Fair Practice Code
1. Background of the Company

5PAISA P2P Limited ("5Paisa") operates as a web-based peer to peer lending platform through its website (https://www.5paisaloans.com) and app (collectively, the "Platform") to provide a common platform to the investors who intend to lend ("Lenders") and individual borrowers who intend to borrow ("Borrowers") in India. This fair practices code is approved by the Board of Directors of 5Paisa and is also in conformity with the guidelines prescribed by RBI under the Master Directions on Non-Banking Financial Company - Peer to Peer Lending Platform (Reserve Bank) Directions, 2017 ("Code").

2. Objective of the Code

This Code sets the minimum fair practice standards to be followed by all the employees and representatives of 5Paisa while dealing with the Borrowers and the Investors on the Platform. The Code also provides information to the Borrowers and the Investors on the Platform and details the manner in which 5Paisa and its employees and representatives are expected to deal with the Borrower and Investors on a day to day basis. The primary objectives of the Code are as follows:

  • Ensure fair practices while dealing with the Borrowers and Investors on the Platform
  • Provide greater transparency in all transactions, thereby enabling customers to have a clear understanding of the products and services (including the terms and conditions of such products and services) offered by 5Paisa and make informed decisions; and
  • Build the confidence of the Borrower and the Investor in 5Paisa’s Platform.
3. Application of the Code

This Code shall apply to all the borrowers, employees of 5Paisa and such other persons authorized to represent 5Paisa in respect of the all categories of products and services offered by 5Paisa.

4. Applications for loans and their processing
  • All communication to the Borrowers and Investors shall be in English.
  • All policies and terms and conditions, including details on the website such as the Privacy Policy, Disclaimer, User Terms, FAQs etc shall be maintained in English.
  • All the written communication to borrowers and investors shall be in English through emails.
  • Oral communication with borrowers and investors will be in vernacular language or a language as understood by the borrower and investor, to the extent possible.
  • The loan application form and annexures shall include all the necessary information which affects the interest of the Borrower to enable the Borrower to compare similar terms and conditions offered by other financial institutions and take an informed decision. In addition to the loan application form, details regarding products and services offered by 5Paisa shall be specified on the Platform
  • The loan application form shall also indicate the list of documents required to be submitted by the Borrower along with the application form which shall be acknowledged by 5Paisa by way of loan status displayed on the platform. To the extentadministratively practical, such acknowledgement shall provide the time frame within which 5Paisa will dispose the loan application.
5. Loan appraisal and terms/conditions
  • 5Paisa shall convey to the Borrower in writing, in English, by way of a sanction letter or otherwise, the amount of limit sanctioned along with all the terms and conditions including but not limited to the annualized rate of interest, method of application and interest chargeable for late repayment, if any.
  • At the time of sanction and/or disbursement of the loan amount, 5Paisa shall furnish a copy of loan agreement along with all enclosures quoted in the loan agreement to the Borrower and the Investors in their respective “My Account”section on the portal from where loan agreements can be downloaded by them.
6. Disbursement of loans including changes in terms and conditions
  • In the event of any change in the terms and conditions of the loan, (including disbursement schedule, interest rates, service charges, prepayment charges etc.) 5Paisa shall give notice to the Borrower in English. Such change shall be communicated to the Borrower on the registered email address provided by the Borrower in the loan application form. Any and all changes in the inter estrates and charges shall be effected only prospectively.
  • 5Paisa shall ensure that any decision to recall and/or accelerate payment or performance shall at all times be in consonance with the terms and conditions of the loan agreement executed with the Borrower.
  • 5Paisa shall release all securities of the Borrower only on repayment of all dues by such Borrower, or on realization of the outstanding amount of the Borrower’s availed loan. If such right of set off is to be exercised, the Borrower will be given a notice about the same with full particulars about the remaining claims and conditions under which 5Paisa shall be entitled to retain the securities till the relevant claim is settled or paid by the Borrower.
  • 5Paisa shall issue a No-objection certificate to the Borrower upon closure of loan within 15 (fifteen) working days from the completion of all related formalities
Fair Practices Code for Lenders

The following Fair Practice Code is applicable for lenders for participating on this 5Paisa platform.

  • Read the 5Paisa Policy and Terms and Conditions carefully and understand them properly before registering.
  • Honor all the commitments under any contract on this platform
  • In case of any default from borrowers, lenders will only deal with approved legal advisors and would not resort to any unfair and unethical recovery procedures.
  • Lenders will adhere to all applicable laws including income tax and pay appropriate taxes on the income so generated.
  • Lenders to understand and anticipate the risks associated with lending on this platform and ensure that there exists a likelihood of loss of entire principal in case of default by a borrower.
Fair Practices Code for Borrowers

The following Fair Practice Code is applicable for borrowers for participating on this 5Paisa platform.

