Fair Practice Code
1. Background:
Angel Fincap Private Limited (the “Company”) is a Base Layer Non-Banking Financial Company (NBFC) operating under the regulatory purview of the Reserve Bank of India (RBI). The company is classified as Investment and Credit Company.
The company being an Investment and Credit Company is engaged in Lending and investment activity. However, it is primarily engaged in providing Loan Against Shares to the retail clients (both individuals and corporates) and engages in investment activities in mutual funds, NCDs, etc. to manage its liquidity position.
This policy is prepared in line with the requirements prescribed by Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025 and various RBI notifications / directions [“RBI Regulations”] issued in this regard.
2. Objectives:
The objectives of this policy are as follows:
2.1. To establish principles for fair, transparent, and ethical dealings with customers across all operations of the Company.
2.2. To promote responsible lending practices and ensure that customers are empowered to make informed financial decisions.
2.3. To ensure that all communications, including loan terms and conditions, are clear, transparent, and shared in a language understood by the customer.
2.4. To build and maintain customer trust by providing accurate information, timely disclosures, and fair treatment throughout the customer relationship.
2.5. To put in place an effective grievance redressal system to address customer complaints promptly and fairly.
2.6. To adhere to regulatory guidelines issued by the Reserve Bank of India and maintain high standards of customer service and corporate ethics.
3. Scope:
The Fair Practices Code (FPC) covers all the products and services currently offered by the company, as well as those that may be introduced in the future. All employees and representatives are expected to follow this code diligently and uphold its principles in both actions and intent.
The commitments outlined in this code apply under normal circumstances. In exceptional cases, such as force majeure events, the company may not be able to fully adhere to these commitments. If there is any inconsistency between this policy and any executed agreements, the specific terms and conditions of the agreements will prevail to the extent they differ from the provisions of this code.
5. Key Commitments:
The company's Key Commitments are as under:
5.1. The company is to act fairly and reasonably in all the dealings by:
a. Meeting the commitments and standards in this Fair Practices Code for the financial products and services offered, and the procedures and practices followed
b. Ensuring that the Company's products and / or services are in compliance with the relevant laws and regulations
c. Making the Company's dealings rest on ethical principles of integrity and transparency
d. Providing professional, courteous and speedy services
e. Providing accurate and timely disclosure of terms and conditions, costs, rights and liabilities as regards financial transaction.
f. Not engaging in unlawful and/ or unethical practices
5.2. The company is to help understand how the financial products and/or services work by:
a. Ensuring that any advertising & promotional literature published is clear and is not misleading
b. Giving verbal information that is consistent with the literature shared
c. Explaining financial and legal implications of the transactions
5.3. The company is to deal quickly and sympathetically with the complaints / queries by way of:
a. Offering channels to route the complaints/ queries.
b. Correcting mistakes / errors expeditiously.
c. Assisting stakeholders to taking their complaints forward if they are not satisfied.
d. Reversing any changes that the company has applied erroneously, on an urgent basis.
5.4. The company is to disseminate accurate information to:
a. Allow the Customers to have clear information explaining the key features of the services and products
b. Inform the documents / necessary information the Company needs from them to establish true identity and address and, other documents to comply with legal and regulatory requirements.
c. Give an exact idea on how the selected product or service will be implemented on the company's end and what all compliances need to be done on the customer's end.
d. Provide details regarding the charges for any service or product, before the company provides that service or product.
5.5. The company is to have copies of this code available for customers on request.
6. Application for Loan and their processing:
6.1. The company shall ensure that all communications to the customer should be in the vernacular language or a language understood by the customer (including its application / website / physical letters).
6.2. Initial on-boarding page of app / Loan application forms must include necessary information to help customers make a meaningful comparison with offers from other NBFCs.
6.3. They must also ensure that the initial on-boarding page of application / loan application form must indicate the documents required for submission.
6.4. The company must have a system to acknowledge receipt of all loan applications.
6.5. The acknowledgment should ideally include the time frame within which the loan application will be processed.
7. Loan Appraisal Terms and Conditions:
7.1. Convey loan terms and conditions in writing to the customer in the vernacular language or a language understood by the customer through a sanction letter, Key Fact Statement (KFS), Agreement or other document on the application / email / physical documents / any other mode.
7.2. Include the loan amount sanctioned, annualized rate of interest, and the method of application of interest in the loan agreement / KFS.
7.3. The Company will obtain an acceptance from the customer on the Key Fact Statement / sanction letter whether physical or digital with the customer's signature under the caption "I/WE ACCEPT ALL THE TERMS AND CONDITIONS WHICH HAVE BEEN READ AND UNDERSTOOD BY ME/US." The company will maintain a digital / physical record of such acceptance.
