Interest Rate Policy

1.Introduction

Aryakube Capital Private Limited (hereinafter referred to as “ACPL” or “the Company”) is registered with the RBI as a Non-Banking Financial Company and is classified as a Base Layer NBFC (“NBFC-BL”) under the Scale Based Regulatory Framework issued by RBI. Aryakube Capital Private Limited has framed the Interest Rate Policy (hereafter referred to as “Interest Rate Policy” or “the Policy”) in accordance with Chapter VII  of Master Direction RBI/DoR/2023-24/106, DoR.FIN.REC.No.45/03.10.119/2023-24 – Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023specified by the Reserve Bank of India (RBI).

2. Objective of the policy

The objective of the Policy is to standardize the methodology used to charge interest rate along with other charges, for different category of customers and to arrive at the final rates charged from the customers.

3. Interest rate model

• The Board of the company adopted an interest rate model taking into account relevant factors, such as cost of funds, margin and risk premium, including the following to determine the rate of interest to be charged for loans and advances.
  1. Internal and External Costs of Funds – The rate of interest charged will 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 internal cost of funds. From an external cost of funds perspective, the benchmark interest rate that may be used by the Company could be the 10-year Government of India bond rate or any other generally acceptable benchmark rate as adjusted for the rating spreads available in the markets. Such cost of funds would be considered in line with the tenor of loan being offered.
  2. Operating expenses – The interest rate charged will also take into account costs of doing business such asbranch related operations costs & any other expenses as considered necessary.
  3. Risk Premium – Base risk premium should be factored into all transactions & reflected in final interest rate to cover potential credit loss risk, and may vary by business, customer segment, geography, sourcing channel etc. Prices may vary depending upon internal assessment of likelihood of delinquency or potential loss from customer segments post considering factors mentioned in the Approach for gradation of risk section.
  4. Fixed rate versus Floating rate – The applicable rate of interest shall also be commensurate from the perspective of the fixed versus floating interest rate requirements of the customers.
  5. 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 electronically.

Parameter	Description
Cost of funds (i)	A%
Operating Expenses (ii)	B%
Risk Premium (iii)	C%
Final indicative rate (i+ii+iii)	X%

Above factors form the indicative basis to decide the interest rates. However, the final rate to be charged would be determined by the Managing Director.

4. Approach for gradation of risk

The rate of interest for various loans is arrived after adjusting for spread which shall be assessed on a case specific basis after evaluating various factors, inter-alia, based on the following:

1. Profile of the borrower;
2. Tenure of the loan;
3. Relationship with the borrower;
4. Repayment track record of the borrower in case of existing customer;
5. Future potential;
6. Group strength;
7. Nature of security;
8. Covenant structure;
9. Internal administrative costs;
10. Deviations permitted if any;
11. any other factors that may be relevant in a particular case and as deemed fit.

Such information may be gathered based on information provided by the borrower, credit reports and market intelligence, if any. The rate of interest for the same product and tenor availed during the same period by different customers need not be the standardized one. It could vary for different customers depending upon consideration of all or any combination of above factors. The final risk pricing shall be determined by the Managing Director. The indicative range for Interest rates charged for various categories of corporate loans sanctioned by ACPL is as follows:

Type of loan	Final lending rate
Secured or strong negative covenants with high balance sheet cover	10-15%
Unsecured	12-25%

5. General Provisions

• The applicable interest rate shall be mentioned in the sanction letter provided to the borrower.
• Changes in Terms – The Company shall give written notice to the borrower in English language with an option to choose a vernacular language as understood by the borrower of any change in the terms and conditions of the loan, including disbursement schedule, interest rates. Further, any changes in the rate of interest shall be effected only prospectively and the loan agreement shall contain the necessary provisions in this regard.
• 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.
• Penal charges – Penal charges shall be levied as per the Fair Practices Code
• Other fees/charges – Besides interest, other charges like processing fees, cheque bouncing charges, prepayment/foreclosure charges, loan cancellation charges etc. would be levied by the Company wherever considered necessary. Besides the base charges, the applicable GST and other cess would be collected at applicable rates from time to time. Any revision in these charges would be with prospective effect. A suitable condition in this regard would be incorporated in the loan agreement.

The fees/charges charged by the Company on the Customer is as per below:

Sr No	Particulars	Charges
1	Processing charges	Negotiable on case-to -case basis
2	Stamp duty	As per actuals
3	Cheque bounce charges	Rs.2,000/ + GST
4	Swapping charges	Rs.2,000/ per swap together with GST
5	Loan cancellation charges (exclusive of other charges)	Rs.10,000/- + GST
6	Legal and other statutory Expenses	As per actual, where applicable

 

• Annualised Rates – The rate of interest shall be annualised rates so that the borrower is aware of the exact rates that would be charged to the account.
• Pre-Payment – Pre-payment options available to the customer and the penalty payable (only in case of Fixed rate loan) for exercise of such option shall be mutually agreed to on a case-to-case basis and communicated to the customer.

Though the primary mode of all operations, processes or procedures set in this Policy are physical/written means in nature the company may at its discretion decide to use electronic or digital means for all or any points covered in this Policy.

6. Administration, Amendment and Review of the Policy

This Policy may be altered/revised as per changes in the market scenario and/or statutory guidelines. The Policy shall be reviewed at least once in a year or as and when there are any amendments in the applicable guidelines.