FAIR PRACTICES CODE

1. Preamble

1. The Reserve Bank of India (RBI) has vide its Master Direction - Non-Banking Financial Company –Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 dated 1 September, 2016 as amended from time to time (Master Directions) has directed every Non-Banking Financial Company to implement a fair practices code that are to be framed and approved by the board of directors of all non-banking financial companies (NBFCs) and should be published and disseminated on the website of the company, for the information of the public.

2. Clime Finance Private Limited (Company) being a non-systemically important non-deposit taking NBFC shall implement such a ‘Fair Practices Code’ in accordance with the Master Directions.

3. The Company is a private limited company incorporated under the provisions of the Companies Act, 2013 and shall operate as a non- systemically important, non- deposit taking NBFC.

2. Applications for loans and their processing:

1. The Company offers simple business loans to small and medium enterprises. Such businesses are fluent in English. All communications to the borrower shall be in the English language or a language as understood by the borrower.

2. Loan application forms would include necessary information which affects the interest of the borrower, so that a meaningful comparison with the terms and conditions offered by other NBFCs can be made and informed decision can be taken by the borrower. The loan application would indicate the documents required to be submitted with the application.

3. The Company would give acknowledgement for receipt of all loan applications. The time frame within which a loan application shall be generally disposed of shall be indicated in the acknowledgement. The Company would verify the loan applications within a reasonable period of time. If additional details / documents are required, it would intimate the customers.

4. Our affiliate Vert One Private Limited, a company incorporated under the provisions of Companies Act, 2013 is offering a Digital lending App for certain loans.

3. Loan appraisal and terms/conditions:

1. The Company would ensure that there is a proper assessment of credit application made by borrowers. The assessment would be in line with the Company's credit policies and procedures.

2. The Company shall convey in writing to the borrower in English language or any other language as understood by the borrower by means of a sanction letter, the amount of loan sanctioned along with the terms and conditions including annualized rate of interest and method of application thereof and keep the acceptance of these terms and conditions by the borrower on its record. The Company shall also communicate to the borrower if the loan is rejected. The Company should mention the penal interest charged for late repayment in the loan agreement.

3. The Company shall furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to the borrowers at the time of sanction / disbursement of loans.

4. Disbursement of loans including changes in terms and conditions:

1. The Company would ensure timely disbursement of loans sanctioned in conformity with the terms and conditions governing such sanction. The Company shall give notice to the Borrower in English or any other language as understood by the borrower of any change in the terms, including disbursement schedule, interest rates, service charges, prepayment charges etc.

2. The Company shall ensure that changes in interest rates and charges are affected only prospectively. A suitable condition in this regard should be incorporated in the loan agreement.

3. Decision to recall / accelerate payment or performance under the agreement should be in consonance with the loan agreement.

4. The Company shall release all securities on repayment of all dues or on realization of the outstanding amount of loan subject to any legitimate right or lien for any other claim the Company may have against the borrower. If such right of set off is to be exercised, the borrower shall be given notice about the same with full particulars about the remaining claims and the conditions under which the Company is entitled to retain the securities till the relevant claim is settled/paid.

5. General:

1. The Company shall refrain from interfering in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement (unless new information, not earlier disclosed by the borrower, has come to the notice of the Company).

2. In case of receipt of request from the borrower for transfer of the borrower’s loan account, the consent or otherwise i.e. objection of the Company, if any, shall be conveyed within 21 days from the date of receipt of request. Such transfer shall be as per transparent contractual terms in consonance with law.

3. In the matter of recovery of loans, the Company shall not resort to undue harassment viz; persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc. The Company’s staff shall be adequately trained to deal with customers in an appropriate manner. The contract/loan agreement with the borrower shall contain the repossession clauses in line with applicable RBI guidelines.

4. The Company shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned for purposes other than business to individual borrowers, with or without co- obligant(s).

6. Responsibility of the Board:

1. The board shall lay down the appropriate grievance redressal mechanism to ensure that the disputes arising out of the decisions of the Company’s functionaries would be disposed of at the next higher level.

2. In compliance with extant RBI guidelines, this grievance redressal mechanism includes the complaints received in respect of outsourcing arrangements also.

3. There will be a periodical review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management. A consolidated report of such reviews shall be submitted to the board at regular intervals.

7. Grievance Redressal Officer

1. The grievance redressal officer shall be the officer as per the Grievance Redressal Policy adopted by the Company and available at http://climefinance.com/doc/GrievanceRedressalPolicy.html
   2. If the complaint is not resolved or an adequate redressal for the complaint is not provided by the grievance redressal officer within 20 (twenty) working days, the customer/ complainant shall complain to the Complaints Redressal Officer, details of which are below:

   compliants@climefinance.com

   3. If the complaint / dispute is not redressed within a period of one month, the customer may appeal to the Officer-in-Charge of the Regional Office of Department of Non-Banking Supervision (DNBS), Reserve Bank of India, under whose jurisdiction the registered office of the Company falls.
   8. Posting on Website
   1. Fair Practices Code, in English language be put up on the website of the Company for the information of various stakeholders.
   9. Regulation of Excessive Interest rate charged:
   1. The Company shall follow the appropriate internal principles and procedures in determining interest rates and other charges in line with the approved policies from time to time.
   2. The Company shall follow the interest rate policy adopted and approved by the board and made available on the website and shall be updated from time to time. The rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers shall be disclosed in the application form (if any) and communicated explicitly in the sanction letter.
   3. The rate of interest shall be annualized rates so that the borrower is aware of the exact rates that would be charged to the account.