Interest Rate policy

1.    Introduction & Scope

To ensure healthy and sustainable growth of the Company as well as highest standard of Customer satisfaction & confidence in our Financial Services, we are setting Principles, Procedures and System for determining the Rate of Interest / Business Schemes, processing fee and other charges.

In addition to our internal policy, this is also in compliance with 'Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 issued by RBI vide Circular No. DNBR. PD. 008/03.10.119/2016-17 dated September 01, 2016' (as amended from time to time) read with RBI Circular No. DNBS.PD/CC. No 95/03.05.002/2006-2007 dated May 24, 2007 & Notification No. DNBS.204/CGM (ASR) - 2009 dated January 2, 2009 (hereinafter "RBI Directions"), in respect of Appropriate Internal Principles and Procedure in determining the Rate of Interest and fixing of Processing and other Charges and appropriate systems for implementation thereof (hereinafter "Policy").

To ensure healthy and sustainable growth of the Company as well as highest standard of Customer satisfaction & confidence in our Financial Services, we are setting Principles, Procedures and System for determining the Rate of Interest / Business Schemes, processing fee and other charges.

In addition to our internal policy, this is also in compliance with 'Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 issued by RBI vide Circular No. DNBR. PD. 008/03.10.119/2016-17 dated September 01, 2016' (as amended from time to time) read with RBI Circular No. DNBS.PD/CC. No 95/03.05.002/2006-2007 dated May 24, 2007 & Notification No. DNBS.204/CGM (ASR) - 2009 dated January 2, 2009 (hereinafter "RBI Directions"), in respect of Appropriate Internal Principles and Procedure in determining the Rate of Interest and fixing of Processing and other Charges and appropriate systems for implementation thereof (hereinafter "Policy").

2.    Application

This policy applies to ALCO ( Asset-Liabilities committee), Wholesale Risk/Retail Risk teams, Sales and Product Teams. They are required to acknowledge having read the policy document and sign a letter of spirit of adherence to the policy in the normal course of business. 

3.    Principles for determining interest rates

Mamta Projects Pvt Ltd., follows a discrete interest rate model / policy whereby the rate of interest for same product and tenor availed during same period by customers would not be a standardized one but could be different for different customers depending upon consideration of any or combination of, but not only restricted to the factors which are listed below- 

 

The interest rates would be offered on fixed, floating - (variable) basis. The floating rates would be decided on periodic intervals at monthly / bi monthly / quarterly intervals depending upon various market factors and also on an ad-hoc basis, in case of some specific events leading to a change in the cost of borrowing or profitability of the company. Any revision in the Company’s interest rates applicable to business would be reviewed and approved by the ALCO Committee.

While determining Business Schemes, Rate of Interest (ROI), Processing Fees (PF), Documents Charges and other Charges, following factors will be considered:

  1. Weighted Average Cost of Funds/Borrowings – incremental and overall; Fixed &   Variable Costs; Reasonable Margin to cover regulatory requirements of provisioning, Capital charge & Profit margin to sustain in the business; Risk Premium; Prevailing Competitive Economic and Financial Scenario; Conformity to Asset Liability Guidelines of the Company.

  2.  Profile of the customers, qualification, Subventions, Schemes, Promotion Campaign, Subsidies available, permitted deviations, Ancillary business opportunities and the future potential business anticipated by the Management.

  3. Group strength and value to lender group, overall customer yield, nature and value of primary and collateral security, past repayment track record of the customers; Risk strategy of each business and product vertical, prevalent market trends on interest rates and charges; 

  4. Various risk factors associated with each customer segment; overall micro and macroeconomics pertinent from time to time; forward looking forecast basis past trends; the overall behaviour of the portfolio, its bucket movements and collections efficiencies; losses arising out of recoveries and repossession cum sale of assets; customer segment and individual customer level profitability, 

  5. Fixed and Floating rates both to be considered and reviewed /reset every month/bi-monthly/quarter considering the strategy, company performance, market dynamics and Risks (market, operational, customer risks). 

  6. The benchmark for floating interest rates would be the FRR (Floating Rate Reference), which would be SBI MCLR rate and is proposed at SBI MCLR + 900 basis points, which is to be reviewed from time to time. Fixed rate of interest for some products would be decided based on the customer segment, product tenure, and product specific risks, besides being in line with market rates being offered to similar customer segment on these product categories. 

4.        Internal Procedure/Appropriate System for Determining the ROI

To decide ROI and Schemes, periodically ALCO will review various factors (as mentioned above) and will decide Company's benchmark lending rates. 

