Interest Rate Policy
Purpose & Regulatory Background
- The policy is created in line with RBI's Scale-Based Regulation Master Directions (2023), which mandate NBFCs to adopt a transparent interest rate model considering cost of funds, margins, and risk premium
- It ensures regulatory compliance, transparency, fairness, and proper disclosure to borrowers
- The policy is updated based on any RBI circulars, directions, or regulatory changes
Objectives & Interest Rate Model
The policy aims to ensure market-aligned, transparent, fair, and sustainable pricing of all loan products.
Interest rate computation includes:
- Weighted Average Cost of Funds (WACF) – cost of equity + cost of debt
- Opportunity cost of cash reserves
- Operating cost net of processing fees
- Net credit risk premium based on borrower segment risk, default history, and recoveries
- All components are annualised to derive final applicable loan interest rates
Interest Rates, Processing Fees & Penal Charges
Interest Rates
- Maximum normal loan interest: up to 32% p.a. (excluding compounding wherever applicable)
- Rates vary by customer based on risk, credit profile, location, loan type, tenure, and market factors
- Product-wise interest ranges:
- Gold Loans: 8% – 28%
- Unsecured Loans: 18% – 32%
- Secured Loans: 18% – 28%
- Rates reviewed monthly / quarterly depending on market and regulatory changes
Processing Fees
- Processing fee: 2% (excluding GST)
- Can vary by location, segment, loan size, risk, or operational cost
- Fully disclosed in loan documents
Penal Charges
- Penal charges apply only after normal loan tenure
- Capped at maximum 3% p.m. on overdue amount
- Not compounded
- Cheque bounce/NACH/ECS charges also applicable
- Applied after 15 days' notice to borrower
Other Charges, Notices & Risk-Based Pricing
- Other charges include bounce charges, prepayment/foreclosure fees, and additional charges with prior notice
- Any change in interest rate or charges is communicated to the borrower in their language and applied only prospectively
- Risk Gradation: Loans are priced based on borrower profile, repayment capacity, financial data, credit bureau score, collateral quality, payment mode, and market benchmarks
- Detailed risk checks include KYC, past repayment behavior, income stability, GST/EPFO database checks, and location-level delinquency patterns
Policies, Disclosure & Review
- The Interest Rate Policy aligns with the company's Loan Policy, which defines appraisal, approval, and risk guidelines
- Borrowers receive complete details of loan terms, charges, agreements, and sanction letters in English and local language
- The policy is available on the company website
- Annual review by the Board (or earlier if regulations change)
- In case of conflict with law, regulatory provisions override the policy
FAQs
Interest rates are determined based on cost of funds, operational costs, risk assessment, and market conditions. We follow a risk-based pricing model approved by our Asset Liability Committee.
We offer both fixed and floating interest rate options. Fixed rates remain constant throughout the loan tenure, while floating rates are linked to external benchmarks and may change over time.
For floating rate loans, you will receive a minimum 30 days advance notice of any rate changes through SMS, email, or written communication. Rate changes are implemented prospectively.
No, we maintain complete transparency in interest calculation. All charges including processing fees, insurance premiums, and other applicable charges are clearly disclosed upfront.
Yes, we offer preferential rates for existing customers, bulk borrowers, and certain customer segments based on their relationship and risk profile with us.
Current interest rates are displayed at all our branch offices and updated regularly on our website. You can also contact our customer service for the latest rates.