FAIR PRACTICE CODE

       

India Infrastructure Finance Company Limited
इण्डिया इन्फ्रास्ट्रक्चर फ़ाईनैन्स कम्पनी लिमिटेड
(A Govt. of India Enterprise)
Regd. Office : 8th Floor, Hindustan Times House, 18 & 20, Kasturba Gandhi Marg, New Delhi-110001 Phone : 91-11-23730270, 23708263-64 Fax : 91-11-23766256, 23730251
Website: www.iifcl.org
CIN : U67190DL2006GOI144520
 
FAIR PRACTICE CODE
India Infrastructure Finance Company Limited (IIFCL) was incorporated on January 5, 2006 under Companies Act, 1956 as a wholly Government owned Company. IIFCL is a dedicated infrastructure sector public financial institution and non- banking financial company purported to assume an apex role for financing and development of infrastructure projects in the country. The authorized capital of the Company is `5,000 crore of which, paid up capital, at present, and is `3,900 crore. Besides, the resource raising programme of the Company would have sovereign support, wherever required.
The Company presently renders financial assistance to infrastructure projects in line with the scheme for Financing Viable Infrastructure Projects through a Special Purpose Vehicle called India Infrastructure Finance Company Limited (SIFTI). Under the SIFTI the Company presently offers financial assistance through:
·         Direct lending to eligible projects
·         Take-out Finance Scheme
·         Subordinate Debt
·         Refinance to banks and FIs for loan with tenor of five years or more
·         Any other method approved by the Government of India
 
IIFCL has developed the Fair Practices Code (FPC) for its lending operations based on RBI guidelines, which intends to provide assurance to all the borrowers of the Company’s commitment to fair dealings and transparency in its businesses transactions. Commitments outlined in this Code are applicable under normal operating environment. The code will be applicable from the date it is placed on IIFCL’s web site. This code may not be construed as a legal document creating any rights and obligation on IIFCL. The fair Practice Code, as adopted herein below, is in conformity with the Guidelines on Fair Practice Code for NBFCs as contained in the Reserve Bank of India (RBI) Circular No. 2009-10/15 DNBS (PD) CC No. 153/03.10.042/2009-10 dated July 1, 2009 as amended upto date (Reserve Bank of India (RBI) Circular No. RBI/2015-16/16 DNBR (PD) CC No. 054/03.10.119/2015-16 dated July 1, 2015).
THE FAIR PRACTICE CODE DEVELOPED BY IIFCL APPLIES TO THE FOLLOWING AREAS:
1.       Applications for loans and their processing
2.      Loan sanction and terms/conditions
3.      Disbursement of loans including changes in Terms and Conditions
4.      Post disbursement supervision
5.      Other general provisions
6.      Complaint/Mechanism Redressal
7.      Periodic review
 
1.     APPLICATIONS FOR LOANS AND THEIR PROCESSING
 
Ø All communication made by IIFCL to its borrowers is made in language easily understood by all the borrowers.
 
Ø Loan applications shall include necessary information pertaining to the infrastructure project for which the loan is being sought. IIFCL shall ensure that the Lead Bank/Arranger/Syndicator/Borrowers are enabled to meaningfully understand the terms and conditions for taking an informed decision. The Lead Bank/Arranger/Syndicator/Borrowers shall be informed and the loan application shall indicate the documents required to be submitted along with the application.
 
Ø Receipt of completed applications will be duly acknowledged. The applications shall be subject to a preliminary screening by a New Business Committee for ‘in principle’ acceptance subject to detailed appraisal and final approval of the Board and the decision of the Committee shall be conveyed to the Lead Bank/Arranger/Syndicator/Borrowers within 15 days of the meeting of the Committee.
 
Ø Generally, applications for project financing will be disposed of within a time frame of 15 days from the date of clearance of the proposal by the Board.
 
Ø In case of rejection of loan application, irrespective of category of loans or threshold limits, the same would be conveyed in writing along with the main reason(s) which led to rejection of the loan application.
 
2.   LOAN SANCTION AND TERMS/CONDITIONS
      
Ø IIFCL shall convey in writing to the borrower by means of letter of intent or otherwise, the amount of loan approved along with the terms and conditions, including the annualized rate of interest and method of application thereof. Penal interest charged for late repayment will be mentioned in bold in the loan agreement. It would keep the acceptance of these terms and conditions by the borrower on the Company’s files.
 
Ø Appropriate internal principles and procedures for determining interest and other charges shall be laid down and be subject to review keeping the business exigencies, regulatory and customer sentiments, market practices, etc.
 
Ø Copy of loan documents, along with a copy of all relevant enclosures will be made available to the borrower at the time of disbursement of loans. Standard letter of intent would include instances of approval, disallowances, etc. IIFCL shall be under no legal obligation to consider increase/additional limits/facilities without proper review/assessment, compliance with its internal policies, compliance with SIFTI/Take-out finance scheme/Refinance Scheme and Final decision of consortium of lenders.
 
