Corporate governance

COMPOSITION OF THE BOARD

The Board has a strength of seven Directors. The Board comprises of Non- Executive Chairman, three Independent Directors (including Chairman), two nominee Directors, a Non- Executive Director and a Managing Director. The Non-Executive Chairman and Independent Directors bring strategic and independent judgment in the board's deliberation and decisions.

The Directors have wide experience in the field of Banking, Finance, Business Development, Taxation, Business Advisory, Audit and Risk Management.

The Composition of Board is as follows:

COMPOSITION OF VARIOUS BOARD COMMITTEES:

AUDIT COMMITTEE

NOMINATION AND REMUNERATION COMMITTEE

RISK MANAGEMENT COMMITTEE

IT STRATEGY COMMITTEE

CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

STAKEHOLDERS RELATIONSHIP COMMITTEE

CAPITAL RAISING COMMITTEE

COMMITTEE OF DIRECTORS (OPERATIONS)

INTEREST RATE POLICY

KYC AND AML POLICY

VIGIL MECHANISM

NOMINATION & REMUNERATION POLICY

POLICY AGAINST SEXUAL HARASSMENT

POLICY FOR PRESERVATION OF DOCUMENTS

CSR POLICY

ESG POLICY

INTERNAL GUIDELINES ON CORPORATE GOVERNANCE

COOKIES POLICY

ARCHIVAL POLICY

CODE OF CONDUCT

ENTERPRISE RISK MANAGEMENT POLICY

POLICY FOR DETERMINATION OF MATERIALITY

POLICY FOR EVALUATION OF PERFORMANCE OF BOARD OF DIRECTORS

POLICY FOR FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

POLICY TO PROMOTE DIVERSITY OF BOARD OF DIRECTORS

POLICY ON RELATED PARTY TRANSACTIONS

CHANGE IN FRR-  JULY, 2022

CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION

PRINCIPLES GUIDING INTEREST RATE DETERMINATION

Interest rate being charged is based on various factors like cost of funds, margin, risk premium, un-allocable expenses among other things. As far as risk premium is concerned, it will be based on variables like Profile, underlying security, tenure, other terms and conditions etc.

Asset Liability Committee (ALCO) has been authorised by Board for the purpose of laying out appropriate internal principles and procedures in determining interest rates and other charges. ALCO comprises of Head of the organization along with relevant head of the departments. ALCO has product pricing as one of the responsibilities among other things authorised by Board.

The Board of Directors of the Company or a Committee drawing power from the Board, while fixing interest rates shall be guided by this document on Interest Rate Determination. In addition to basic cost elements, the Board or the Committee shall be guided by the market conditions and various rules and regulations, if any, prescribed by the Reserve Bank of India or such other competent authority from time to time.

Interest charged for various products / Schemes shall have the following components:

1. Base Rate
2. Approach for Gradation of Risk/Risk Premium
3. Penalty Charges

1 Base Rate

3. Penalty Charges

• Base Rate represents the rate chargeable under every product / Scheme irrespective of the risk weight attached to the product / schemes or the type of scheme. Basic Interest shall be arrived at after considering the following aspects:

