|Interest Rate Policy
|Issue and Effective Date
|6, April 2023
|Date of Next Review
|Within in 12 months from effective date
|Periodicity of Review
|Board of Directors
|Preface of this Policy
|Objective of this Policy
|Interest Rate Model
|Establishing the Interest Rate
|Principles Behind Charging Different Interest Rates
|Other Procedural Aspects
|Review of this Policy
The Reserve Bank of India, Master Direction - Non-Banking Financial Company -Non Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 dated 1st September 2016, as amended from time to time (RBI Regulations), had advised the Boards of Non-Banking Financial Companies (NBFCs) to outline appropriate internal policies and procedures to define their interest rates, processing fees, and other charges. The Direction was issued as a measure against the increasing complaints the Bank received against excessive interest rates and other charges levied by NBFCs on certain loan products.
The board of directors of FASHION TRADES & AGENCIES PRIVATE LIMITED (henceforth referred to as "Company" or "FTAPL") has designed a detailed interest rate policy (“the Policy”) in accordance with the master direction issued by the Reserve bank of India (including amendments thereof) to disclose their internal guiding principles, interest rate model, rate of interest, gradations of risk and rationale for charging different rate of interest to their borrowers.
The Company shall take this Policy into consideration while making all of its decisions regarding the determination of interest rates and other charges applicable to its loan offerings.
The primary objective behind drafting and adopting this policy is to decide on the principles, methodology and approach of charging spreads to arrive at final rates charged from customers and define the standard interest rates to be followed for different customer segments and loan offerings.
The FTAPL through this policy charge interest rates determined in a manner as to ensure the long-term sustainability of the business by taking into account the interests of all stakeholders and developing and adopting a suitable model for the calculation of a reference rate.
|Managing Director or CEO or WTD or executive director
|Chief Financial Officer
|Chief Risk Officer
The company lends its loans to clients shall be on Fixed Rates.
“FTAPL” being a diversified NBFC is engaged in the business of lending money through various products to cater to the needs of different customer segments. The primary target audience for the Company’s offerings include:
• Salaried Individuals
• Partnership Firm
• Micro Businesses
The interest rate shall be calculated by the Company after taking into account, factors such as cost of funds, margin, credit risk, Opex Cost, and other costs such as administrative expenses and profit margin. The Company shall also review this base interest rate periodically.
Further, the Company shall determine the interest rate applicable to each loan account based on different yardsticks such as tenure of the loan, borrower’s profile, borrower’s repayment capacity, past repayment track record of the borrower, etc.
The interest rate applicable to different loan products of the Company shall be determined by taking the following aspects into consideration:
Besides interest, the Company may levy additional financial charges such as loan processing fees, ,cheque bounce charges, ESC failure charges, penal interest charges, pre-payment/foreclosure charges on fixed interest loans, late payment fees, etc., wherever considered necessary.
Any change in the charges will inform borrowers in advance and apply prospectively.
The company can also levy penal charges or/and penal interest generally up to 2% per annum on the outstanding amount, as may be decided by the board of directors on delayed payment of instalments.
The Company shall adhere to the following procedural aspects with regards to the rate of interest charged on its different loan offerings:
a) In compliance with its Fair Practices Code, the Company shall disclose the rate of interest and its application form as well as in its Loan Sanction Letter explicitly.
b) The Company shall inform the borrower about their loan amount; annualised rate of interest and other details of the loan at the time of sanctioning the loan.
c) Other charges such as processing fees, additional interest charged on delayed payments and cheque bouncing charges shall also be mentioned in the Loan Agreement and sanction letter.
d) The annualised rate of interest shall be intimated to the borrower so that they are aware of the exact rates charged to the account.
e) The Company shall display its interest rate policy and interest rate structure for each loan product on its website.
f) The Company shall inform its customers about any increase in fees or charges via different communication channels such as SMS, email, website updates, publishing in appropriate newspapers, etc., at least one month prior from the date on which such change shall take effect.
This Policy shall be reviewed by the Company’s Board of Directors annually, or as and when any changes are necessitated to the Policy. The Chief Compliance Officer/Executive Director /or Committee may suggest changes or modifications to the Policy and present it before the Board for its approval and adoption.