This document outlines the client protection guidelines adopted by BFL in line with the RBI FPC and SRO COC. It is imperative to follow these guidelines in letter and spirit and lack of compliance will be considered as wilful misbehaviour and misconduct are treating customer fairly is of utmost importance

The CPG of BFL states the following:

  1. Shall display the Client Protection Code in all branches and offices in English and the local language, in plain view.
  2. Shall endeavour to provide micro finance services to all eligible clients, as per RBI guidelines.
  3. Shall educate clients, staff, and any persons acting on their behalf on the Code of Conduct and its implementation.
  4. Shall disclose all terms and conditions to the client for all products/services offered, prior to disbursement, in accordance with the Reserve Bank of India’s (RBI) fair practices code through the following documents
    1. Individual sanction letter
    2. Loan card
    3. Loan schedule
  5. In addition, disclosure should be made through Group/Centre meetings for securing clients’ informed consent. (Details can be printed on a paper and all borrowers can sign on the same as acknowledgement of their acceptance).
  6. Shall communicate all the terms and conditions for all products/services in the official regional language or a language understood by clients.
  7. Shall disclose the following terms:
    1. Rate of interest on a reducing balance method
    2. Processing fee
    3. Any other charges or fees howsoever described
    4. Total charges recovered for insurance coverage and risks covered
  8. Shall communicate in writing, charges levied for all financial services rendered.
  9. Shall not collect fee on non-credit products/ services without prior declaration to the client.
  10. Shall declare all interest and fees payable as an all-inclusive APR and equivalent monthly rate.
  11. Shall follow RBI’s guidelines with respect to interest charges and security deposit.
  12. Shall obtain copies of relevant documents from clients, as per standard KYC norms. Additional documents sought must be reasonable and necessary for completing the transaction.
  13. Shall disclose reasons for rejection of loans to applicants.
  14. Shall indicate the time limit within which applicants/customers can expect a decision on their application and if sanctioned, the time taken for disbursement of loan.
  15. Shall not bundle products, except for credit life, life insurance & live-stock insurance products. The terms of insurance should be transparently conveyed to the customer and must comply with RBI & IRDA norms. Consent of the client must be taken in all cases
  16. Shall conduct proper due diligence to assess the need and repayment capacity of client before making a loan and must only make loans commensurate with the client’s ability to repay.
  17. Shall not be the 3rd lender to a client if the client has loans from 2 other lenders (irrespective of the source of loan).
  18. Shall not breach the total debt limit for any client, as prescribed by the RBI or Central/ State Government or SRO
  19. Shall ensure that all employees follow company guidelines for interaction with clients.
  20. Shall ensure that all staff and persons acting for the BFL or on behalf of the BFL:
    1. Use courteous language, maintain decorum, and are respectful of cultural sensitivities during all interaction with clients.
    2. DO NOT indulge in any behaviour that in any manner that would suggest any kind of threat or violence to clients.
    3. DO NOT contact clients at odd hours, as per the RBI guidelines for loan recovery agents.
    4. DO NOT visit clients at inappropriate occasions such as bereavement, sickness, etc., to collect dues.
  21. Shall provide a valid receipt (in whatever form decided by the BFL) for each and every payment received from the borrower and record the payment in the loan card with the client.
  22. Shall follow approved company procedure to deal with client default sensitively.
  23. Shall follow the debt restructuring mechanism adopted by the BFL for borrowers under liquidity stress.
  24. Shall keep personal client information strictly confidential.
  25. Shall disclose client information to a third party only under the following conditions:
    1. Client has been informed about such disclosure and permission has been obtained in writing.
    2. The party in question has been authorized by the client to obtain client information from the BFL.
    3. It is legally required to do so.
    4. This practice is customary amongst financial institutions and available for a close group on reciprocal basis (such as a credit bureau) provided that the i) clients’ prior consent has been obtained and ii) the receiver of such information is also bound by these conditions to keep the client information confidential.
  26. Shall follow board-approved process to raise clients’ awareness of the options, choices, and responsibilities vis-à-vis financial products and services available.
  27. Shall inform all new clients about the organization’s policies and procedures.
  28. Shall inform clients about the existence and purpose of feedback mechanisms and how to access them.
  29. Shall get an assessment of compliance with the code of conduct carried out by an agency approved by the SRO, once in every 12 to 18 months and place the assessment report in public domain