  1 Cost of Funds

  2 Overhead Cost

  3 Return on Capital Employed

  • This component represents the interest and other incidental charges payable by the Company for servicing the borrowed funds deployed by the Company. Major contributing factor to this component includes Interest on Bank Borrowings, interest on other financial instruments and other incidental charges thereto.
  • This represents the Employee cost to the Company and other operating & miscellaneous overheads.
  • After considering the above cost factors, the Board / committee shall take into consideration a fair return on capital employed which is to be generated by the management for servicing the owners' capital employed in the business.
  • Thus the basic interest rate for the gold loan schemes shall be determined by considering the cost of funds, overhead cost and fair return on capital employed.
• 2. Approach for Gradation of Risk/Risk Premium
• Risk Premium shall be determined by taking into account the degree of risk involved in loans under each product / scheme. While the rate shall be lower for the schemes where advance amount vis-Ã -vis security available is the lowest, it shall be increased for schemes offering higher advance amount for the same security. Further, irrespective of the product /scheme, the risk interest shall also be determined after taking into account the period of the loan as the incidence of risk goes up with the passage of time. Profile of the borrower will also affect premium being charged based on either his repayment capacity or his track record on previous loans with the company, other financial commitments, geography (location) of the borrower, end use of the loan as represented by the underlying asset etc. Such information is collated based on discussions with the borrower, reports from credit bureau wherever necessary etc. and field inspection by the Company officials.
• Loans outstanding for more than due date shall be charged penal interest in order to compensate for the opportunity cost of cash flows and also to discourage liability getting exceeded the realizable value of security.

Interest Rate Policy

1. TITLE, COMMENCEMENT & EXTENT

The Reserve Bank of India, vide circular dated November 15, 2021 advised the NBFC to appoint IO (IO). The Internal Ombudsman (IO) will be working as an independent authority to review complaints that are partly or wholly rejected by FEDFINA.(NBFC) Hereinafter referred to as the NBFC

2. OBJECTIVES OF THE SCHEME

a. To ensure that all complaints, which are rejected or partially accepted by Fedbank Financial Services Ltd (“Fedfina”), are examined by the IO so that escalation of grievances to RBI Ombudsman (BO) at RBI are minimized.

b. To enhance customer confidence in Fedfina grievance redressal system, thereby making it more transparent and acceptable without diluting the TAT.

c. To enable customer grievances to be considered by an independent authority, other than NBFC officials. The presence of IO at the apex level of Grievance Redressal Mechanism of the NBFC would help in establishing the neutrality the mechanism, as the grievance resolution would have to pass through an independent person before submission to the RBI Ombudsman.

3. ESCALATION OF GRIEVANCES TO IO

The grievance escalation matrix of the NBFC is as follows, where- in the customer can approach the NBFC officials from Level 1 to Level 3

       Level 1 (The first point for immediate redressal of grievance)

• Email: Customers can write to the NBFC at email Id “customercare@fedfina.com” for redressal of any grievance from their registered email ID.
• Letter: Customers can write a letter to the NBFC at - Fedbank Financial Services Limited, Kanakia Wall Street, A-Wing, 5th Floor, Unit No.501/502/511/512, Andheri – Kurla Road, Chakala, Andheri East, Mumbai, Maharashtra – 400093.
• Phone Call: Customer can call the NBFC customer care number 022-68520737 between 09.30 AM to 5:30 PM, Monday to Friday and also between 09:30 AM to 05:30 PM on the Last Saturday of each month, except public holidays.
• Branch Walk-in: Customers can visit NBFC branches and submit a letter with complaint details to the Branch Manager or any other branch official. The customer is advised to take an acknowledgment of receipt with date from the branch personnel to whom he/she is handing over the complaint letter.
• Complaints Register at Branch: Customer may record their complaint or concern in the branch complaint register.

        Level 2 – Nodal Officer

• If the customer is not satisfied with the resolution received through the above channels, or if the customer does not hear from the NBFC within 10 working days of receipt of his complaint at the NBFC, the customer may write to the NBFC Nodal Officer of their Zone with loan account number and complete complaint details provided in the earlier interaction.

       Level 3– Principal Nodal Officer

• If the customer is not satisfied with the resolution received or if the customer does not hear from the NBFC in 7 working days of receipt of his complaint made at level 2, the customer can write to Principal Nodal Officer at sougata.roy@fedfina.com/022-68520837  with loan account number and complete complaint details provided in earlier interaction.

       Level 4 – IO

• Customers shall not approach the IO directly. Fedfina will internally escalate all rejected/partially accepted grievances cases to IO for his consideration and final decision. The final communication to the complainant shall mention that the complaint has been examined by the IO and if he is still not satisfied, he can approach the RBI Ombudsman vested with jurisdiction over the area.

