Fair Practice Code

BANKS’ FAIR PRACTICE CODE FOR LENDERS

As directed by the Reserve Bank of India, vide circular DBOD.No.Leg.No. BC.65/ 09.07.005/2006-07 dated March 6, 2007; the Bank has adopted modified Fair Practice Code for lenders as approved by the Board of Directors. The salient features of the same are:

2. Guidelines:

(i) Processing of loan applications:

(a) In the loan application form, the Bank shall provide comprehensive information including information about fees and charges if any payable for processing and amount of such fees refundable in case of non acceptance of application, prepayment options and other matter which affects the interest of the borrowers, as per the details more fully described in schedule-I to prospective borrowers of all categories of loans, irrespective of the amount of loan sought by them.

(b) The Bank shall provide acknowledgement for receipt of all loan applications. The above said acknowledgement shall also mention the time frame within which application/s up to Rs.2 lakh will be disposed of by the Bank.

(c) The Bank shall verify the loan applications within a reasonable period of time for disposal as per the time frame mentioned in schedule-II.

(d) The Bank shall convey in writing the main reason/s which, in the opinion of the Bank after due consideration have led to rejection of the loan application in case of all categories of loans irrespective of any threshold limits, including ‘K-power’ applications (credit allowed in debit card of the Bank) within a stipulated time.

(ii) Loan appraisal and terms/conditions:

(a) The Bank shall ensure that there is proper assessment of credit applications made by the borrower.

(b) The Bank shall convey to the borrower the credit facilities sanctioned along with the terms and conditions thereof, and keep the borrowers acceptance of these terms and conditions given with his full knowledge on record.

(d) The credit facilities extended are solely at the discretion of the Bank, as stipulated in the loan agreement. The Bank does not have any obligation to meet further requirement of the borrower/s on account of growth in business etc., without proper review of credit limits.

(e) Under consortium arrangement, the participating member banks shall evolve procedures to complete appraisal of proposals in the time bound manner to the extent feasible and communicate their decisions on financing or otherwise within a reasonable time.

(iii) Disbursement of loans including changes in terms & conditions:

(a) The Bank shall ensure timely disbursement of loans sanctioned in conformity with the terms and conditions governing such sanction.

(b) The Bank shall give notice of any change in the terms and conditions including interest rates, service charges etc., to the borrower and ensure that changes in interest rates and charges are made prospectively. Whenever the changes made are not borrower specific and apply to any/all categories of borrower, notice of change shall construed to be made if the communication of the same is made in any of the following media: display with notice board of the Bank in the branch where the borrower account is maintained, or news paper publicity or with Bank’s website, or direct communication by courier/post.

(iv) Post disbursement supervision:

(a) Post disbursement supervision by the Bank particularly in respect of loans upto Rs.2.00 lakhs, shall be constructive with a view to taking care of any "lender-related" genuine difficulty that the borrower may face.

(b) Before taking a decision to recall/ accelerate payment or performance under the agreement or seeking additional securities, Bank shall give notice to borrowers, as specified in the loan agreement or within a reasonable period, if no such condition exists in the loan agreement.

(c) The Bank shall release all securities on receiving payment of loan or realisation of loan subject to any legitimate right or lien for any other claim the Bank may have against borrowers. If such right of set off is to be exercised, borrowers shall be given notice about the same with full particulars about the remaining claims and the documents under which the Bank is entitled to retain the securities till the relevant claim is settled / paid.

(v) GENERAL:

(a) Bank shall restrain from interference in the affairs of the borrowers except for what is provided in the terms and conditions of the loan sanction documents (unless new information, not earlier disclosed by the borrower, has come to the notice of the bank).

(b) The Bank shall not discriminate on grounds of sex, caste and religion in the matter of lending. However, this does not preclude bank from participating in credit-linked schemes framed for weaker sections of the society.

(c) In the matter of recovery of loans, the Bank shall not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans etc.

(d) In the case of receipt of request for transfer of borrowal account, either from the borrower or from a bank / financial institution which proposes to takeover the account, the consent or otherwise i.e objection of the Bank, if any, shall be conveyed within 21 days from the date of receipt of request.

