Non Banking Financial Company - Fair Practices Code

(A) Introduction:

Reserve Bank of India ("RBI") has, vide its circular dated September 28, 2006 and further circulars dated March 26, 2012 and February 18, 2013 advised all the non banking financial companies ("NBFC") to frame a fair practices code ("the Code").

RBI has prescribed broad guidelines on fair practices which, inter alia, include processing of application for loans, loan appraisal, disbursement of loans including changes in terms and conditions and certain other conditions which NBFCs need to follow.

(B) Background:

ICICI Securities Primary Dealership Limited ("I-Sec PD") is incorporated under the Companies Act, 1956 and is registered with RBI as a primary dealer. Being a primary dealer, I-Sec PD is also required to be registered with RBI under Section 45 IA of the Reserve Bank of India Act, 1934 as a non-deposit accepting NBFC.

(C) Applicability:

As per the RBI guidelines applicable to primary dealers, one of the core activities that a primary dealer can undertake is lending in call/notice/term/repo/CBLO market.

(a) Lending in Call/Notice/Term Money Market: In this market, I-Sec PD shall lend funds for a short duration to specified participants subject to dealing /exposure limits fixed for the counter parties by the Board of Directors of I-Sec PD. The rate of interest would be market determined. All call/notice money market deals are reported on Negotiated Dealing System ("NDS") irrespective of whether the counter party is a member of NDS or not thereby making the deals transparent.

(b) Lending in Repo market: I-Sec PD is permitted to lend in repo market to scheduled commercial banks, urban co-operative banks, other primary dealers, NBFCs, mutual funds, housing finance companies, insurance companies and any listed company holding SGL Account with RBI or a Gilt Account with a custodian. Repo transactions shall be undertaken only in Government dated securities, treasury bills and cash management bills as permitted by RBI from time to time. The exposure limits for the counterparties are approved by the Board of Directors of I-Sec PD. The repo transactions are required to be reported on the NDS and settled through the SGL Account /CSGL Account maintained with the RBI, with the Clearing Corporation of India Limited ("CCIL") acting as a central counter party.

(c) Lending under CBLO Market: As a Member of CBLO segment, I-Sec PD has a Constituent SGL (CSGL) Account with CCIL for depositing securities offered as collateral for borrowing/lending funds. CCIL provides an automated dealing system to all the members of CBLO segment through Indian Financial network (INFINET) to enable them to borrow and lend funds. The exposure limits for the counterparties are approved by the Board of Directors of I-Sec PD. CCIL acts as a central counterparty for both borrowers and lenders and there is no settlement risk involved as CCIL guarantees all the trades.

I-Sec PD has the appropriate grievance redressal mechanism within the organization to resolve disputes with its clients. Such a mechanism ensures that all disputes are heard and disposed of at the earliest.

I-Sec PD periodically reviews the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management. A consolidated report of such reviews shall be submitted to the Board of I-Sec PD on a quarterly basis.

Clients of I-Sec PD can forward their grievances to the Grievance Redressal Officer. The contact details of the Grievance Redressal Officer are as under:

Ms. Vanessa Fernandes
Tel. no.: 022-2288 2460/70

Clients shall have a timeframe of 30 days for preferring their complaints/ grievances to the Grievance Redressal Officer.

The contact details of the Regional Office of Department of Non Banking Supervision of RBI under whose jurisdiction I-Sec PD is registered are as under:

Reserve Bank of India
Department of Non Banking Supervision
Mumbai Regional Office
3rd Floor, Near Maratha Mandir
Byculla, Mumbai Central
Mumbai - 400 008