7.4. Highlight penal charges for late repayment in bold in the loan agreement / Key Fact Statement / Sanction Letter to ensure clarity about charges.
7.5. The company shall provide a copy of the Sanction Letter, KFS, Loan agreement and any enclosures quoted in the agreement to the customer at the time of loan sanction/disbursement through the application (as downloads) / email / physical mode of delivery.
7.6. Ensure the customer understands the terms and conditions of the loan, and provide them sufficient time to review the agreement.
7.7. The company shall provide the KFS with all relevant details as prescribed by RBI to enable the customer to understand all Key terms and Conditions.
8. Disbursement of Loans (Including changes in Terms & Conditions):
8.1. Inform the customer about any changes in terms, such as interest rates, charges, or disbursement schedules, in a language they understand and through digital / physical mode as appropriate.
8.2. The company shall ensure that any changes in interest rates and charges are only applied to future transactions, not retroactively.
8.3. Incorporate a provision in the agreement stating that changes will be applied prospectively.
8.4. Any decision to recall or accelerate the loan must align with the terms specified in the loan agreement by the company.
8.5. The company shall release any securities once the loan is fully repaid, unless there are other outstanding claims in accordance with this policy. If securities are retained due to other claims, provide the customer with notice (digital / physical through appropriate mode) and details of the remaining claim.
9. General:
9.1. The Company shall strictly refrain from interference in the affairs of the customer except for the purposes provided in the Loan Agreement, unless any new information not earlier disclosed by the Customer has come to its notice and the same has not been intimated by the customer.
9.2. The Details of the recovery agents, if any, appointed shall be disclosed to the customer/prospective customer at the time of sanction of the facility. The Recovery agents shall adhere to Code of Conduct adopted by the company.
9.3. In the matter of recovery of loans, the Company shall strictly resort only to remedies which are legally and legitimately available to it and shall at no point in time resort to any form of undue harassment like bothering the customers at odd hours / use of muscle power for recovery of loans.
9.4. The Company shall ensure that the entire process of enforcing its security, valuation and realization thereof is fair and transparent.
9.5. The Company shall ensure that the staff is adequately trained to deal with the customers in an appropriate manner.
9.6. In case of receipt of a request from the customer for transfer of the borrowal account in writing or over the website/application, the consent or otherwise i.e. objection of the Company, if any, shall be conveyed within 21 days from the date of receipt of such request. Such transfer shall be as per transparent contractual terms in consonance with law.
9.7. The Company shall not charge interest rate beyond a certain level which may be seen as excessive or not sustainable or not conforming to normal financial practices.
10. Regulations on Rate of Interest:
10.1. The company shall establish a formalized policy framework for determining the rate of interest, including penal charges, subject to changes from time to time.
10.2. The Board of Directors shall approve the interest rate model, considering factors such as the cost of funds, margin, risk premium, and other relevant elements to determine the interest rates on loans, advances, and processing charges as laid down in its interest rate policy.
10.3. The company shall disclose the rate of interest, providing this information in the application form, sanction letter (physical or digital), and on the relevant website/application. Additionally, rationale for any risk-based gradation shall be highlighted in the website of the customer.
10.4. Any changes to the rates of interest shall be promptly updated on the company's website/application or any other published medium to ensure customers are informed of the latest rates.
10.5. The interest rate shall be communicated as an annualized rate, with a clear explanation of how it is applied, ensuring the customer fully understands the charges to be applied to their loan.
10.6. A periodic review of the Fair Practices Code compliance and grievance redressal mechanism shall be conducted by the company, and consolidated reports of these reviews shall be submitted to the Board of Directors regularly, especially when the company has lending exposures.
11. Penal Charges:
11.1. The company shall ensure that penalty if charged for non-compliance of material terms and conditions of loan contract by the customer shall be treated as 'penal charges' and shall not be levied in the form of 'penal interest' that is added to the rate of interest charged on the advances. There shall be no capitalisation of penal charges i.e., no further interest computed on such charges.
11.2. The company shall ensure that the quantum of penal charges shall be reasonable and commensurate with the non-compliance of material terms and conditions of loan contract without being discriminatory within a particular loan/product category.
11.3. The penal charges in case of loans sanctioned to 'individual customers, for purposes other than business', shall not be higher than the penal charges to non-individual customers for similar non-compliance of material terms and conditions.
11.4. The quantum and reason for penal charges shall be clearly disclosed by the Company to the customers in the loan agreement and most important terms & conditions/Key Fact Statement (KFS), in addition to being displayed on the website of the Company under Interest rates and Service Charges.
