Interest Rate Policy

Background

This policy is intended to be representative of Indiumplus Financial Services Pvt Ltd (‘Indium’ or ‘the Company’) guiding philosophy of dealing with customers in a transparent and an open manner.

RBI vide its Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 RBI/DoR/2023-24/106 DoR.FIN.REC.No.45/03.10.119/2023-24 dated October 19, 2023 under its Fair Practices Code advised NBFC to lay out appropriate principles and procedures so that usurious interest, including processing and other charges are not levied on loans and advances.

Indium has hence documented its Interest Rate Policy / Model, which lays down internal principles and procedures in determining interest rates on the loan products offered by Indium.

Methodology of Arriving at Interest rate for Loans and Approach for Gradation of Risk:

  1. The Company has its own model for arriving at lending interest rates. The lending interest rates to the customer are determined based on multiple factors including, but not limited to, cost of borrowed funds, cost of operations, liquidity conditions prevailing in the market, credit risk arising from the borrower or pool of borrowers and the expected return on assets.
  2. The customer level credit risk premium as mentioned above shall be based on credit and default risk of the customer as assessed by our proprietary risk model, which considers amongst other factors : profile & risk rating of customer, earning and repayment ability of the customer, nature and value of security / collateral, direct and indirect costs involved, repayment track record of the customers in case of existing customers, credit bureau ratings of the customers , industry trends, deviations permitted, future potential. Such information is gathered based on the information provided by the borrower, credit reports, data sources and market intelligence.
  3. Additional factors that influence the rate of interest include type of loan product, loan size, loan tenor, any subventions available, historical performance of similar borrowers, geographic location.
  4. Based on the above, the rate of interest can vary significantly from one customer to another for the same product and tenor. Similarly, the same customer can be charged different rates for different products at the same time, or different rates for the same product taken at different points of time.
  5. For products where partial drawdown is allowed, the Company reserves the right to modify the rate of interest based on prevailing conditions at the time of each such partial drawdown on a prospective basis.
  6. Currently, only fixed Interest rate loans are being offered by the company. Introduction of floating rate loans or hybrid interest rate loans shall be duly intimated on our website and incorporated in our marketing documents.
  7. The interest could be charged on daily, weekly, biweekly, or monthly rests for different products / segments.
  8. Besides regular interest, the company may levy Penal Chargesfor delay or default in making payments of any dues. These Penal Charges will be in line with the applicable Penal Charge policy and in compliance with regulatory guidelines. These shall be communicated to the customers at the time of sanction of loans and also incorporated in the loan documents.
  9. Annualized Rates of interest on unsecured products shall not exceed 34% per annum and on secured products shall not exceed 24% per annum. Any revisions to these caps will be at the sole discretion of Company.
  10. Claims for refund or waiver of charges / penal charges / additional interest would normally not be entertained by the Company and it is at the sole discretion of the Company to deal with such requests. Genuine refund claims are processed by the Company and any additional amount received in addition of due amount is refunded to the borrowers.

Processing Fees and other Charges

Besides interest, the Company charges the following:

  1. Processing fees ranging between 0% to 5% – Processing fees in this range may vary depending upon tenor, loan amount, sourcing category and other factors.
  2. NACH /UPI bounce charges: Rs. 500 per bounce
  3. NACH /UPI bank account change: Rs. 500 per instance
  4. Penal Charges – The Company shall levy 24% per annum as a penal charge for any delay or default in payments. The penal charge shall be reviewed periodically by the Company and approved by the Board. There will be no capitalization of penal charges, and all regulatory guidelines will be adhered to.
  5. Pre-payment / foreclosure charges ranging between 0 to 5%.
  6. Collections and legal charges will be applicable for any overdue loan collections.

In addition to these charges, stamp duty, GST, and other cess, if any, will be collected at applicable rates from time to time, as communicated in the documentation provided. Details of all these charges will be mentioned in the loan agreement and the sanction letter / Key Facts Statement.

Such charges shall be reviewed from time to time based on the Company policy and market practices. Any revision in these charges will have a prospective effect and will be communicated to the borrower. While determining the charges, market practices and industry standards will also be taken into consideration.

Review of the Policy

The Policy will be reviewed at yearly intervals or as and when considered necessary by the Board of the Company.