[Formerly known as Nambiar Finance and Leasing Pvt Ltd]
The company proposes to consistently adopt customer-friendly practices both, prior to disbursement of loan and during the loan tenure.
In instances where customers are unable to repay their installments, the field staff, in consultation with their superiors, is required to deal with the same on a case-to-case basis, including granting further time for repayment. The entire action plan & actual action is strictly proposed to be carried out within legal means & without any coercive action or illegal steps.
This note aims to pronounce the ‘Recovery Policy’ in writing to ensure that our response in such circumstances is uniform across the company. This policy is to guide the field staff, in those instances where clients are not in a position to pay their installments or default on pre-determined Easy Monthly Installments (EMI) on time.
The Company proposes to follow certain principles such as:
1. Credit discipline :-
The credit discipline among customers will be encouraged and strictly monitore
2. Empathy :-
The Company & its entire staff will empathize with the customers in case they have a genuine problem in repaying their loan installments. The concerned staff will try to understand the problem and thereafter take suitable steps in line with the unique situation of each customer
3. Flexible Support :-
In genuine cases of non-payment of loan amount, the company will facilitate reasonable flexibility of loan re-payment to customers. In extreme situations of long term or permanent impairment in the ability of a customers to continue with their re-payment, the ‘Recovery Committee’ will take an appropriate call to give suitable moratorium or to absorb part of the loan outstanding as a write off.
4. Proposed Approach :-
a. Field staff or senior management will first strive to understand the genuinity of the reason of non-payment of loan or if it is a case of willful default, and shall then accordingly arrive at a decision.
b. All genuine and beyond doubt cases of non-repayment of loans will be handled by the Recovery Committee, whereas, cases of willful defaulters, diversion of funds, etc. will be handled by the Recovery Team.
c. The issue of non-repayment of loan installments will be classified as a short-term issue or a long-term issue.
d. Any issue due to which a customer is temporarily unable to pay the loan installment for a period of up to three months or less, it will be considered as a short term issue.
e. Any issue due to which a customer is unable to pay the loan installment for more than three months will be treated as a long-term issue.
f. In case of a short-term issue, the customer will be counseled & repayment will be restructured as per revised cash flow estimates.
g. In case of a long-term issue, the ‘Recovery Committee or Recovery Team’ will take over the account for further follow up & action within all legal means.
h. Issues such as natural disasters (floods, fire, earthquake etc.) or demolition of house by the Government, death in family or death of key earning member, severe accident in family, chronic illness, etc., will be considered sympathetically & if necessary, timely plan to provide additional need- based assistance may be worked out by the Recovery Committee . The CDO / Branch Manager should file a report on the same day in a pre-defined format and submit it to the Credit Officer. The CDO/ Branch Manager may consult with the credit team to assess the damage due to the natural disaster or any loss due to any other reason beyond the capacity of the customer and to understand either short or long-term impact, depending on how long the customer will take to get back to the normal activity. Any extension of additional support/ restructuring, etc., will carry no additional interest. (However, causes like accident/ illness will apply only if the person affected is not expected to get back to normal earning capacity for a continuous period exceeding three months. Any illness or accident, preceding the date of loan disbursement, will not be considered for such benefits).
i. In case of willful default/ diversion, the recovery team may take over follow up for effective recovery, preferably with consistent follow up and positive dialogue without violation of any laws of the land or by coercion. Whenever necessary and possible, legal action may be initiated. The skills of the recovery team to enable recovery through perfectly legal means and persuasive powers are the most essential aspect of recovery in all such cases. In cases where there are absolutely no chances of recovery, a senior member of the Recovery Committee will conduct physical verification and, if satisfied, recommend a write-off of the loan.
Recovery Committee may also have the discretion to recommend waiver of a few installments/ a portion of the principal outstanding/ or the entire principal outstanding. Such waivers should be properly recorded and approved by the committee with majority. In the matter of recovery of loans, the company shall not resort to harassment viz. persistently bothering the borrowers at odd hours or use of any physical power for recovery of loans. Any personal visit to the borrower’s place of residence will usually be only between 7AM to 7 PM, unless the visit is with prior consent of the borrower. The Company shall ensure that its staff members are adequately trained to deal with customers in an appropriate manner. All complaints from the customers shall be attended to and resolved promptly.