Board approved
Interest Rate Model/ Policy followed by Navin Bros. Pvt. Ltd.
The provisioning
norms pertaining to NBFC have been covered RBI’s Master Direction – Non-Banking
Financial Company – Non-Systemically Important Non-Deposit taking Company
(Reserve Bank) Directions, 2016 bearing circular no.
DNBR.PD.007/03.10.119/2016-17 dated September 01, 2016 (as updated from time to
time). The policy has been updated according to this regulation and amended and
updated from time to time. As per various notification and circular Navin Bros.
Pvt. Ltd. (hereinafter referred to as “NBFC/Company”) to approve an Interest
rate model for the NBFC and also to make available the rates of interest and approach
for gradation of risk on website of the NBFC.
Based on the
above mentioned directives of the RBI, this Interest Rate Policy (“Policy”)
of Navin Bros. Pvt. Ltd., has been developed for the determination of interest
rates applicable for Loan extended by the NBFC.
The main
objectives of this Policy are to:
i.
ensure that
interest rates are determined in such manner so as to ensure long term
sustainability of business by taking into account the interests of all
customers of the Company;
ii.
develop and adopt
a suitable model for calculation of the rate of interest;
iii.
enable fixation
of interest rates which are reasonable to all customers;
iv.
ensure that
computation of interest is accurate, fair and transparent in line with the
statutory requirements and industry practices;
v.
charge
differential rates of interest linked to the risk factors as applicable; and
vi.
facilitate
transition to income recognition norms that may be stipulated by RBI in future
and adoption of best practices.
The interest rate
charged to the borrower shall be based on the following broad parameters:
- Risk profile
of the borrower
- Tenor of the
Loan
- Cost of
borrowing funds – Internal as well as external
- Credit and
default risk in the related business segment
- Historical
performance of same/similar kind of customers
- Primary/collateral
security offered by client/ structure of the deal
- Prevailing
Interest rate trends in the money market
- Interest
rate offered by other NBFC’s in the industry
- Prevailing
Base Rate of major commercial banks
- Market
scenario relating to credit risk premium / default
- Industry /
Company Delinquency / NPA for type of product / nature of customer, etc.
- Internal
Cost of doing business including Administrative cost and profit margin
- Other
factors that may be relevant in each case.
The rate of
interest for the same loan product and same tenor availed during the same
period by different customers may vary for each customer based on consideration
of any or a combination of above mentioned criteria.
The interest
rates offered can be on fixed or variable basis and can be charged on flat or
reducing balance method.
The interest rate
could range between six to sixty eight percent on fixed or reducing the balance
rate method.
The Company may
charge the above mentioned rate range considering the Tenure, Cost of fund and
other relevant factors from time to time.
The interest re-set period for variable rate loans is yearly, March every year, unless
otherwise specified.
The interest could be charged on daily/weekly/fortnightly/monthly/quarterly/half-yearly/yearly rests for
different products/segments.
Interest rates would be intimated
to the customers at the time of sanction / availing of the loan and
EMI apportionment towards interest and
principal dues would be made available to the customer.
The interest shall be deemed payable immediately on the due date as communicated or as per loan
agreement and no grace period for payment of interest is allowed, unless
otherwise specified.
No interest
is payable on Credit Balance in
borrower’s account.
Any
revision in the NBFC’s interest rates applicable to business would be reviewed
by any one of the Director of the Company.
The
changes in the interest rates and related
charges would be prospective in
effect and intimation of change of
interest or other related charges would be given to customers in a mode and
manner deemed fit and intimated to customer at time of sanction.
Besides interest,
NBFC will levy other financial charges like processing fees, origination fees,
cheque bouncing charges, late payment charges, re-scheduling charges,
pre-payment / foreclosure charges, part disbursement charges, cheque swap
charges, security swap charges, charges for issue of statement account, credit
assessment, cash handling, ECS/ Direct Debit/ ACH mandate registration/ lodgement/
handling or for any other service provided by the NBFC or cost incurred by the
NBFC for the provision of services related to the loan granted to the
customers. Besides these charges, stamp duty, service tax and other cess would
be collected at applicable rates from time to time. Any revision in these charges would be prospective in effect. These fees and charges may vary based on
asset/commodity/amount financed, exposure limit, expenses incurred at the point
of sale, customer segment and generally represent the costs incurred in
rendering the services to the customer including administrative cost. These
charges for different products or facilities would be mentioned on sanction
letters issued to customer/borrower.