       Level 5- RBI Ombudsman

• In case the customer is not satisfied with the resolution received or if the customer does not hear from the NBFC in 30 working days, he/she may lodge their complaint on RBI CMS portal https://cms.rbi.org.in or write them on e-mail id - crpc@rbi.org.in or send complaint form (format available on the website under Ombudsman scheme 2021) to the below mentioned address:
  • Address: Centralised Receipt and Processing Centre, Reserve Bank of India, 4th Floor, Sector 17, Chandigarh – 160017

4. POWER, JURISDICTION AND REPORTING

   4.1 IO shall not handle complaints received directly from the customers or members public.

   4.2 The IO will deal only with the complaints that have already been examined by the NBFC’s Internal Grievance Redressal mechanism and which have remained partly or wholly unredressed.

   4.3 All cases, wherein Fedfina decides to reject the complaint or provides only partial relief to the complainant would be forwarded to IO for further examination and final decision. All such complaints will be escalated to IO within     three weeks of receipt of complaint, before conveying the final decision to the complainant within a period of 30 days, from the receipt of complaint except following:

• Complaints related to frauds, misappropriation etc., except in respect of deficiency of service, if any, on the part of the NBFC.
• Complaints / references relating to a) internal administration, b) human resources, c) pay and emoluments of staff
• References in the nature of suggestions, requests for concessions in rate of interest charged, rejection of loan proposals, modifications in sanction terms and conditions, enhancement in credit limit, waiver / write-off of loans, etc. which are primarily in the nature of commercial decisions.
• Complaints which have been decided by or are already pending in other fora such as consumer fora, Courts, Debt Recovery Tribunals, etc

  4.4 The IO shall periodically analyze the pattern of complaints such as product / category wise, consumer groups wise, based on geographical location, etc. and suggest means for taking actions to address the root cause of complaints of different nature.

  4.5 The IO shall examine the complaints on the basis of records/ documents available with the NBFC and comments / clarifications furnished by the NBFC to specific queries of the IO.

  4.6 The IO may hold meetings with concerned functionaries/ departments of the NBFC and seek any record / document available with the NBFC that is necessary for examining the complaint. To ensure resolution through conciliation, the IO may seek direct feedback / clarifications from the complainant.

  4.7 In, cases of conciliation, where the decision of the IO is accepted by the complainant, the IO shall obtain and keep on record, a statement showing the terms of the agreement duly signed by the complainant.

  4.8 The IO shall not represent Fedfina in legal cases arising out of complaints examined by Fedfina or the IO.

  4.9 The IO shall report to the Managing Director / General Manager of Fedfina handling customer grievances.

  4.10 The IO shall immediately refer back to Fedfina all such complaints which are outside the purview of the Scheme.

  4.11 The contact details of I.O. will not be provided in the public domain, as the I.O. shall not entertain and examine FIRST RESORT complaints, which need to be first examined by Fedfina Internal Grievance Redressal Mechanism. In case the I.O. happens to receive FIRST RESORT complaints, he/she shall forward such complaints to Fedfina Internal Grievance Redressal functionary.

   4.12 The I.O. shall exercise general powers of superintendence and control over his office and shall be responsible for the conduct of business there at.

   4.13 Fedfina shall examine the grievances as per its Internal Grievance Redressal Mechanism and in case Fedfina decides to reject or to provide only partial relief to the complainant, it should invariably forward such cases to the I.O. for further examination. The advice to the complainant after examination by I.O. in such cases should necessarily have a clause that the grievance has also been examined by the I.O.

   4.14 Fedfina shall internally escalate all such complaints to IO, before conveying the final decision to the complainant within a period of three weeks, from the receipt of complaint.