11.5. The company shall ensure that whenever reminders for non-compliance of material terms and conditions of loan are sent to customers, the penal charges shall be communicated. Further, any instance of levy of penal charges and the reason therefor shall also be communicated.
12. Key Fact Statements:
12.1. The company shall provide a KFS to all prospective customers to help them take an informed view before executing the loan contract, as per the standardised format given by the RBI.
12.2. The company shall ensure that the KFS shall be written in a language understood by such customers. Contents of KFS shall be explained to the customer and an acknowledgement shall be obtained that he/she has understood the same.
12.3. The KFS shall be provided with a unique proposal number and shall have a validity period of at least three working days for loans.
12.4. The KFS shall also include a computation sheet of annual percentage rate (APR), and the amortisation schedule of the loan over the loan tenor. APR will include all the charges which are levied by the company.
12.5. Charges recovered from the customers by the company on behalf of third-party service providers on actual basis, such as insurance charges, legal charges etc., shall also form part of the APR and shall be disclosed separately. In all cases wherever the charge is involved in recovering such charges, the receipts and related documents shall be provided to the customer for each payment, within a reasonable time.
12.6. Any fees, charges, etc. which are not mentioned in the KFS, cannot be charged by the company to the customer at any stage during the term of the loan, without explicit consent of the customer.
12.7. The KFS shall also be included as a summary box to be exhibited as part of the loan agreement.
13. Release of securities on repayment:
13.1. The Company shall release all securities and documents obtained from the customer upon full repayment of the loan amount, including any outstanding interest, charges, or dues.
13.2. Once the customer has cleared the entire liability, the Company will initiate and complete the release process within T+1 working days from the date of receipt of final payment or loan closure confirmation.
13.3. In case of Loan Against Shares (LAS) or Loan Against Mutual Funds (LAMF), the release process shall include the following steps:
• The Company shall inform the respective Depository Participant (NSDL/CDSL) or Registrar/Transfer Agent (for mutual funds) to initiate de-pledging or removal of lien on the securities held as collateral.
• The de-pledging request shall be raised only after verifying that the customer has repaid all outstanding dues and there are no pending claims or charges under the facility. The company shall issue "NOC / any other document" for evidencing repayment of loan.
• Once the depository or registrar confirms the successful removal of pledge/lien, the Company shall issue a digital / physical confirmation to the customer stating that the "securities are now free from encumbrance" through digital / physical means.
13.4. The Company shall not withhold or delay the release of securities beyond the period necessary for recovery of legitimate dues or compliance with regulatory requirements.
13.5. Any delay in de-pledging or technical issues arising with the depository or intermediary shall be promptly communicated to the customer along with the expected resolution timeline.
13.6. The Company shall maintain proper records of all de-pledging communications made to NSDL/CDSL or mutual fund registrars, along with customer acknowledgements for compliance and audit purposes.
13.7. Since, there is no movement of securities in company's demat, no place of return of original movable/immovable property documents shall be mentioned in the loan sanction letters. Time of Return have been duly stated in the process highlighted above.
13.8. To address the contingent event of demise of the sole customer or joint customers, the customer's legal heir/'s shall submit forms as available on website of the company along with legal documents to substantiate their claim.
13.9. The company shall ensure that in case of delay in releasing of original movable/immovable property documents or failing to file charge satisfaction form with relevant registry beyond 30 days after full repayment/ settlement of loan, the Company shall communicate to the customer reasons for such delay. In case where the delay is attributable to the Company, it shall compensate the customer at the rate of ₹5,000 for each day of delay.
14. Complaints and Redressal Mechanism:
14.1. Customer grievances shall be addressed and resolved duly as per the Grievance Redressal Policy adopted by the company.
15. Non-Discrimination:
15.1. The Company shall be strictly prohibited to engage in any form of discrimination towards the Company's existing as well as potential stakeholders (including customers) based on gender, race or religion etc. Any complaints for violation of the same are to be communicated immediately to the Grievance Redressal Officer of the Company, whose communication details have been stated below. Further, the customer is entitled to seek relief as stated below.
15.2. The company shall also not discriminate in extending products and facilities including loan facilities to physically/visually challenged applicants on grounds of disability.
16. Exception Handling:
16.1. The policy shall always be updated with extant regulatory provisions. However, in case of conflict between the Policy and regulations, the regulatory provisions shall always supersede the policy.
16.2. The updated policy shall be adhered at all the times and exceptions if any to the policy shall be approved by the board of directors after recording a reason in writing.
17. Adoption, Effective Date and Review:
17.1. This policy has been adopted vide resolution of the Board of Directors of the Company dated ______________. This policy shall be applicable organization wide with effect from _____________. This policy shall be reviewed by the Board of Directors on at least an Annual basis.