Policy for Determining Interest Rates, Processing & other Charges
- Purpose
The Board of Directors of Manjira Finance Private Limited (“the Company”) will be guided by this Policy while deciding/ fixing interest rates, penal charges, pre-payment charges, processing charges etc. of the Company.
This policy is in accordance with the Fair Practices Code and other applicable regulatory
requirements prescribed by the Reserve Bank of India (RBI). The Company ensures fair practice and transparency to its customers and accordingly range of rates of interest and the approach for gradation of risks will also be published on the Company’s website (www.manjirafinance.com).
- Policy for Determination of Rate of Interest
2.1 Benchmark Rate of Interest of the Company will primarily be based on the following
factors:
a) Cost of Funds: The cost of funds varies according to market conditions thus pricing
of the loans is largely impacted by any change in the cost of funds.
b) Operating Expenses
c) Fair Profit margins
2.2 Additional margins on the benchmark rate of interest may be applied for a particular
loan facility considering the following factors:
i) Type of Loan
ii) Tenor of facility
iii) Perceived Industry risk and current level of Rate of Interest in the market for
similar lending activity
iv) Quality of Security/ Collateral
v) Internal, External Credit Rating and Credit-worthiness of the borrower
vi) Profile of Customer: Customer profile which includes their experience, educational
qualifications, market reputation, business profile, financial profile, business model,
etc. is also an important factor in deriving the interest rate for the loans.
2.3 Annualized Rate: The Company will communicate annualised Rate of Interest to all its
borrowers so that its borrowers are aware of exact rates that will be charged to
respective loan facility.
2.4 Ceiling on Interest Rate: The Company will ensure that applicable rate of interest to
any borrower should not exceed the maximum rate fixed for each product offered by the
Company.
2.5 Penal Interest: The Company will mention penal interest charged for late repayment in
bold in the loan agreement/ Sanction letter.
- Pre-payment charges
The Company will ensure compliance with the regulatory requirements while charging
pre-payment penalty for early closure of any of the loans.
- Processing/ Documentation and other Charges
These charges may vary based on the type of loan, the exposure limit, expenses incurred
towards sourcing and processing of customers’ loan proposals and generally represent the
cost incurred in rendering services to the customers.
- Disclosure and Transparency
The Rate of Interest, Fee and Charges will be expressly stated in the Loan Agreement or the
Sanction Letter. The Company will provide information on Rate of Interest, common fees and charges through any one or more of the following media:
a) Letters or Schedules of charges to the customers;
b) Putting up notices at all our branches;
c) Through telephone or helplines;
d) On the Company’s Website (www.manjirafinance.com);
e) Through designated staff/ helpdesk.
6. Authority
The Manjira Finance or any group officials to whom powers have been delegated by the Board may
decide the following:
i) Methodology for computation of Benchmark Floating Reference Rate;
ii) Range of Rate of Interest for various products;
iii) Fee and Charges.