(vi) Grievance redressal:

(a) Disputes in regard to sanction of loans and advances coming under the powers of Branch Heads shall be referred to respective Regional Heads for redressal.

(b) Disputes in regard to sanctions coming under the powers of Regional Heads (AGMs), shall be the referred to respective Deputy General Managers at Head Office for redressal.

(c) Disputes in regard to sanctions coming under the powers of Deputy General Managers (DGMs) at Regional Offices and Deputy General Managers at Head Office shall be referred to the General Manager at Head Office for redressal.

(d) Disputes in regard to sanctions coming under the powers of General Manager, Chief General Manager, Chairman, EC/ Board, shall be referred to Chairman for redressal.

******

SCHEDULE- I

1. Processing charges on priority sector advances (Fund based):

Sl.No.	Limit	Rate
(i)	Up to Rs.25000/-	Nil
(ii)	Above Rs.25000/- and up to Rs.2.00 lakh	0.25% with a minimum of Rs.50.00
(iii)	Above Rs.2.00 lakh	0.25% with a minimum of Rs.500.00 and maximum of Rs.1.00 lakh.

2. Krishi Card:

Processing charges	At the time of first release/issuing cards	As in 1 above.
	At the time of renewal of card for the second season/year	NIL

3. Other advances:

Processing charges on advances (fund based):

Limit	Rate
Below Rs.2.00 lakh	0.50% with a minimum of Rs.50.00
Above Rs.2.00 lakh	0.25% with a minimum of Rs.1000.00 and maximum of Rs.2.00 lakh.

The above rates are subject to change.

SCHEDULE – II

Prime norms for disposal of loan applications

(a) Time norms for disposal of applications for inland credit facilities:

Decision taking authority	Maximum time limit for disposal of loan application
At the Branch level	15 days
At the RO level	30 days
At the HO level	45 days

(b) Time norms for disposal of applications for export credit facility to Gold Card holders:

Proposal for sanction of fresh / enhanced limits	25 days
Renewal of existing limits	15 days
Sanction of adhoc limits	7 days

Type of transactions	Maximum time limit for disposal of loan applications
Proposal for sanction of fresh / enhanced limits	45 days
Renewal of existing limits	30 days
Sanction of adhoc limits	15 days

BANKS’ FAIR PRACTICE CODE FOR DEBIT CARD OPERATIONS

1. About this code

1.1 This is a voluntary Code. The purpose of this Code is to have a benchmark service standard in our dealings while issuing and dealing in Debit Cards and will guide our staff in dealing with our customers. The code is expected to help the Debit Card holder customers in knowing their rights and also measures they should take to protect their interests. We propose to place this code on our web site and make copies available to our customers on demand.

1.2 Though a voluntary document, adoption of this Code is expected to promote customer confidence in our Debit Card product/s and bring about better understanding between the Bank and its Customers and thereby encourage achievement of higher operating/service standards to benefit our customers.

1.3 For the sake of brevity and clarity, in this Code:

a) "Debit Card" shall mean and denote the Debit Card Issued by the Karnataka Bank Ltd either independently or in association with any other issuers like Visa International etc.

b) “We" "us" "our" "Bank" shall mean and denote the Karnataka Bank Ltd;

c) "You" shall mean and denote the Customer/s of the Karnataka Bank Ltd. who hold or have applied for Karnataka Bank's Debit Card

d) "Code" means and shall denote "The Fair Practice Code for Debit Card Operations" - being these covenants;

e) "Tariff" / "Charges" / "Fee/s" / "Interest" or "Commission" shall mean and denote only those

Tariff/Charges/Fee/s/Interest or Commission prescribed by the Karnataka Bank Ltd. and it will be independent of and will not include the Tariff/Charges/Fee/s whatsoever that may be charged or levied by other Acquirer Host for using their site/network and which charges will be passed on to our customers in addition to our charges. All such charges will be levied and debited to the account of the Debit Card Holder Customer's account.

