Introduction:
Reserve Bank of India (RBI) vide its circular Ref no. DNBS (PD) CC No.
80/03.10.042 / 2005-06 dated September 28, 2006 has advised all the non
banking financial companies to frame a fair practices code (“the Code”).
RBI has prescribed board guidelines on fair practices which includes processing
of application for loans, loan appraisal, disbursement of loans including changes
in terms and conditions and certain other conditions which NBFCs need to follow.
Background:
IDBI Gilts Ltd is a Primary Dealer registered with RBI as NBFC and being a
Primary Dealer, is registered with RBI under Section 45 IA of the Reserve Bank
of India Act, 1934 as a Non-banking financial institution not accepting public
deposits (NBFC – ND – SI) and is also a Company registered under the
Companies Act, 1956.
Applicability:
As per RBI guidelines applicable to the Primary Dealers, the Primary Dealers are
prohibited to lend. Accordingly, the provisions relating to processing of
application for loans, loan appraisal, disbursement of loans including changes in
terms and conditions as prescribed in the RBI guidelines on fair practices code
are therefore not applicable to the Company and hence the Company may be
exempted from the applicability of the said RBI circular.
However, as a good corporate Governance practice and to ensure transparency
and compliance with regulatory requirements the Company has put in place
appropriate grievance redressal mechanism within the organization to resolve
disputes of the clients of the Company. Such a mechanism ensures that all
disputes are heard and disposed of at the earliest.
The Company shall periodically review the functioning of the grievances
redressal mechanism at various levels of management.
