Fair Practice Codes for Lenders

The Board of Directors of Surat National Co.op Bank Ltd in its meeting held on 31/07/2009 has unanimously resolved and adopted vide, the Board Resolution No. 16 the Fair practice Codes for Lenders of the Bank as under:

Reserve Bank of India has given the guidelines for Fair Practice Code for Lenders to be adopted by the banks as the lenders. Based on the guidelines, the Board of Directors hereby adopts the Fair Practice Code for Lenders as under:

[A] Loan Applications & their Processing:

  1. Loan Applications form shall be comprehensive for all categories [including priority sector advances up to Rs. 200000/- of borrowers. Additional information about the fees/charges , if any payable for processing shall be categorically inform to the applicant in advance.

  2. Head office and branches shall accept the loan application, enter into inward register and shall give an acknowledge for receipt of the loan applications.

  3. The loan application up to Rs. 200000/ should be processed within a period of a fortnight and to be sent to administrative office for placing such application before Loan Committee/Board. As far as possible the required additional details of documents should be called from the applicant immediately in one installment.

  4. In the case of small borrower seeking loans up to Rs. 200000/- the banks shall, if possible, convey in writing the main reason/reasons which, in the opinion of the bank after due consideration, have led to rejection of the loan application within stipulated time.

[B] Loan appraisal and terms/conditions.

  1. The bank shall endeavor to make proper assessment of the credit application by the borrower. Margin and Securities offered shall not be substitute for due diligence on credit worthiness of the borrower.

  2. The bank shall convey in writing to the borrower duly signed by an authorized officers the credit limit along with the term and conditions and other caveats governing credit facilities sanctioned by the bank. The borrower’s acceptance of these terms and conditions shall be obtained on the copy of the sanction letter.

  3. Terms and conditions and other caveats governing the credit facilities given by the bank shall be reduced in writing by the borrower , bank and other concern parties.

  4. A copy of the loan agreements along with the enclosure duly certified by the authorized officers of the bank may be furnished to the borrower free of costs.

  5. The Loan Agreement shall stipulate, inter alia, that the credit facilities are solely at the discretion of the bank. Bank may without prior notice approve or disapprove of facilities, such as drawing beyond sanction limits, honoring cheques issued for the purpose other than specifically agreed to in the credit sanction, and disallow drawing on a burrower account on its classification with the terms of sanction. The bank does not have any obligation to meet further requirements of the borrowers on account of growth in business etc. without proper review of credit limits.

[C] Disbursement of loans.

Disbursement of the sanctioned loan shall be done in conformity with the terms and conditions stipulated by the bank and after execution of necessary documents.

[D] Changes in Terms and Conditions.

  1. Bank shall give the sufficient public notice of any change in terms and conditions viz change in interest rate, service charges etc. Such public notice shall be displayed in the bank’s premises as per the RBI guidelines.

  2. Bank shall ensure that changes in the interest rate and charges are effected only prospectively.

[E] Post Disbursement follow up and supervision.

  1. In respect of loan up to Rs. 200000/- shall be constructive considering “lender- related” genuine difficulties of the borrowers.

  2. The Bank shall serve sufficient notice to the borrower as specified in the loan agreement before taking decision to recall the advance or to hasten repayment of bank’s loan.

  3. Bank shall release all securities on receiving repayment of the loan amount alongwith interests, penal interests, charges, costs, expenses, fees etc subject to any legitimate right or lien for any other claims against the borrower. Bank shall give proper notice about the right of set off or lien with full particulars about the claims.

[F] General.

  1. No discrimination on grounds of sex, caste and religion in the matter of lending.

  2. Except provided in the terms and conditions of loan documents, the bank shall not interfere in the personal affairs of the borrowers.

  3. Bank shall not resort undue harassment for the recovery of loans.

The Board of Directors shall undertake periodically review of the compliance of the Fair Practice Code.

These Fair Practice Codes shall come into effect immediately

For Surat National Co-op. Bank Ltd.


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