   4.15 The I.O. shall have the right to access Fedfina records relating to the complaints received, seek detailed comments from Fedfina with regard to the complaints, can hold meetings with the functionaries/departments concerned and can also meet the complainants, if required, while examining the complaint for redress. Fedfina will furnish all records/documents sought by the I.O. to enable him/her to discharge his/her duties effectively and redress/resolve customer grievances expeditiously.

   4.16 Fedfina shall provide read only access to the Complaint Management Application so that all complaints are accessible to the IO who shall follow up cases of delayed escalation with the concerned department in Fedfina. Fedfina shall also provide access to IO for adding his/her decisions on complaints escalated to the IO, in Fedfina's Complaint Management Application.

   4.17 IO shall also have read-only access to the Reserve Bank's Complaints Management System to enable the IO to keep track of the cases forwarded by the Offices of RBI Ombudsman and the decisions by the RBI Ombudsman thereon, including the decision of the Appellate Authority, where applicable.
  4.18 The I.O. shall maintain confidentiality of any information or document that may come into his knowledge or possession in the course of discharging his duties and shall not disclose such information or document to any person except with the consent of the person furnishing such information or document, provided that nothing in this clause shall prevent the I.O. from disclosing information or document furnished by a party in a complaint to the other party or parties to the extent considered by him to be reasonably required to comply with any legal requirement or the principles of natural justice and fair play in the proceedings. 

  4.19 The decision of the I.O. shall be binding on Fedfina and Fedfina is required to accept it. In case Fedfina disagrees with the decision of I.O., such cases should be reported to RBI by Fedfina with a copy to respective RBI Ombudsman. In such cases, the reply to the customer should also mention the fact though the IO has upheld the customer’s complaint, the NBFC, through its appropriate authority, has overruled the IO’s decision.

  4.20 The reference made by Fedfina to I.O. for examination should emanate primarily from Fedfina’s Internal Grievance Redressal Machinery/ any other designated officials.

  4.21 Fedfina’s Principal Nodal Officer or nodal officers or any other designated authority, liaising with offices of RBI Ombudsman, shall not act as I.O. or vice-versa even during the temporary absence of either.

  4.22 The I.O. will submit a quarterly report of the cases escalated to him to the Board, which will exercise the oversight on the functioning of I.O. However, aspects relating to fraud, misappropriation etc. shall be reported to Audit Committee of the Board immediately.

  4.23 The I.O. shall not represent Fedfina in legal cases arising out of complaints examined by him/her as he/she does not have operational role

5. OPERATING PROCEDURE

  5.1 The I.O. shall take into account the evidence placed before him by the parties, the principles of banking law and practice, directions, instructions and guidelines issued by the Reserve Bank from time to time and such other factors which in his opinion are relevant to the complaint.

  5.2 Fedfina shall, in their final reply to the complainant after obtaining IO's decision, explicitly mention that the complaint has been examined by Fedfina’s IO. Only under circumstances, where a resolution has been made by agreement and the IO had obtained the resolution in writing duly signed by the complainant and furnished to Fedfina for records, should a reply to the complainant be issued by IO with an endorsement to Fedfina.

  5.3 In case of disagreement with the IO's decision, Fedfina may obtain approval of Managing Director/Chief Executive Officer and the reply forwarded to the complainant shall mention that the decision of Fedfina has the approval of Managing Director/Chief Executive Officer. All such cases shall be subsequently reviewed by the Audit Committee and the Board.

  5.4 Where the complaints falling under RBI Ombudsman Scheme, are not resolved to the satisfaction of the complainant (i.e., partly or wholly rejected complaints) even after examination by IO, Fedfina shall necessarily advise the complainant that he/she can approach the RBI Ombudsman for redressal along with complete details and address of the RBI Ombudsman concerned as well as the link to Reserve Bank's portal (www.rbi.org.in -> Complaints -> RBI Ombudsman Scheme -> Complaint Form) for online filing of customer complaints.

  5.5 The decision of the IO shall be mandatorily included in the information submitted by Fedfina to the RBI Ombudsman, while furnishing documents related to the complaints received in the office of the RBI Ombudsman.

