Factoring Services in India | India Factoring & Finance Solutions

Fair Practice Code

The Reserve Bank of India has prescribed the broad guidelines on Fair Practices Code for all Non-Banking Finance Companies which sets the fair practices standards while dealing with their customers and to serve as a part of best corporate practice.

India Factoring and Finance Solutions Private Limited (referred to as the "India Factoring") has formulated this Fair Practices Code to lay down the following procedures / practices in dealing with the business transactions. It is, and shall be, our policy to make our products available to all qualified applicants. Our policy is to treat all the customers consistently and fairly. Our employees will offer assistance, encouragement and service in a fair, equitable and consistent manner.

This Fair Practices Code applies to the all categories of products and services offered by us (currently offered or which may be introduced at a future date)

The Fair Practices Code is applicable to the above irrespective of whether the same is provided at the Branch, over the phone, on the Internet or by any other method we may introduce at a future date.

• Applications for availing Factoring services and their processing

• All communications to the Borrower / Client will be in the vernacular language or a language as understood by the Borrower / Client.

• The Borrower / Client Application Form of India Factoring for availing of the loan / factoring limit by India Factoring's Borrower/ Client will include the complete information which may affect the interest of the Borrower/ Client, so that a meaningful comparison with the terms and conditions offered by other Non-Banking Financial Companies ('NBFCs') can be made and an informed decision can be taken by the Borrower/ Client.

• The Client Application Form of India Factoring (for availing of the factoring limit by India Factoring's Borrower/ Client) will also indicate the list of documents required to be submitted by the Borrower/ Client along with the Application Form.

• India Factoring ordinarily will have a mechanism of giving an acknowledgement for receipt of application from its Borrower / Client for availing Factoring/Trade Finance limit. Also, the said acknowledgement will contain the detailed time frame within which various activities right from making the Application by the Borrower/ Client till the disposal of the same (viz. (i) In-Principle offer by India Factoring to the Borrower / Client, (ii) Preparation and submission of Client field survey by India Factoring, (iii) pre sanction due diligence of Borrower /Client by India Factoring, and (iv) Remittance of Funds by India Factoring to the Borrower /Client) will be completed by India Factoring. India Factoring would inform the Borrower / Client about its decision within 15 days from the date of receipt of Survey Report and all other required information in full.

• Factoring Facility / Loan appraisal and terms / conditions

• India Factoring will convey in writing to the Borrower/ Client in the vernacular language or a language as understood by the Borrower / Client by way of a sanction letter, the amount of limit sanctioned along with all the terms and conditions thereof, including therein the annualized rate of discount/ interest and  penal interest (in bold) and method of application, and keep the acceptance of these terms and conditions by the Borrower/ Client  on India Factoring's record. India Factoring shall also communicate to the Borrower/ Client if the application for loan/ factoring facility is rejected.

• India Factoring will furnish a copy of the loan / factoring agreement along with a copy of each of all enclosures quoted in the loan / factoring agreement to all its Borrower/ Client at the time of sanction/disbursement of loan / factoring facility.

• Disbursement of Loan / Factoring Facility including changes in terms and conditions

• India Factoring will give Notice to all its Borrower/ Client in the vernacular language or a language as understood by the Borrower/ Client, of any change in the terms and conditions of the Factoring Facility, including disbursement schedule, interest/ discount rates, service charges, prepayment charges etc. India Factoring will also ensure that changes in discount/ interest rates and charges are affected only prospectively. Separate information in writing regarding the same would be sent to the Borrower/ Client. The Loan / Factoring Agreement shall contain necessary provisions to this effect.

• Decision to recall/ accelerate payment or performance under the Factoring Agreement will be in consonance with the agreed terms between the parties.

• India Factoring will release all securities of its Borrower/ Client only on repayment of all dues by such Borrower/ Client, or only on realization of the outstanding amount of the Borrower's/ Client’s availed limit, subject to any legitimate right or lien for any other claim which India Factoring may have against its Borrower/ Client. If such any right of set off is to be exercised, the Borrower / Client will be given notice about the same by India Factoring with full particulars about the remaining claims and conditions under which India Factoring will be entitled to retain the securities till the relevant claim is settled or paid by the Borrower/ Client.

• India Factoring has built in re-possession clause in the Factoring Agreement. The terms and conditions of the Factoring Agreement shall also contain the following provisions:

• Notice period before taking possession of security

• Definition of event of default

• Circumstances in which notice period can be waived.

• procedure for taking possession of the security

• provision regarding final chance to be given to the Borrower/ Client for repayment of loan / factoring facility before the sale/auction of the property

• the procedure for giving repossession to the Borrower/ Client and

• the procedure for sale/auction of the security.

• General

• India Factoring will not interfere in the affairs of its Borrower/ Client except for the purpose provided in the terms and conditions of the Factoring Agreement (unless new information, not earlier disclosed by the Borrower/ Client, which may come to the notice of India Factoring ).

• In case of receipt of request by India Factoring from the Borrower/ Client for transfer of Borrowal account, the consent or otherwise i.e. Objection of India Factoring, if any, will be conveyed to such Borrower / Client within 15 days from the date of receipt of the Borrower's/ Client’s request. Such transfer will be as per contractual terms in consonance with all the applicable laws.

• In the matter of recovery of outstanding dues of its Borrower/ Client, India Factoring's collection policy will be built on courtesy, fair treatment and persuasion. India Factoring will not resort to undue harassment viz. persistently bothering the Borrower/ Client at odd hours, use of muscle power for recovery of loan / factoring facility etc.

• India Factoring will take recourse / actions only through legally permissible remedies as per the terms and conditions of loan / factoring arrangement entered into with the Borrower/ Client.

• India Factoring shall ensure that its staffs are adequately trained to deal with the Client / Borrower in an appropriate manner.

Interest rate and other charges

• India Factoring has devised appropriate internal principles and procedures for determining interest rates and processing and other relevant charges.

• Interest cost and other relevant charges applied to the Borrower/ Client are based on internal credit rating done by the company.

• India Factoring has adopted an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium etc and determine the rate of interest to be charged for the Factoring Facility . The rate of interest and approach for gradation of risk and rationale for charging Interest rate are disclosed to the Borrower / Client in the application form and communicated explicitly in the sanction letter. The same is also available on the company’s website and is updated whenever there is a change in the relevant rate of interest.

• The rate of Interest quoted in the sanction letter, application form or in any document is on annualized basis.

Grievance Redressal Mechanism

• Grievances if any shall be addressed to the Grievance Redressal Officer (GRO)of the Company or by e-mail to cs@indiafactoring.in or vinod.chaube@indiafactoring.in

The Board will also periodically review the compliance of this Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management. A consolidated report of such reviews will be submitted to the Board at quarterly intervals.

• Information on The Fair Practices Code

Any enhancement(s) or change(s) in the scope of this code will be uploaded from time to time in future on   the India Factoring website.

• Review of Policy

The policy shall be subject to revision/ amendment in accordance with the Regulations issued from time to time by the Statutory Authorities or as     and when required.