Introduction
 

In interest of the customers and consistent with the Master Directions DNBR.PD.007/03.10.119/2016-17 (and any subsequent revisions) by Reserve Bank of India, we lay down here the Interest Rate Policy (“Policy” hereafter) for Kalpavitta Finance Private Limited (“We”, or “Company” hereafter). The Policy aims to make the interest rate setting criteria clear and transparent.
 

Determining Interest Rates
 

The rate of interest shall be arrived at after taking into account relevant factors, such as:

1. Tenor of the Loan - The rate of interest charged will depend on the term of the loan.

2. 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 cost of funds.

3. Operating Costs & Margin - The interest rate charged will also take into account costs of doing business and expected margins. Factors such as the complexity, 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.

4. Credit Risk - Credit risk is determined from customer factors like financial, credit and demographic as well as factors like loan structure, geography and other available data points. Interest rate will be determine based on the credit risk assessed by the relevant teams. Loan loss provision cost should also be factored into all transactions which reflects in the final rate of interest quoted to a customer. The amount of provision applicable to a particular transaction may depend on the credit strength of the customer.

5. Fixed versus Floating – Interest rates would be fixed and as per industry standard, calculated on a reducing principal.

6. 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.
    

General
 

The following provisions shall apply to loans extended by the Company:

1. Changes in Terms - The Company shall give notice to the borrower in English / vernacular language if needed 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. The same may be communicated through electronic media or any other form of communication by the Company.

2. No Grace Period - nterest 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. No grace period will be allowed to the customer / borrower for payment of interest, unless the loan agreement expressly provides for the same or the Company’s Credit Policy allows to provide such grace period to the customer / borrower.

3. 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.

4. Additional Interest and other Charges - Besides the normal interest, the Company may levy additional interest in the form of penal interest for any delay or default in payment of dues by the customer / borrower or additional interest on other facilities etc. The Company may also levy other charges including processing fees, cheque / ACH / ECS bouncing charges, pre-payment / foreclosure charges, RTGS or such other remittance charges, commitment fees, charges for services like issuance of “no due certificate” etc. Notwithstanding the foregoing, as a measure of customer protection, the Company shall not charge foreclosure charges / pre-payment penalties on all floating rate term loans sanctioned to individual borrowers.

5. Communication of Interest Rate to the Customer - The Company shall convey in writing to the borrower in English / vernacular language if needed, by means of a sanction letter or electronic mail, the amount of loan sanctioned along with the terms and conditions including annualized rate of interest and method of application thereof and shall keep on record the acceptance of these terms and conditions by the borrower.

6. 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 Credit Committee, exercised on a case to case basis, consistent with the Company’s policies, or by any other person that the credit committee deems fit.

7. Annualised Rates - Interest would be quoted as annualized, so that the borrower is aware of the exact rates that would be charged to the account. Rate can be quoted in flat or reducing space, with appropriate clarification.

8. Pre-Payment - Pre-payment options available to the customer and the penalty payable for exercise of such option shall be communicated to the customer.

9. Reasonable Rates - The Company shall charge rates that are reasonable considering the customer profile, loan structure and other relevant information. In some cases a part of / full interest can be borne by a third party under a subvention model. In this case the actual customer interest outgo is kept in mind to determine a reasonable rate.
    

Company Website
 

Interest Rate Policy, Fair Practices Code and Grievance Redressal Policy along with details of Grievance Officer are available on the Company website www.kalpavittafin.in.
 

Amendments to Interest Rate Policy
 

Amendments to this Interest Rate Policy will not be effective, unless the amendments have been approved and authorised by either the board of directors of the Company or the Credit Committee comprising, amongst other people, the Chief Risk Officer.