  5.6 In cases where the complainant has approached the RBI Ombudsman before the IO has examined the complaint, Fedfina should obtain the views of IO and include the IO's views in its submissions to RBI Ombudsman.

  5.7 Fedfina shall use the analysis of complaints handled by IO in the training programmes/conferences to raise awareness, inter alia, about the patterns of complaints, among the frontline staff, and facilitate consistency in handling of similar complaints. The IO may also be associated for such trainings, where necessary.

  5.8 While assessing the performance of the IO, in addition to the level of pendency and work done by the IO towards developing uniformity across Fedfina in the redressal of complaints, Fedfina should also keep in mind the number of cases where substantive differences are observed between the decisions of the IO vis-à-vis that given by the RBI ombudsman subsequently.

  5.9 IO shall be placed in HO or any of the Regional Offices.

6. REPORTING TO RBI

  6.1 Fedfina shall put in place a system of periodic reporting of information to RBI as indicated below: 

• On quarterly basis, the total number of complaints received number of partly or wholly rejected complaints and number of complaints escalated to the IO, within 15 days from the end of the quarter;
  • (a) On annual basis, the number of cases where the decision of IO has been rejected with the approval of Managing Director/Chief Executive Officer of Fedfina, to be submitted in April every year; and
  • (b) On annual basis, the number of cases closed by IO and age wise number of cases where Fedfina was yet to implement the decision of IO in April every year.

7. OVERSIGHT

  7.1 Board Oversight: The IO shall furnish periodical reports on his / her activities including the analysis to the Audit Committee and the Board, preferably at quarterly intervals, but not less than bi annually. Fedfina shall put in place a system for discussion of cases by the Audit Committee and the Board where the decision of the IO has been rejected by Fedfina, which is to be done with approval of Managing Director/Chief Executive Officer of Fedfina. The Audit Committee of the board can refer to the IO in respect of cases mentioned.

  7.2 Audit: Fedfina shall conduct an internal audit of the implementation. The audit shall, inter alia, cover aspects relating to the infrastructure (space, information technology, human resources etc.) provided to the IO and implementation of auto escalation of partly or wholly rejected complaints to the IO within the timeframe of three weeks as indicated. Internal audit shall also look at the actions by the IO with regard to analysis of complaints, efforts made by IO and support provided by Fedfina towards raising awareness about types of grievances and developing uniformity of approach in handling of complaints across Fedfina. The scope of internal audit shall exclude the decisions taken by the IO.

TERMS AND CONDITIONS OF APPOINTMENT OF AN INDEPENDENT DIRECTOR

• The tenure of appointment shall be subject to the provisions of the Companies Act 2013 and the applicable RBI guidelines.
• The appointment is also subject to the formal election at the next Annual General Meeting (AGM) as well as the Memorandum and Articles of Association (The “Memorandum” & “Articles”) of the Company, as amended from time to time.

2. Role, Duties, Responsibilities and Expectations

• The primary role of the members of the Board is to provide guidance and to act in what they believe to be the best interests of the Company and its shareholders. The role, duties and responsibilities shall be in line with the applicable provisions and Schedule IV of the Companies Act, 2013 read with its Rules, Articles of Association, Listing Agreement and corporate code of conduct.

3. Time Commitment:

• The Independent Director needs to confirm that, he/she is able to allocate sufficient time to the Company to discharge the required duties and responsibilities.

4. Remuneration:

• The Independent Director will be paid sitting fees as approved by the Board in line with the provisions of the Companies Act, 2013 for every Board or Committee meetings attended; subject to appropriate deduction of applicable taxes. The Company will also reimburse the Independent Director for travel, hotel and all reasonable and properly documented expenses that are incurred.

