Magnet Financial Services Private Limited

Magnet Financial Services Private Limited (“Magnet” or “the Company”) is a Non-Banking Financial Company registered with the Reserve Bank of India and governed by applicable RBI directions including:

Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023, as amended from time to time.

This Fair Practices Code (“Code”) is adopted pursuant to RBI requirements relating to Fair Practices Code for NBFCs and reflects the Company’s commitment to fairness, transparency, non-discrimination, and ethical conduct in all customer dealings.

This Code applies to all lending and related services offered by the Company.

I. Objective of the Code

The Company is engaged in extending loans and credit facilities to individuals and business customers for personal, business, and related lawful purposes.

The objective of this Code is to ensure:

Fair and transparent dealings with customers
Proper disclosure of product terms and charges
Responsible lending practices
Ethical recovery conduct
Customer awareness and protection
Consistency in service standards

The Code aims to:

Promote good and fair practices in customer relationships
Increase transparency in operations and pricing
Enable customers to understand products and obligations
Build confidence and trust
Foster a fair and cordial lender–customer relationship

II. Application of the Code

This Code applies to all products and services offered by the Company under normal operating conditions. It is based on ethical principles of integrity, fairness, and transparency and shall be followed in letter and spirit.

The Company commits that:

A. It shall act fairly and reasonably in all customer dealings.
B. It shall comply with all applicable laws and RBI regulations.
C. Products and services shall be explained clearly to customers.
D. Customer-facing materials shall be available in English and, where feasible, local languages.
E. Terms shall be clear and not misleading.
F. Branch / Relationship Officer shall be the first point of contact for queries.
G. Officers shall explain interest rates, charges, penal charges, and financial implications.
H. Customer information shall be treated as confidential unless disclosure is required by law or permitted by customer consent.

III. Advertising, Marketing and Sales

The Company shall ensure that all advertising and promotional material:

Is clear and factual
Is not misleading
Does not conceal key terms
Does not exaggerate benefits
Does not misrepresent costs

Sales staff and agents shall:

Identify themselves properly
Explain product features honestly
Avoid coercive selling
Avoid mis-selling

Where services are outsourced, the Company shall ensure that service providers maintain confidentiality and security standards equivalent to the Company.

IV. Loans — Fair Lending Practices

1. Loan Applications & Processing

Loan application forms shall include:

Key product features
Interest rate type and method
Fees and charges
Penal charges
Required documents list

Acknowledgment shall be issued for receipt of application.

Applications shall normally be processed within a reasonable period (typically within four weeks), subject to completeness and verification.

2. Loan Appraisal & Sanction

The Company shall:

Conduct proper credit appraisal
Assess repayment capacity
Perform due diligence
Use credit bureau and verification data

Customer data may be shared with credit bureaus and verification agencies as permitted by law.

Sanction communication shall include:

Loan amount
Annualized interest rate
Method of interest calculation
EMI structure
Tenure
Fees & charges
Penal charges
Prepayment terms

3. MITC & Loan Documents

The Company shall provide:

Most Important Terms & Conditions (MITC)
Loan agreement copy
Schedule of charges
Repayment schedule

Documents shall be provided at sanction/disbursement, preferably in vernacular language where required.

4. Rejection of Loan Applications

If a loan application is rejected, the Company shall communicate the rejection with reasons, unless restricted by regulatory or risk considerations.

5. Disbursement & Release of Security

Disbursement shall be made as per sanction terms and after compliance with conditions.

Upon full repayment:

Securities shall be released within a reasonable time
Title documents shall be returned
Any lien/set-off shall be disclosed with reasons

V. Collection & Recovery Practices

The Company follows a dignified, non-coercive recovery policy.

Collection principles:

Courtesy and respect
No harassment
No intimidation
No abusive language
No odd-hour contact
No physical coercion

Collection steps may include:

Reminder calls
Visits
SMS / letters
Written commitments
Legal notice
Loan recall

Legal action may be initiated where necessary.

Staff misconduct is punishable. Customers may complain through grievance channels.

VI. General Customer Protection Principles

The Company shall:

Communicate changes in loan terms prospectively.
Publish product features on website.
Publish interest rate policy and risk gradation approach.
Store property documents securely.
Not interfere in borrower affairs except per agreement.
Not discriminate based on gender, caste, religion.
Follow lawful recovery only.
Train staff in customer conduct.
Follow transparent transfer-of-loan requests (decision within 21 days).

VII. Grievance Redressal Mechanism

The Company maintains a Board-approved Grievance Redressal Policy.

Customers may complain through:

Customer Care: contact@magnetfinserv.com
Grievance Redressal Officer: grievanceofficer@magnetfinserv.com
Principal Nodal Officer: nodal@magnetfinserv.com
Phone Number: 022 69038383

Resolution timelines apply per grievance policy.

Unresolved complaints beyond 30 days may be escalated to RBI Ombudsman via:
https://cms.rbi.org.in

VIII. RBI Integrated Ombudsman Scheme

Customers may approach RBI Ombudsman if:

Complaint rejected
No reply within 30 days
Unsatisfied with response

Principal Nodal Officer represents the Company before RBI.

IX. Interest Rate & Computation Methodology

Interest rates are Board-approved
Risk-based pricing permitted
Rates disclosed in sanction letter
Method disclosed (e.g., Daily Diminishing Balance)
Compounding frequency disclosed
NPA interest per IRAC norms

X. Penal Charges (Regulatory Compliant)

Penal charges for delay shall:

Be reasonable
Not be capitalized
Not be added to principal
Be separately disclosed
Follow RBI penal charges framework