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Statutory disclosures

Policies, codes and the escalation path.

Published under the Reserve Bank of India's Master Direction for Non-Banking Financial Companies and the Reserve Bank – Integrated Ombudsman Scheme, 2026. Board-approved and reviewed annually.

Fair Practices Code

Company
Kovid Finance Private Limited
Registration
RBI Certificate of Registration No. B-10.00134 · CIN U67120RJ1993PTC007199
Registered Office
Prakash Deep, 410, Shopping Centre, Kota – 324007 (Rajasthan)
Policy
Fair Practices Code
Version
3.0 (supersedes the Fair Practices Code previously approved by the Board)
Approved by
Board of Directors vide resolution dated 15.04.2026
Effective from
Date of approval by the Board
Contents
  1. 1. Purpose, regulatory basis and scope
  2. 2. Objectives
  3. 3. Applications for loans and their processing
  4. 4. Loan appraisal and terms and conditions
  5. 5. Key Facts Statement
  6. 6. Penal charges
  7. 7. Disbursement of loans including changes in terms and conditions
  8. 8. Interest rates and charges
  9. 9. General
  10. 10. Recovery and collection
  11. 11. Credit information and asset classification
  12. 12. Products and channels not offered
  13. 13. Confidentiality and data protection
  14. 14. Grievance redressal
  15. 15. Display, review and amendment

01Purpose, regulatory basis and scope

  • 1.1This Fair Practices Code (“Code”) is adopted by Kovid Finance Private Limited (“the Company”), in compliance with the Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025 and Chapter II and Chapter III of the Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025 (“RBC Directions”), and other applicable directions of the Reserve Bank of India (“RBI”).
  • 1.2The Code sets the minimum standards of conduct the Company follows when dealing with borrowers, applicants, guarantors and the public. It applies to every product offered by the Company, every branch and place of business, and every employee, Direct Selling Agent (DSA), recovery agent and other outsourced agency acting for the Company.
  • 1.3The Code is available in English and Hindi, is published on the Company’s website and is displayed at every place of business. Where a borrower understands neither language, the Company shall explain its contents in a language the borrower understands.
  • 1.4Nature of the Company’s lending. The Company extends unsecured fixed-rate term loans to individuals for business and personal purposes and to micro, small and medium enterprises for business purposes, through its own offices. Applicants may submit loan applications and copies of documents either physically or electronically. In every case, the Company verifies the borrower and the original documents in person, and its officers carry out the credit assessment and approval, before the loan documents are executed. Loan documents are executed either physically or by an electronic signature recognised under the Information Technology Act, 2000, at the borrower’s option; any document that cannot be executed electronically under that Act, or that the borrower is unable to execute electronically, is executed physically. Payment reminders may be sent through automated systems in accordance with paragraph 11.

02Objectives

  • Promote good, fair and transparent practices by setting minimum standards in dealing with customers.
  • Increase transparency so that customers can understand what they can reasonably expect of the Company’s services.
  • Encourage market forces, through competition, to achieve higher operating standards.
  • Foster fair and cordial relationships between customers and the Company.
  • Maintain an effective mechanism for redressal of customer grievances.
  • Ensure compliance with applicable laws, regulations and RBI directions.

03Applications for loans and their processing

  • 3.1All communications to the borrower shall be in Hindi or English, or in another language understood by the borrower.
  • 3.2Every loan application form shall include the information affecting the interest of the borrower, so that a meaningful comparison with the terms offered by other lenders can be made and an informed decision taken. It shall state the rate of interest, the approach for gradation of risk and the rationale for charging different rates of interest to different categories of borrowers, and shall list the documents required to be submitted with the application.
  • 3.3The Company shall give an acknowledgement for every loan application received, stating the time frame within which the application will be disposed of. The Company shall endeavour to communicate its decision within 7 working days of receipt of a complete application with all required documents.
  • 3.4No fee shall be charged for accepting an application other than the processing fee disclosed in the Key Facts Statement. No fee or charge shall be paid in cash to any employee, DSA or agent.