5. Disclosure of Interest:

• It is accepted and acknowledged that the Independent Director may have business or professional interests other than those of the Company and has declared all and any conflicts of interests that are apparent or that the Independent Director is aware of.
• If, in future, any potential conflicts of interests arise, these should be disclosed to the Company as soon as possible.
• Based on the information provided to the Company, the Company can come to the determination that the Independent Director is an independent Board member and will remain so, unless otherwise determined at a later date.

6. Confidentiality:

• All information acquired during the Independent Director’s appointment is confidential to the Company and should not be disclosed to third parties or used for any reason other than in the interest of the Company, either during the NEID’s appointment or later, without prior clearance from the Company.
• Attention is also drawn to the legal and regulatory requirements as they apply to the Company and to its Board members with regard to the disclosure of ‘insider’ information. Consequently, any public or press statements should be avoided, if that will risk a breach of these requirements or does not have prior clearances from the Board of the Company.
• Nothing in this clause shall prevent the Independent Director from disclosing information which he/she is required to disclose by law, provided that the disclosure is made in accordance with the provisions of the relevant law.

7. Governing Law

• The Contract of Appointment is governed by and will be interpreted in accordance with Indian law and Independent Director’s engagement shall be subject to the jurisdiction of the Indian courts.

Fedbank Financial Services Limited-Ombudsman details

Ombudsman_Scheme_for_NBFCs-_2018

Levy of foreclosure charges/pre-payment penalty on Floating Rate Loans by NBFCs

RBI-Ombudsman-Scheme-Form

RBI Ombudsman Clarfication

Salient Features NBFC Ombudsman Scheme - English

Salient Features NBFC Ombudsman Scheme - Gujarati

Salient Features NBFC Ombudsman Scheme - Hindi

Salient Features NBFC Ombudsman Scheme - Kannad

Salient Features NBFC Ombudsman Scheme - Malayalam

Salient Features NBFC Ombudsman Scheme - Marathi

Salient Features NBFC Ombudsman Scheme - Tamil

Salient Features NBFC Ombudsman Scheme - Telugu

Mr. Sumit Kakkar, Nominee Director, resigned from the Board of Directors of the Company w.e.f. 13th March, 2020

Mr. Dilip Sadarangani, Independent Director, retired from the Board of Directors of the company w.e.f 8th September 2019

Mr. Ganesh Sankaran, Nominee Director, resigned from the Board of Directors of the company w.e.f 15th February 2019

Mr. Rajagopalan Santhanam, Nominee Director, resigned from the Board of Directors of the company w.e.f 20th December 2018

Mr. Suresh Kumar, Independent Director, resigned from the Board of Directors of the company w.e.f 19th June 2017.

Mr. Ujwal Thakar, Independent Director, resigned from the Board of Directors of the company w.e.f 5th August 2016.

Q3 FY 20

June 2020

September 2020

December 2020

March 2021

June 2021

September 2021

December 2021

March 2022

June 2022

September 2022

December 2022

Anil Kothuri-MD & CEO

C.V.Ganesh- Chief Financial Officer

S. Rajaraman- Company Secretary & Compliance officer

Anila Rajneesh

Jagadeesh Rao 

K Sureshkumar

Ramachandra R

Shardul Kadam

K. Siddharth

Vikas Mohan Srivastava

Company has 3 Selling and Servicing Agents, which are as follows:

1. New Opportunity Consultancy Private Limited (NOCPL)

2. Svasti Microfinance Private Limited

3. Si Creva Capital Services Private Limited (Kissht)

DEBENTURE TRUSTEE OF FEDBANK FINANCIAL SERVICES LIMITED.

For Secured Non convertible Debentures & Subordinate debt – Non Convertible Debentures

For Principal Protected Market Linked Debentures -- Non Convertible Debentures

Customer Education Literature on SMA/NPA

Fair Practice Code - English

Fair Practice Code - Gujarati

Fair Practice Code - Hindi

Fair Practice Code - Kannada

Fair Practice Code - Malyalam

Fair Practice Code - Marathi

Fair Practice Code - Tamil

Fair Practice Code - Telugu