GUIDELINES ON FAIR PRACTICES CODE FOR NBFCS – GRIEVANCE REDRESSAL MECHANISM

Notification No.: RBI/2012-13/416

Date: 18th February, 2013

The Reserve Bank vide its circular dated March 26, 2012, issued revised guidelines on Fair Practices Code (FPC) for all NBFCs to be adopted by them while doing lending business. The guidelines were reviewed in view of the creation of a new category of NBFCs viz; NBFC-MFIs and also rapid growth in NBFCs’ lending against gold jewellery.

The guidelines require that the Board of Directors of NBFCs should lay down the appropriate grievance redressal mechanism within the organization to resolve disputes between the company and its customers and the mechanism should ensure that all disputes arising out of the decisions of lending institutions' functionaries are heard and disposed of at least at the next higher level.

At the operational level, all NBFCs are required to display prominently, for the benefit of their customers, at their branches / places where business is transacted, the details of the grievance redressal officer belonging to their company as also that of the local office of RBI

The revised guidelines are issued under Section 45 L of the Reserve Bank of India Act, 1934. The NBFCs may note to make suitable amendments in their existing FPC. The FPC so modified should be put in place by all NBFCs with the approval of their Boards within one month from the date of issue of this circular and should be published and disseminated on the web-site of the company, if any, for the information of the public.

Regards

CA. Mona Singhal

Partner

Arpit Gupta & Associates

Chartered Accountants

701, Nirmal Tower,

26, Barakhamba Road,

Connaught Place, 

Delhi-110001

Mobile No. +91-9873082769

Website: www.caaga.co.in