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| Exchange Disseminated Time 12/04/2017 18:03:11 | The Exchange had sought clarification from Shriram City Union Finance Ltd with respect to news article appearing in moneycontrol.com on April 12, 2017 titled "RBI observed that the companies have violated various provisions of the Fair Practices Code guidelines and thereby issued a show cause notice to both"
Shriram City Union Finance Ltd
replied stating "The Reserve bank of India ("RBI") vide their order No. DNBS (Che) No. 170713.18.033/2016-17 dated April 11, 2017 communicated to us about the levy of penalty of `. 20 lakhs on the Company for violation of Fair practices Code of RBI. As per the fair practices Code, the Company is required for
Execution of Loan agreements/Sanction letters etc in vernacular language as understood by the borrower.
Stating Penal interest charges/delayed payment charges in bold letters in agreement/sanction letters etc.
Communicating the annualized rate of interest.
Advance EMIs to be reflected in interest calculation.
In the course of inspection by RBI team, which is done by RBI annually, RBI found certain lapses/delay in compliance with the said Fair Practices Code of RBI by the Company. The Company represented before RBI for these matters. RBI decided for levying of penalty of `. 20 lakhs." |
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