Introduction

Ramaiah Capital Private Limited (hereinafter referred to as ‘the Company’) has framed the Interest Rate Policy (hereafter referred to as “Interest Rate Policy” ) in accordance with the regulatory requirements specified by the Reserve Bank of India (RBI).

Objectives of the Policy

This document aims to establish a framework for determining interest rates, processing charges and other charges. (All charges and rates mentioned herein are exclusive of Goods and Service Tax (GST) or any other applicable tax and the company shall charge and collect such taxes wherever applicable over and above mentioned charges and rates)

Methodology for determining Interest Rate

The guiding principles for determining interest rate are as follows:

The company shall adopt an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium, tenor of the loan and determine the rate of interest to be charged for loans and advances. The rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers shall be disclosed to the borrower or customer in the electronic application form and communicated explicitly.

The rate of interest shall be arrived at after taking into account relevant factors, such as cost of funds, margin and risk premium, including the following.

Tenor of the Loan – The rate of interest charged will depend on the term of the loan;

Internal Costs of Funds – The rate of interest charged will also be determined depending on the rate at which funds necessary to provide loan facilities to customers are sourced by the Company, normally referred to as internal cost of funds.

Internal Cost Loading – The interest rate charged will also take into account costs of doing business. Factors such as the complexity of the transaction, the size of the transaction and other factors that affect the costs associated with a particular transaction will also be taken into account before arriving at the final rate of interest quoted to a customer.

Credit Risk – As a matter of prudence, bad debt provision cost should also be factored into all transactions. This cost is then reflected in the final rate of interest quoted to a customer. The amount of bad debt provision applicable to a particular transaction will depend on the credit strength of the customer which shall be determined by the company based on certain parameters which are uniformly applicable.

Periodicity of Interest – Interest will be charged for the period as stipulated in the loan agreement, subject to any modifications thereto as may be agreed by and between the Company and the customer electronically.

The rate of interest is an annualised rate applied on a daily reducing balance so that the borrower is aware of the exact rates that would be charged to the account.

In respect of products carrying flat rate of interest the interest will be charged on the loan amount disbursed with out reducing the balance outstanding due to recovery and the method of charging interest will be made known to the borrowers.

General Provisions

Changes in Terms – The Company shall give electronic notice to the borrower in English language with an option to choose a vernacular language as understood by the borrower of any change in the terms and conditions of the loan, including disbursement schedule, interest rates, service charges, prepayment charges etc. Further, any changes in the rate of interest shall be effected only prospectively.

Interest will be payable by the customer / borrower on or before the due date stipulated therefor in the loan agreement entered into by the customer / borrower with the Company.

Moratorium - The Company may consider necessary moratorium for payment of interest and repayment of principal amount with proper built in pricing, on a case to case basis.

Additional Interest and other Charges - Besides the normal interest, the Company levies additional interest for delays in payment of dues by the customer / borrower or additional interest on other facilities etc (annualised interest on the outstanding balance). The Company may charge other financial charges including processing fees, cheque bouncing charges, pre-payment / foreclosure charges, inspection charges, bureau charges, contact point verification/due diligence charges etc RTGS or such other remittance charges, commitment fees, charges for services like issuance of “no due certificate”, etc along with relevant taxes which shall be made known to the customer.

Communication of Interest Rate to the Customer – The Company shall convey electronically to the borrower in English language with an option to choose a vernacular language as understood by the borrower, by digital means, the amount of loan sanctioned along with the terms and conditions including annualized rate of interest and method of application thereof and shall keep an electronic record of the acceptance of these terms and conditions by the borrower. The loan agreement shall expressly stipulate the penal interest chargeable for late payment / repayment of dues by the borrower, in bold. The apportionment of the equated monthly instalments (“EMI”) amount towards the principal and interest will also be communicated by the Company to the customer / borrower by way of the repayment schedule.

Waiver of Additional Interest / Financial Charges – Requests by the customer for waiver of additional interest / financial charges would normally not be entertained by the Company and such waiver will be at sole and absolute discretion of the Company.

Annualised Rates - The rate of interest shall be annualised rates so that the borrower is aware of the exact rates that would be charged to the account.

Pre-Payment - Pre-payment options available to the customer and the penalty payable for exercise of such option shall be mutually agreed to on a case to case basis and communicated to the customer.

The information published in the website or otherwise published shall be updated whenever there is a change in the rates of interest.

Though the primary mode of all operations, processes or procedures set in this Policy are electronic or digital in nature the company may at its discretion decide to use physical/written means for all or any points covered in this Policy.

Interest Rates and Change in Terms and conditions

Any changes in the terms and conditions, or charges or interest rates shall be conveyed to the borrowers.

Changes in charges or interest rates shall apply only prospectively.

The rates of interest shall also be made available on the web-site of the Company.  The information published in the website or otherwise published shall be updated whenever there is a change in the rates of interest.

The rate of interest shall be annualised so that the borrower is aware of the exact rates that would be charged to the account. The type of interest and the method of application shall be made known to the borrowers.

Annual Percentage Rate (APR) - APR as all-inclusive cost of  loans for the borrower and this shall be disclosed upfront and shall also be a part of the Key Fact Statement.

Interest will be charged only from the date of disbursement of funds to the borrower and not from the date of sanction/ date of execution of loan agreement or from the date of issue of cheque to borrower.

In the case of disbursal or repayment of loans during the course of the month, interest will be charged only for the period for which the loan was outstanding.

In case one of more instalments are collected in advance interest will be charged only for the amount disbursed less the advance instalment/s collected and not on the full loan amount.

Penal Interest shall not be charged however Penalty,  for non payment/delayed payment of instalments and / or non-compliance of material terms and conditions of loan contract by the borrower shall be treated as ‘penal charges’ and shall not be levied in the form of ‘penal interest’ that is added to the rate of interest charged on the advances.

There shall be no capitalization of penal charges i.e., no further interest shall be computed on such charges

The quantum of penal charges shall be reasonable and commensurate with the noncompliance of material terms and conditions of loan contract without being discriminatory within a particular loan / product category. In any case the penal charges shall not exceed 10% of the amount due amount which is not paid by the customer on the due date plus applicable GST.

The penal charges in case of loans sanctioned to ‘individual borrowers, for purposes other than business’, shall not be higher than the penal charges applicable to nonindividual borrowers for similar non-compliance of material terms and conditions.

The quantum and reason for penal charges shall be clearly disclosed  to the customers in the loan agreement and most important terms & conditions / Key Fact Statement (KFS) as applicable, in addition to being displayed website under Interest rates and Service Charges.

Whenever reminders for non payment of intalments and / or non-compliance of material terms and conditions of loan are sent to borrowers, the applicable penal charges shall be communicated. Further, any instance of levy of penal charges and the reason therefor shall also be communicated.

Regulatory Reference

This policy is framed as per the prevailing regulatory references and in accordance with leading industry practice:

Interest rate and other charges framework:

All applicable charges will be made known to the customer in clear unambiguous and transparent manner.