1.4 The standards of the Code shall be governed by the four key commitments detailed in section 2 written hereunder.

1.5 Unless stated otherwise, all parts of this Code apply to all the Debit card products and services, whether we provide them across the counter, over the phone, on the internet or by any other method.

1.6 Commitments outlined in this Code are applicable under normal operating environment. In the event of force majeure, (i.e. under circumstances beyond our control) we may not be able to fulfill the commitments detailed under this Code.

2. Key commitments

We promise to:

2.1 Act fairly and reasonably in all our dealings with you by:

· meeting the commitments and standards in this Code, for the products and services we offer, and in the procedures and practices our staff/ agents follow

· making sure our products and services meet relevant laws and regulations

· ensuring that our dealings with you will rest on principles of integrity and transparency

· not engaging in any unlawful or unethical consumer practice.

2.2 Help you to understand how our Debit card products and services work by giving you the following information in a simple language:

· what are the benefits to you

· how you can avail of the benefits

· what are their financial implications

· whom you can contact for addressing your queries and how

2.3 Deal quickly and effectively with your queries and complaints by:

· offering channels for you to route your queries

· listening to you patiently

· accepting our mistakes, if any

· correcting mistakes / implementing changes to address your queries

· communicating our response to you promptly

· telling you how to take your complaint forward if you are not satisfied with the response

2.4 Publicize this code, by making it available for public access on our website and make copies available for you on request.

3. Information (To help you to choose products and services, which meet your needs)

3.1 Before you become a Debit card customer, we will:

· give you information explaining the key features of our Debit card products including applicable fees and charges

· advise you what information / documentation we need from you to enable us to issue Debit card to you. We will also, advise you what documentation we need from you with respect to your identity, address, employment etc., and any other document that may be stipulated by statutory authorities (e.g. PAN details), in order to comply with legal and regulatory requirements.

· While you apply for Debit card, we will explain the relevant terms and conditions such as fees and charges, renewal and termination procedures and any other information that you may require with regards to the Debit Card/s and its operations.

3.2 We will advise you of the turn around time that may be required by us to respond to you while you are availing/applying for a service.

3.3 We will make available to you a service guide/brochure/booklet giving detailed terms and conditions, fees and charges applicable and other relevant information with respect to the usage of your Debit card along with your first Debit card.

3.4 We will advise you our contact details such as contact telephone numbers, postal address, website, e-mail address to enable you to contact us whenever you need to.

3.5 If you do not recognize a transaction which appears on your Bank account statement on account of usage of Debit card, we will try to provide you more details on such transaction, if you ask us. However, we may need you to give us confirmation or evidence that you have not authorized such a transaction.

3.6 We will inform you, through our service guide/brochure/booklet of the losses on your account that you may be liable if your card is lost / misused.

4. Tariff (Fees/Charges etc.)

4.1 You may ascertain our charges/fee etc. by:

· Referring to the service guide / booklet / Branch Notice Board

· Calling up on customer service numbers

· Visiting our website; or

· Asking our designated staff

4.2 When you become our Debit Card holder customer, and if you apply for and if you are sanctioned with our "K-power" overdrawing facility, we will provide you information on the "K-Power" facility and the maximum extent to which you may overdraw your account, how and when you have to repay or regularize such over drawings and the interest rates applicable on your over drawings and we will charge the same interest for over drawings in your account.

4.3 If you ask us, we will also explain how we apply interest to you account

Changes in our tariff

4.4 When we change/revise our tariff on our Debit card products, we will update the information on our telephone help-line/website.

4.5 As regards the charges/fees etc. of any of acquirer host for using their network, we expect you to independently enquire and ascertain, from time to time, the Charges/Fee/s etc. whatsoever that may be charged or levied by other Acquirer Host on your using their network. However, we also will try to update you on such charges.

5. Marketing Ethics

5.1 Field Personnel

Debit Cards are normally issued by us through our staff working at respective Branches. However, in case we engage any sales/marketing representatives such representatives will identify themselves when they approach you for selling our card products. In the event of receipt of any compliant from you that our representative/s has/have engaged in any improper conduct, we shall take appropriate steps to redress your compliant.