04Loan appraisal and terms and conditions

  • 4.1The Company shall convey to the borrower in writing, by a Sanction Letter in Hindi or English or a language understood by the borrower, the amount sanctioned and all terms and conditions, including the annualised rate of interest and the method of its application; processing and other fees; penal charges and the circumstances in which they apply; prepayment / foreclosure charges, if any; the repayment schedule; the security, if any, and its enforcement; and the timeline and place for return of original property documents on repayment.
  • 4.2The Company shall obtain the borrower’s written acceptance of the terms and conditions of sanction and keep it on record.
  • 4.3The Company shall furnish to every borrower, at the time of sanction or disbursement, a copy of the loan agreement in a language understood by the borrower, together with a copy of every enclosure quoted in the loan agreement.
  • 4.4The loan agreement, Sanction Letter and Key Facts Statement shall state that the loan is at a fixed rate of interest, together with the rate and the total interest payable over the tenor.

05Key Facts Statement

  • 5.1For every retail and MSME term loan, the Company shall provide the prospective borrower with a Key Facts Statement (“KFS”) in the format prescribed in Annex I to the RBC Directions, before execution of the loan agreement. The KFS shall be in in Hindi or English or a language understood by the borrower; its contents shall be explained to the borrower, and an acknowledgement that the borrower has understood them shall be obtained.
  • 5.2The KFS shall carry a unique proposal number and shall be valid for at least three working days for loans with a tenor of seven days or more, and for one working day for loans with a tenor of less than seven days. The Company shall be bound by the terms in the KFS if the borrower agrees to them within the validity period.
  • 5.3The KFS shall include a computation sheet of the Annual Percentage Rate (APR) and the amortisation schedule over the loan tenor. Charges recovered on behalf of third-party service providers on actual basis, such as insurance or legal charges, shall form part of the APR and be disclosed separately; receipts and related documents for each such payment shall be provided to the borrower within a reasonable time.
  • 5.4No fee or charge that is not mentioned in the KFS shall be charged to the borrower at any stage during the term of the loan without the borrower’s explicit consent.

06Penal charges

  • 6.1Penal charges shall be levied only in accordance with the Company’s Board-approved Policy on Penal Charges.
  • 6.2Any penalty for non-compliance with the material terms and conditions of the loan, including default in repayment, shall be levied as “penal charges” and not as “penal interest” added to the rate of interest. Penal charges shall not be capitalised, and no interest shall be computed on them. The Company may charge interest on unpaid interest (including unpaid instalments) only at the contracted rate of interest till the date of remediation. The Company shall not introduce any additional component to the rate of interest.
  • 6.3Penal charges shall be reasonable and commensurate with the non-compliance; shall be levied in case of default only on the amount under default; shall be non-discriminatory and uniform within a loan or product category irrespective of the constitution of the borrower; and shall not be levied on earlier outstanding penal charges.
  • 6.4Penal charges on loans sanctioned to individual borrowers for purposes other than business shall not be higher than those applicable to non-individual borrowers for similar non-compliance.
  • 6.5The quantum of and reason for penal charges shall be disclosed in the loan agreement, the Sanction Letter and the KFS, and displayed on the Company’s website under interest rates and service charges. A reference to the website schedule alone shall not be treated as disclosure.
  • 6.6Every reminder sent for non-compliance with material terms shall state the applicable penal charges, and every levy of penal charges, with the reason for it, shall be communicated to the borrower.
  • 6.7The Company shall follow the instructions and clarifications of the Central Board of Indirect Taxes and Customs on the applicability of GST to penal charges.

07Disbursement of loans including changes in terms and conditions

  • 7.1The Company shall give notice to the borrower, in in Hindi or English or a language understood by the borrower, of any change in the terms and conditions, including the disbursement schedule, service charges and prepayment charges.
  • 7.2Changes in charges shall be effected only prospectively. A condition to this effect shall be incorporated in the loan agreement.
  • 7.3Any decision to recall or accelerate payment or performance under the loan agreement shall be in accordance with the loan agreement.