5.    Principles of Transparency, Fairness, Incentive to Service the Debt on Time

  1. Interest rates would be intimated to the customers in English and in vernacular or in the language understood by the customer at the time of sanction/ availing of the loan.

 

  1. Interest rate would also be mentioned  in the Statement of Account sent to the Customer from time to time . 

  2. The interest reset period in case of variable loans would be decided by Mamta Projects Pvt Ltd., from time to time. At the time of interest reset, wherever applicable (for instance in Floating Home loan rates), the customer would be offered either a change in tenor or a change in the EMI amount, as decided by the ALCO or prevalent regulatory guidelines. 

  3. The interest could be charged on either daily, or monthly or longer rests based on the product, market dynamics, competitive practices and risk strategy of the company. 

  4. The interest shall be deemed payable immediately on the due date as      communicated and no grace period for payment of interest is allowed unless communicated to the customer explicitly in the sanction letter, specific to some products, with a defined period of any principal and/or interest moratorium. 

  5. Interest changes would be prospective in effect and intimation of change of interest or other charges would be communicated to customers in a mode and manner deemed fit by Mamta Projects Pvt Ltd., as also in line with any regulatory conditions and in case of the Floating interest rate, change of interest will be communicated one month in advance in a mode and manner deemed fit by Mamta Projects Pvt Ltd., as also in line with any regulatory conditions, and the revised rates will be applicable from subsequent month.

  6. Uniformity in the Schemes will be maintained for the rate of interest & charges for all the Customers covered under particular scheme, profile and category. However, they may vary based on Risk Gradation, Portfolio Performance etc.

  7. In case of staggered disbursements, the rates of interest would be subjected to review and the same may vary according to the prevailing rate at the time of disbursements or as may be decided by Mamta Projects Pvt Ltd. 

6.    Default in Payment of Instalments / Other Dues

Customers shall be liable to pay all applicable charges including but not limited to Cheque Bouncing Charges (CBC), Late Payment Penalty (LPP), Recovery / Legal Charges etc., in case of default in payment of Instalments / other dues. Company shall disclose these charges to its Applicants / Borrowers via various types of documents like Application Form, Sanction Letter, and Loan Agreement, which would also be displayed on the company’s website in the Schedule of charges.

If any change is introduced in the above charges based on economic or financial scenario etc., Company shall notify the Customer in the language as understood by the Customer about such changes as also the effective date from when the revised rates are being made applicable.

7.    Schemes as per Credit worthiness of the Customer

On the basis of credit worthiness of the Customer, Quantum of Loan, Interest, Charges and Schemes prevalent shall be disclosed to the Customer with a view to help them in choosing the Scheme as per their interest. The company endeavours to have a risk-based pricing which could lead to different rates for different customers for the same product offering.

8.    Processing / Documentation and Other Charge

All processing / documentation and other charges recovered are expressly stated in the Sanction Letter and Loan Agreement. They vary based on the asset financed, the exposure limit, tenor, expenses incurred in the geographical location, customer segment and generally represent the cost incurred in rendering services to the customers. 

 

Besides interest and Processing / Documentation fees, other financial charges like origination fees, cheque bouncing charges, late payment charges, re-scheduling charges, pre-payment / foreclosure charges, part disbursement charges, cheque/NACH swap charges, security swap charges, charges for issue of statement account etc., would be levied by the company wherever considered necessary. Besides these charges, stamp duty, Goods and Service Tax and other cess would be collected at applicable rates from time to time as communicated in the documentation provided. Any revision in these charges would have a prospective effect and will be communicated with the borrower, in line with the RBI guidelines.  While deciding the charges, the practices followed by the competitors in the market would also be taken into consideration in addition to the factors listed in Clause 3 above.

9.    WAIVERS/REFUNDS

No claims for refund or waiver of such charges/ penal interest / additional interest would normally be entertained by Mamta Projects Pvt Ltd., and it is the sole discretion of Mamta Projects Pvt Ltd. to deal with such requests, if any, which would be decided by authorised officials/committees on a case to case basis. 

10.    EXCEPTION APPROVAL & REVIEW

The Board of Directors of Mamta Projects Pvt Ltd. would review the policy based on business requirements. Any deviations to the policy would be approved as per Board approved Delegation of Authority. Claims for refund or waiver of charges / penal interest / additional interest would normally not be entertained by the company and it is at the sole discretion of the company to deal with such requests.

11. DISPLAY

In conformity to the Fair Practice Code, this policy shall be displayed at the Company’s website for the information of the Customers of the Company.