5.2 Telemarketing

If our staff / agents contact you over phone for selling any of our Debit card products or with any cross sell offer, the caller will identify himself / herself and advise you that he / she is calling on our behalf. Please note that such phone calls, if any, will be restricted to provide you products information or to convey you more about ourselves and we request you not to divulge or converse on any confidential information related to your account and Debit Card.

6. Issuance of Debit Card/PIN

6.1 Our Debit Cards are delivered to you personally by our Officials at the branch where you have submitted your application for the Debit Card. Officials from our branch which maintains your account and where you have submitted application for Debit Card may also visit your place at the address provided by you and deliver the Debit Card to you.

6.2 Debit Cards are issued in deactivated (not ready to use) mode and after issuing the Debit Card to you the card needs to be activated in the system which will be done within a reasonable time. You can start using the Debit Card only after the Card is activated.

6.3 We expect you to read the User Manuals and strictly follow all the safety measures required to be followed by you as regards safety of the Debit Card and security aspect regarding its operation.

7. Account Operations

Debit card statements

7.1 All your purchases and cash withdrawals using the Debit Card will be debited to your account instantly and your Bank account statement/pass book will contain all your transactions using the Debit Card. However, on some very rare occasions due to certain exceptional delayed responses owing to switch or connectivity related problems, debits representing your transactions using the Debit Card may not occur instantly but with some delay. We advise you to obtain your Bank account statements/pass books at regular intervals and peruse the same. As and when we launch Internet Banking facility, you may also avail of the same and you may access your account online and, inter alia, check details of your purchases / cash drawings using the Debit card.

7.2 We will let you know / notify changes in schedule of fees and charges and terms and conditions through our web site and/or displaying it on the Notice Boards at our Branches. Normally, changes (other than interest rates and those which are a result of regulatory requirements) will be made with prospective effect giving notice of at least 15 days.

Protecting your Debit Card/account

7.3 We will advise you what you can do to protect your Debit card from misuse. This information is normally available in the 'User Manual'.

7.4 In the event your Debit card being lost or stolen, we will, on your duly notifying us, take immediate steps and try to deactivate the card to prevent it from being misused, subject to operating regulations and laws in force.

Processing activities at our end

7.5 We may allow processing of Debit cards related activities including operations and cross selling to third party agencies that we consider appropriate for these purposes.

8. Confidentiality of Account Details

8.1 We will treat all your personal information as private and confidential. We will not reveal transaction details of your accounts to any third party, including other entities, if any, in our group, except in the following four exceptional circumstances;

· if we have to give the information by law

· if there is a duty towards the public to reveal the information

· if our interests require us to give the information (for example, to prevent fraud) but we will not use this as a reason for giving information about you or your accounts (including your name and address) to anyone else, including any other companies, if any, in our group, for marketing purposes.

· if you ask us to reveal the information, or if we have your permission to provide such information to our group/associate/entities or companies when we have tie-up arrangements for providing other financial service products.

9. Redressal of Grievances

10.1 Redressal of your complaints internally

We have our 'Customer Care Centre' at Bangalore with a toll free telephone line. You will seek redressal of your grievances, if any, first from our Customer Care Centre. If you are not happy about the outcome, you are requested to post your suggestion/complaint to our Deputy General Manager, P&D, Head Office, Mahaveera Circle, Mangalore - 575002.

10.2 Banking Ombudsman Services

If you do not get a satisfactory response from us within 60 days of lodging a compliant, and you wish to pursue other avenues for redressal of your grievances, you may approach Banking Ombudsman appointed by Reserve Bank of India under Banking Ombudsman Scheme 2002.

11. Termination of Debit Card

11.1 You may terminate your Debit card by giving notice to us and by following the procedure laid down by us in our service guide / member booklet after clearing outstanding dues, if any.

11.2 We may terminate your Debit card, if in our opinion; you are in breach of the Cardholder Agreement.

12. Feedback and Suggestions

Please help us to serve you better by providing feedback on our services. Your suggestions will help us to improve our services.