08Interest rates and charges

  • 8.1The Board has adopted an Interest Rate Policy, taking into account the cost of funds, margin and risk premium, laying down the principles and procedures for determining the rate of interest, processing fees and other charges.
  • 8.2The rate of interest, the approach for gradation of risk and the rationale for charging different rates of interest to different categories of borrowers shall be disclosed in the application form and communicated explicitly in the Sanction Letter. The rates of interest and the approach for gradation of risk shall be published on the Company’s website and updated whenever they change.
  • 8.3The rate of interest shall be stated as an annualised rate, so that the borrower is aware of the exact rate charged to the account.
  • 8.4Interest shall be charged only from the date of actual disbursement of funds and only for the period the loan is actually outstanding. Where disbursement is made by cheque, interest shall be charged from the date the cheque is handed over to the borrower. The Company shall not collect instalments in advance and also charge interest on the full loan amount for that period.
  • 8.5Prepayment / foreclosure charges. All loans of the Company are at a fixed rate of interest. Prepayment or foreclosure charges, if any, shall be levied only in accordance with the Company’s Board-approved policy, and:
  • (a)shall be computed only on the amount being prepaid;
  • (b)shall not be levied where the prepayment is made at the instance of the Company;
  • (c)shall be clearly disclosed in the Sanction Letter, the loan agreement and the KFS, and no charge not so disclosed shall be levied;
  • (d)shall not include any charge or fee that the Company had earlier waived.
  • 8.6If the Company introduces floating-rate loans, this Code shall be amended before launch to incorporate the applicable RBI directions on prepayment charges and reset of floating interest rates.

09General

  • 9.1The Company shall refrain from interfering in the affairs of the borrower except for the purposes provided in the loan agreement, unless information not earlier disclosed by the borrower comes to its notice.
  • 9.2On receipt of a request from the borrower for transfer of the loan account, the Company shall convey its consent or objection, if any, within 21 days of receipt of the request. Such transfer shall be as per transparent contractual terms in consonance with law.
  • 9.3The Company shall not discriminate on grounds of sex, caste, religion or disability in extending products, services and facilities, including loan facilities. All offices shall render all possible assistance to physically or visually challenged persons. The Company’s staff training programmes shall include a module on the rights of persons with disabilities under law and international conventions, and grievances of persons with disabilities shall be redressed under the Grievance Redressal Policy.

10Recovery and collection

  • 10.1In the recovery of loans, the Company and its agents shall not resort to intimidation or harassment of any kind, verbal or physical, against any person. In particular, they shall not:
  • contact the borrower for recovery before 8:00 a.m. or after 7:00 p.m., or call the borrower persistently;
  • use threatening or abusive language, or make threatening or anonymous calls;
  • use or threaten violence or muscle power;
  • act to humiliate the borrower publicly, publish the borrower’s name, or intrude upon the privacy of the borrower’s family members, referees or friends;
  • send inappropriate messages by mobile phone or social media; or
  • make false or misleading representations about the debt or the consequences of non-repayment.
  • 10.2Automated payment reminders shall be sent only between 8:00 a.m. and 7:00 p.m., shall comply with paragraph 11.1, and shall state the applicable penal charges as required by paragraph 6.6.
  • 10.3Recovery agents shall be engaged only in accordance with the Company’s Board-approved Policy on Engagement of Recovery Agents. The Company shall carry out due diligence on recovery agencies and the individuals involved in recovery, shall ensure that the agencies verify the antecedents of their employees, including police verification, and shall re-verify them at the periodicity laid down in that Policy.
  • 10.4When initiating recovery, the Company shall provide the borrower with the details of the recovery agent. The agent shall carry a copy of the Company’s notice and authorisation letter, which shall include the contact details of the recovery agency and of the Company, together with an identity card issued by the Company or the agency. If the recovery agency is changed, the Company shall notify the borrower, and the new agent shall carry the notice, authorisation letter and identity card.
  • 10.5Up-to-date details of the recovery agencies engaged by the Company shall be hosted on its website.
  • 10.6The Company shall ensure that its DSAs and recovery agents are trained to handle their responsibilities with care and sensitivity, including the soliciting of customers, hours of calling, privacy of customer information and conveying the correct terms of products, and shall obtain from each of them an undertaking to abide by the Code of Conduct for DSA / DMA / Recovery Agents. The Company remains responsible for their conduct.
  • 10.7The Company shall engage only telemarketers registered with the Department of Telecommunications in terms of the guidelines issued by TRAI, and shall furnish to TRAI the list of telemarketers engaged and the registered telephone numbers used by them.
  • 10.8Complaints relating to recovery shall be dealt with under the Grievance Redressal Policy.

