BACKGROUND
This Interest Rate Policy (“Policy”) is framed in accordance with:
• Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023, as amended from time to time
• RBI guidelines on Fair Practices Code, Interest Rate Model, and Penal Charges
The Board of Directors of Ricavi Finance Private Limited (“the Company”) has approved this Policy to ensure transparency, fairness, and consistency in charging interest and related fees to borrowers.
OBJECTIVE OF THE POLICY
The objectives of this Policy are to:
• Lay down a transparent Interest Rate Model
• Ensure risk-based pricing of loans
• Clearly disclose interest rates, fees, and penal charges to borrowers
• Comply with RBI requirements for customer protection and fairness
SCOPE & APPLICABILITY
This Policy shall apply to all loan products offered by the Company, including but not limited to:
• Corporate Loans
• Personal Loans
• Retail Loans
• Two-Wheeler Loans
• Mortgage / Secured Loans
Loans are sanctioned through traditional/physical lending processes.
INTEREST RATE MODEL
The Company follows a risk-based pricing model. The interest rate charged to a borrower shall be determined after considering the following factors:
a) Cost Factors
• Cost of funds
• Operating and administrative expenses
• Margin requirements
b) Risk Factors
• Credit profile and repayment capacity of the borrower
• Past repayment track record
• Tenure of the loan
• Nature, quality, and value of collateral/security
• Type and end-use of the loan
• Market and sectoral risks
• Regulatory and compliance risks
• CIBIL / Credit Bureau score (for individual borrowers)
c) Relationship Factors
• Length of relationship with the borrower
• Overall exposure to the borrower/group
• Group strength (in case of corporate loans)
APPROACH FOR GRADATION OF RISKS
Borrowers shall be classified into appropriate risk categories based on the parameters mentioned above. Different interest rate spreads may be applied for different risk categories, ensuring consistency and objectivity
RATE OF INTEREST
• The Company currently offers loans at fixed rates of interest, unless otherwise specified in the loan agreement.
Interest Rate Range (Indicative and subject to change based on risk assessment and market conditions):
o Minimum: 17.00% per annum
o Maximum: 22.50% per annum
All interest rates communicated to borrowers shall be expressed on an annualised basis to enable borrowers to understand the total cost of borrowing.
The exact rate applicable to a borrower shall be communicated in the sanction letter and the loan agreement.
DISCLOSURE TO BORROWERS
The following shall be disclosed clearly and upfront to borrowers:
• Rate of interest (annualised)
• Method of application of interest
• Processing fees and service charges
• Prepayment / foreclosure charges, if any
• Penal charges, if applicable
These details shall be mentioned in the sanction letter, loan agreement, and key fact statement, wherever applicable
PROCESSING FEES & OTHER CHARGES
• Processing fees, service charges, and any other applicable charges shall be reasonable and non-discriminatory.
• All such charges shall be communicated upfront to the borrower.
• Any change in charges shall be applied prospectively and duly informed to the borrower.
PENAL CHARGES (AS PER RBI GUIDELINES)
Penal charges, if levied, shall be reasonable, proportionate, and non-discriminatory, and shall be imposed only as a deterrent for non-compliance with material terms of the loan agreement. and not as a revenue enhancement mechanism.
CHANGES IN INTEREST RATES
• Any change in interest rates or charges shall be effected prospectively.
• Borrowers shall be informed of such changes through appropriate communication modes.
REVIEW & GOVERNANCE
• This Policy shall be reviewed at least annually or earlier, if required due to regulatory or business changes.
• Any modification to this Policy shall require Board approval.
WEBSITE DISCLOSURE
This Interest Rate Policy shall be displayed on the Company’s website and shall be made available to borrowers on request.
REGULATORY OVERRIDE
In case of any inconsistency between this Policy and RBI regulations, RBI directions shall prevail.
The Policy shall stand amended automatically to the extent required by any change in RBI guidelines.
FOR AND ON BEHALF OF RICAVI FINANCE PRIVATE LIMITED
NAME: CHIRAG DESAI
DESIGNATION: WHOLE-TIME DIRECTOR
DIN: 08178002