Ø The Company shall adopt an interest rate model taking into account relevant factors such as cost of funds, margin, risk premium & market competition and determine the rate of interest to be charged for loans and advances. The rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers shall be disclosed to the borrower or customer and communicated explicitly in the sanction letter. The rates of interest and the approach for gradation of risks shall also be made available on the web-site of the companies. The information published in the website or otherwise published should be updated whenever there is a change in the rates of interest.
 
3.   DISBURSEMENT OF LOANS INCLUDING CHANGES IN TERMS AND CONDITIONS
 
Ø Disbursement of loans sanctioned shall be made immediately after complying with all the directions, on receipt of lending confirmation notice from the lead bank, status of progress of the project and confirmation on the compliance of pre-disbursement conditions/conditions applicable at the time of respective LCN.
 
Ø All Disbursement of loans shall be made only through the borrower’s Escrow Account.
 
Ø Any change in terms and conditions based on the decisions in the meetings of the consortium of lenders, including interest rate and other charges/levies will be informed individually to the borrowers in case of account specific changes and in case of others by Public Notice / display on IIFCL’s website from time to time.
 
Ø Changes in interest rates and charges/levies will be effected retrospectively/prospectively depending upon the decisions taken in meetings of consortium of lenders in the presence of the borrower and the information received thereon. Suitable provision in this regard shall be incorporated in the loan agreement.
 
Ø Consequent upon such changes any supplemental deeds/documents or writings are required to be executed, the same shall also be advised. Further, availability of facility will be subject to execution of such deeds/documents or writings.
 
4.    POST DISBURSEMENT SUPERVISION
 
Ø Post disbursement supervision would be constructive with a view to taking care of any genuine difficulties that the borrower may face.
 
Ø Before taking a decision to recall/accelerate payment or performance under the agreement or seeking additional securities, IIFCL would give reasonable notice to the borrower as per the agreement.
 
Ø The Company shall release all securities pertaining to the loan on receipt of full and final payment of the loans subject to borrower satisfying any legitimate right/any other claim that IIFCL may have against the borrowers. If such right is to be exercised, borrowers would be given due and proper notice with requisite details.
 
5.    OTHER GENERAL PROVISIONS
 
Ø The Company shall refrain from interfering in the affairs of the borrower except for the purposes provided for in the terms and conditions of the loan agreement (unless new information not earlier disclosed by the Lead Bank / Syndicator/ Arranger/ Borrower, has come to the notice of the Company). However, this does not imply that IIFCL’s right of recovery and enforcement of security under Law as well as appointment of Nominee Directors, where required, is affected by this commitment.
 
Ø In case of receipt of request from the borrower for transfer of borrower account, the consent or otherwise i.e. objection of the Company, if any, shall be generally  conveyed to the Lead Bank/Syndicator/Arranger/Borrower within 21 days from the date of receipt of any request. Such transfer shall be as per transparent contractual terms in consonance with law.
 
Ø Company’s collection policy shall be built on courtesy, fair treatment and persuasion.
 
Ø In the matter of recovery of loans, the company shall not resort to any harassment-such as persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc.
 
Ø IIFCL will not discriminate on the grounds of gender, caste, religion or region in its lending policy and activity.
 
Ø The Company shall ensure that staff is adequately trained to deal with customers in appropriate manner.
 
6.   COMPLAINTS REDRESSAL MECHANISM
 
Ø To redress the grievances, applicants may write to the designated senior official whose contact particulars given below, clearly stating the nature of their grievances along with necessary documents, if any. A copy of the same will be returned to the applicants with dated acknowledged.
 
Ø The designated official will initiate necessary actions making all efforts to resolve the same expeditiously.
 
Contact particulars of the designated official.
 
Name and Designation   : Dr. S.S Garg, General Manager
Telephone Number          : 011-23442501
Mobile No                              : 9810534808
E-Mail Id                                :  ss.garg@iifcl.org
 
 
Ø If the complaint/dispute is not redressed within a period of one month, the customer may appeal to the Officer-in-Charge of the Reserve Bank of India, 6 Sansad Marg, New Delhi-110001.
 
Ø The Company would display Complaints Redressal Mechanism at its registered office/web-site.
 
7.    PERIODIC REVIEW
 
Ø The company shall put the above Fair Practice Code outlined hereinabove on its web site, for the information of various stakeholders, The Company would also review and refine the Code annually besides whenever any fresh guidelines, are issued by the RBI in this regard. The Company shall provide for periodical review of the compliance of Code and functioning of the grievances redressal mechanism. Any suggestions for better customer service are greatly valued by the company.
 
Ø A consolidated report of such reviews may be submitted to the Board at regular intervals.