  • Read the 5Paisa Policy and Terms and Conditions carefully and understand them properly before registering.
  • Not borrow money from our platform to lend on another platform.
  • The information and financial details submitted on our platform are true and correct.
  • They will not provide any information which is incorrect or materially impairs the decision of 5Paisa to register him / her on the platform.
Fair Practices Code for 5Paisa staff

The following Fair Practice Code is applicable for borrowers for participating on this 5Paisa platform.

  • KYC and Due diligence is required to be done for all the participants registered on this platform either as a lender or as a borrower.For this purpose, appropriate personal details as per the Company’s policy shall be collected from the participants.
  • Information of personal nature relating to the participants received by the platform will not be disclosed to any third party without the consent of the participant.
  • Lenders are made available with borrower’s details including personal identity, loan details and 5Paisa credit score to take informed decision before investing in any borrower.
  • Any borrower can be funded by any lender registered on the platform.
  • Maximum investment by a lender to a particular borrower should be capped to a maximum amount as specified by the regulator or at such a level to ensure more than 1 lender funds each loan; except where the loan is funded by HNI lenders /institutional lenders.
  • There is no discrimination in selection of borrowers and lenders. The credit scores arrived at by the platform is based on the financial behavior of a borrower and does not include factors such as gender, race or religion.
  • Employees or Directors of 5Paisa cannot lend on the platform.
  • Our staff and outsourced agencies are adequately trained to deal in an appropriate manner with defaulting borrowers. We will not resort to harassment or unethical practice like persistently bothering the borrowers at odd hours, use of coercion for recovery of loans, etc.
  • We ensure that there are mechanisms at various levels of the management to do periodic review of the compliance of the Fair Practices Code and the functioning of the grievances redressal.
7. General
  • 5Paisa shall merely facilitate the transactions contemplated on its Platform as per the terms and conditions of the loan agreement executed between 5Paisa, the Investors and the Borrowers.
  • In case of receipt of request from the Borrower for transfer of Borrower account, the consent or otherwise, i.e., objection of 5Paisa, if any, shall be conveyed to such Borrower within 21 (Twenty one) days from the date of receipt of the Borrowers request. Such transfer will be as per transparent contractual terms in consonance with all the applicable laws.
  • In the matter of recovery of outstanding dues of its Borrower, 5Paisa shall not resort to any undue harassment, that is, persistently bothering the Borrowers at odd/late hours or behaving rudely or aggressively, or use of muscle power for recovery of loans etc. 5Paisa shall take necessary steps to ensure that its employees and other representatives are adequately trained to deal with the Borrowers in an appropriate manner.
8. Interest Rate and Other Charges

5Paisa shall devise appropriate internal principles and procedures for determining interest rates and processing and other relevant charges and inform the same to the Borrowers and the Investors on a case to case basis.

9. Grievance Redressal Mechanism

5Paisa acknowledges the importance of efficient service to the Borrowers and the Investors on the Platform. At 5Paisa satisfaction of the Borrowers and the Investors is the prime focus. For this reason, 5Paisa has established a grievance redressal mechanism. This system will ensure that the redressal sought is just and fair and is in accordance with the applicable laws.The Board of directors of 5Paisa shall periodically review the compliance of this Code and the functioning of the grievances redressal mechanism at various levels of management. 5Paisa shall ensure that following details are displayed prominently in its offices including branch / sales offices, if any and on the Platform:

  • Procedure for receiving and addressing complaints and suggestions.
  • Name, address, contact number and e-mail address of grievance redressal officer, who can be approached for redressal of the complaint, along with the details of the officer-in-charge of the Regional Office of Department of Non-Banking Supervision of RBI under whose jurisdiction the registered office of 5Paisa falls
  • Time frame for resolving complaints by the Borrower or the Investors together with escalation matrix for escalating the complaint, in case the complaint is not resolved to the satisfaction of the Borrower or Investor within the specified time period. In any event, that Borrower or the Investor may file an appeal with the officer-in-charge of the Regional Office of India, Department of Non-Banking Supervision of RBI under whose jurisdiction the registered office of 5Paisa falls if the complaint/dispute is not redressed within a period of 1 (one) month.
10. Changes to the Code

Any amendments or change in this Code shall be uploaded on the Platform from time to time.