Fair Practices Code

1. Introduction

Avid Capital Pvt Ltd (hereinafter referred to as "the Company") is committed to ensuring fair and transparent business practices in providing financial services to borrowers. This Fair Practices Code (FPC) is formulated as per the guidelines issued by the Reserve Bank of India (RBI) to promote transparency, fair dealing, and customer confidence in the financial system.

2. Key Principles of Fair Practices

2.1 Fair and Transparent Dealings

  • The Company shall act fairly and reasonably in all dealings with borrowers.
  • Transparency shall be maintained in loan terms, pricing, and charges.
  • Products and services shall be structured in a manner that meets the specific needs of borrowers.

2.2 Loan Applications and Processing

  • The loan application forms shall be simple and contain necessary details to help borrowers make informed decisions.
  • The expected processing time, documents required, and fees/charges shall be clearly stated in the loan application form.
  • Loan applications shall be processed in a time-bound manner, and any deficiencies in documentation shall be communicated to the applicant promptly.

2.3 Loan Appraisal and Terms & Conditions

  • The Company shall convey in writing (through a sanction letter) the details of the sanctioned loan, including:
  • Loan amount, tenure, interest rate (fixed/floating), fees, charges, and repayment schedule.
  • Any other terms & conditions, covenants, or security requirements applicable.
  • The borrower shall receive a copy of the loan agreement and sanction letter.

2.4 Disbursement of Loans & Changes in Terms

  • The disbursement of loans shall be made in accordance with the agreed terms & conditions.
  • Key Fact Statements as per RBI guidelines will be shared with borrower and required to obtain an acknowledgment from borrowers that they have understood the KFS, ensuring informed consent.
  • Any changes in the interest rate, fees, or other terms shall be communicated to the borrower in advance.
  • The credit facilities will be solely at the discretion of lenders. These may include approval or disallowance of facilities, such as, drawings beyond the sanctioned limits, honouring cheques issued for the purpose other than specifically agreed to in the credit sanction, and disallowing drawing on a borrower account on its classification as a non-performing asset or on account of non-compliance with the terms of sanction. It may also be specifically stated that the lender does not have an obligation to meet further requirements of the borrowers on account of growth in business etc. without proper review of credit limits.
  • In the case of lending under consortium arrangement, the borrower will be informed and will have to comply with the participating lenders procedures to complete appraisal of proposals in the time bound manner to the extent feasible, and the same be advised to the borrower/’s about their decisions on financing or otherwise within a reasonable time.

2.5 Post disbursement supervision

  • Post disbursement supervision by lenders will be constructive with a view to taking care of any" lender-related" genuine difficulty that the borrower may face.
  • Before taking a decision to recall / accelerate payment or performance under the agreement or seeking additional securities, lenders will give notice to borrowers, as specified in the loan agreement or a reasonable period, if no such condition exits in the loan agreement.
  • Lenders will release all securities on receiving payment of loan or realisation of loan subject to any legitimate right or lien for any other claim lenders may have against borrowers. If such right of set off is to be exercised, borrowers shall be given notice about the same with full particulars about the remaining claims and the documents under which lenders are entitled to retain the securities till the relevant claim is settled/paid.

3. Pricing, Interest Rates, and Charges

  • The Company shall ensure that interest rates and charges are reasonable, transparent, and not excessive.
  • Interest rates shall be determined based on risk assessment, cost of funds, and market conditions.
  • A clear interest rate policy shall be in place, and the methodology for computing interest rates shall be disclosed to borrowers.
  • No hidden charges shall be levied on the borrower.

4. Customer Communication and Grievance Redressal

Communication of Terms

  • All loan-related communications shall be in simple and understandable language.
  • Loan agreements shall be drafted in a clear and precise manner, explaining obligations and rights of both parties.
  • Grievance Redressal Mechanism
  • The Company shall have a robust Grievance Redressal Mechanism to resolve borrower complaints efficiently.
  • A Grievance Redressal Officer (GRO) shall be appointed, and the contact details shall be made available on the website and loan documents.

The following is the grievance escalation matrix:

Level Contact Point Contact Details Resolution Time Frame
Level 1 Customer Service Team customercare@avidcapital.in Within 7 Days
Level 2 Nodal Officer nodal.officer@avidcapital.in Within 15 days
Level 3 RBI Ombudsman RBI CMS portal: https://cms.rbi.org.in, Email: crpc@rbi.org.in As per RBI Norms

5. Collection & Recovery Practices

  • The Company shall follow ethical, non-coercive, and legally compliant collection practices.
  • Borrowers shall be treated with dignity and respect, and no harsh recovery measures shall be used.
  • Collection calls shall be made during reasonable hours and in compliance with RBI guidelines.

6. Confidentiality and Privacy

  • Borrowers' personal and financial information shall be kept confidential, except as required by law or agreed upon by the borrower.
  • No details shall be shared with third parties without explicit borrower consent, except for credit bureau reporting.

7. Compliance & Monitoring

  • The Company shall periodically review and update the Fair Practices Code to align with regulatory guidelines.
  • A compliance officer shall oversee the implementation and adherence to the FPC.
  • Employees shall be trained regularly on fair practices and ethical lending.

8. General

  • As lenders the company shal restrain from interference in the affairs of the borrowers except for what is provided in the terms and conditions of the loan sanction documents (unless new information, not earlier disclosed by the borrower, has come to the notice of the lender).
  • The company will not discriminate on grounds of sex, caste and religion in the matter of lending. However, this does not preclude lenders from participating in credit-linked schemes framed for weaker sections of the society.
  • In case of receipt of request for transfer of borrowal account, either from the borrower or from a bank/financial institution, which proposes to take- over the account, the consent or otherwise i.e, objection of the lender, if any, should be conveyed within 21 days from the date of receipt of request.

9. Force Majeure

The various commitments outlined and made are applicable under the normal operating environment. In the event of Force Majeure, Avid Capital Pvt Ltd. will not be able to fulfill the commitments under the FPC to the entire satisfaction of the client(s), the other stake holders, and the public in general.

10. Conclusion

Avid Capital Pvt Ltd is committed to implementing this Fair Practices Code in letter and spirit, ensuring fairness, transparency, and ethical business conduct in all financial dealings.

This Fair Practices Code shall be available on the website and at all branches for public access.

Note: In compliance with the guidelines on ‘Fair Practices Code’, the company shall publish and disseminate the Fair Practices Code in English on the web-site of the Company and any borrower, client or stakeholder who wishes to obtain the same in vernacular language may request the Company to provide a translation thereof.