In case of delay in payment of any dues by the
Borrower, the agreed upon rate of
interest may be enhanced and
such enhanced rate of interest may be applied on the unpaid liability,
indebtedness or part thereof which is due but not paid on due date for the
period it remains unpaid.
All such fees and charges will be clearly communicated to the customer by
way of printing on sanction letter and present fees and charges
will also be published on the website
of the NBFC.
While deciding
the charges, the practices followed by the competitors in the market would also
be taken into consideration.
·
The Company may
levy any of the below mentioned fees, charges, etc. to the Borrower on case to
case basis :
(a) Loan Processing Charges / Convenience Fees | To be charged to the Borrower/s for all expenses
pertaining to documentation, Agreement, Marketing, Sourcing Cost, Admin, IT,
etc. |
(b) Transaction Expenses and Due Diligence expenses | To be charged to the Borrower/s for all expenses
pertaining to Legal, Valuation & Professional fees, due diligence, stamp
duty, admin, registration and other out-of-pocket expenses. |
(c) Default Charges | To be charged on the unpaid dues/liability at the time
of occurrence of default where the Borrower/Guarantor defaults on any terms
of the Agreement |
(d) Part Prepayment | To be charged on the unpaid dues/liability at the time
of prepayment where the Borrower wants to prepay the loan or part thereof. |
(e) Foreclosure | To be charged on the unpaid dues/liability at the time
of prepayment where the Borrower wants to foreclose the loan. |
(f) Cheque swapping charges | To be charged to the Borrower/s in each instance where
the Borrower/Guarantor is required to submit fresh cheque’s on account of
change in their Bank account for any reason whatsoever. |
(g) Cheque bouncing charges | To be charged to the Borrower/s in each instance that
any Cheque is dishonored (under any of the payment modes) and consequently
represented OR in each instance that a Cheque/ Pay Order/ demand draft is
presented when any Installment/s is/are not received by the Company by /upon
issue of debit instructions under the ECS method or Direct Debit method or
any other payment method (other than the PDC method) as selected by the
Borrower/s for any reasons whatsoever. |
(h) Documents Retrieval Charges | To be charged where the Borrower requests for
additional copies of documents executed |
(i) Switch fee for change in payment mode or Loan
option | To be charged where Borrower requests to switch the
method of interest rate applicability from variable to fixed or vice versa |
(j) Switch fee or change in Security/ies | To be charged where Borrower requests to switch the
security offered for the existing loan |
(k) Loan Reschedule charges | To be charged where the Borrower requests for
rescheduling of payment term within the tenure and without modifying the
terms of the of the existing loan |
(l) Loan Restructuring charges | To be charged where the Borrower is required to modify
the terms of the existing loan |
(m) Loan Recovery charge | To be charged for the expense incurred by the Company
to recover the dues including legal fees, duties, notices, advertisement, etc. |
(n) Insurance | To be charged based on product and Borrower profile
towards Insurance taken in the name of the borrower for life/ credit. |
(o) Late payment charges | To be charged where borrower fails to clear due on due
date |
The aim of the
Company to levy the abovementioned charges to encourage prompt and timely
repayment of dues of the company and to deter the borrower against intentional
delinquency/delay in honouring commitments. However, in deserving cases, such
additional / penal interest may be completely waived off or settled at much
lower rates as per decision of the company.
The NBFC may, at
its sole discretion, allow the prepayment/foreclosure of the Loan Amount
subject to certain conditions and on payment of prepayment/foreclosure
penalties by the Borrower.
Usually there are
no restriction on before allowance of pre-payment/ foreclosure of loan. However
the minimum number of instalments post
which pre-payment/ foreclosure is allowed
may vary based on products & tenure of loan and will be specified in the sanction letter.
The customers are
given 3 days Freelook period for loans in which the customer can foreclosure /
preclose the loan without any penalties or charges. However NBFC reserve to
charge pro-rata fees to compensate the fees / expenses it incurs on the loan
agreement. Such information will be specified in the sanction letter.
Claims for refund
or waiver of charges / penal interest / additional interest would normally not
be entertained by the NBFC and it is at the sole discretion of the NBFC to deal
with such requests on case to case basis only.
The
NBFC hereby retains the sole discretion to calculate and decide the risk
premium for every transaction, on a case to case basis. The NBFC shall, for the
purpose of grading the risk, take into account factors such as nature of loan,
credit worthiness of the customer, nature of security, customer’s profile,
repayment capacity, customer’s other financial commitments, past repayment,
tenure of the loan, location of the customer etc.
The NBFC shall also,
during the course of determining the gradation of risk and calculating the rate
of interest