon scrutiny of all the information, documents required
for verifying identity/ entity and the security to be offered, including guarantees.
We shall process requests for transfer of a loan account, either from the borrower or from
a bank / financial institution, in the normal course.
To publicize the Code we shall
a. provide existing & new Customers with a copy of the Code;
b. make this Code available on request either over the Counter or by Electronic
Communication or Mail;
c. make available this Code at each of our Offices & on our Website; &
d. ensure that our Staff is trained to provide relevant information about the Code & to
put the Code into practice
Our Board of Directors will be provided with periodical review of the compliance of the
Fair Practice Code and the functioning of the grievances redressal mechanism at various
levels of management. A consolidated report of each review will be submitted to
the Board at regular intervals, as may be prescribed by it.
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