11Credit information and asset classification

  • 11.1The Company shall report credit information of its borrowers to Credit Information Companies accurately and within the timelines required by RBI directions, shall intimate borrowers in the manner prescribed by RBI when reporting a default, and shall resolve disputes about credit information, and pay compensation for delay, as prescribed by RBI.
  • 11.2The Company shall explain to borrowers the RBI framework for classification of accounts as Special Mention Accounts and Non-Performing Assets, including the day-end process and the consequences of default, through the loan agreement, the Sanction Letter and an explainer on its website.

12Products and channels not offered

  • 12.1Loans against gold or silver collateral. The Company does not lend against gold or silver collateral. This Code shall be amended to incorporate the applicable RBI requirements before any such product is introduced.
  • 12.2Microfinance loans. The Company does not extend collateral-free loans to households with annual income up to ₹3,00,000. This Code shall be amended to incorporate the RBI requirements for microfinance loans before any such lending is undertaken.
  • 12.3Digital lending. The Company does not lend through digital lending applications or Lending Service Providers. This Code shall be amended to incorporate the requirements of Chapter III (Digital Lending) of the Reserve Bank of India (Non-Banking Financial Companies – Credit Facilities) Directions, 2025 before any such arrangement is introduced.

13Confidentiality and data protection

  • 13.1The Company shall treat all personal information of customers as private and confidential and shall handle it in accordance with its Privacy Policy, section 43A of the Information Technology Act, 2000 and the rules made under it, applicable RBI directions, and the Digital Personal Data Protection Act, 2023 and the rules made under it as and when their provisions take effect.
  • 13.2Customer information shall not be disclosed to any third party except (a) where required by law or by a regulator; (b) where there is a duty to the public to disclose; (c) with the customer’s consent; or (d) to Credit Information Companies, service providers and auditors as required for the conduct of business, under appropriate confidentiality obligations.
  • 13.3Documents received from customers electronically shall be transferred to the loan file and handled in accordance with the Company’s data-handling procedures, including restrictions on their retention on personal devices.

14Grievance redressal

  • 14.1The Board has adopted a Grievance Redressal Policy, under which every dispute arising from a decision of the Company’s functionaries shall be heard and disposed of at least at the next higher level.
  • 14.2Grievance Redressal Officer: Kovid Jain, Kovid Finance Private Limited, Prakash Deep, 410, Shopping Centre, Kota – 324007 (Rajasthan). Phone: 7665527777. E-mail: grievance@kovidfinance.com.
  • 14.3If the complainant does not receive a response within 7 days, or is not satisfied with the response, the complaint may be escalated to the Nodal Officer: Virendra Jain, at the above address. Phone: 9829035223. E-mail: nodal.officer@kovidfinance.com.
  • 14.4Customer care (inbound): [+91 7230006403], Monday to Saturday, 11:00 a.m. to 6:00 p.m.
  • 14.5The Reserve Bank of India has introduced a web-based mechanism “Complaint Management System (CMS)”, for lodging Complaints / Grievances by Citizens of India which may include the customers as well. This is known as the Public Grievance portal (https://cms.rbi.org.in/). Customers may make use of the said Portal to communicate their grievances to the Company.
  • 14.6The name and contact details of the Grievance Redressal Officer and the Nodal Officer shall be displayed at every place of business and on the Company’s website.

15Display, review and amendment

  • 15.1This Code, the Interest Rate Policy, the schedule of charges including penal charges, the grievance redressal contacts shall be displayed on the Company’s website and at every place of business.
  • 15.2The Board shall provide for periodical review, at least once a year, of compliance with this Code and of the functioning of the grievance redressal mechanism at various levels of management. A consolidated report of such reviews shall be placed before the Board.
  • 15.3The Board may amend this Code from time to time. Any change required by an amendment to RBI directions shall be deemed incorporated from the date the amendment takes effect, pending formal amendment of the Code.
  • 15.4This Code supersedes the Fair Practices Code previously approved by the Board, with effect from the date of its approval.