Interest Rate Policy

Preface

  • As per the guidelines provided by the Reserve Bank of India (RBI) through circulars DNBS / PD / CC No. 95/03.05.002/2006-07 (May 24, 2007), DNBS (PD) C.C. No. 133/03.10.001/2008-09 (January 2, 2009), and DNBS.CC.PD.No.320/03.10.01/2012-13 (February 18, 2013), Non-Banking Financial Companies (NBFCs) are encouraged to establish transparent and well-defined policies for determining interest rates, processing charges, and other applicable fees.
  • In line with these directives, CashMyPayment, as a registered NBFC under the supervision of the Reserve Bank of India, has developed and implemented internal policies, procedures, and methodologies for setting interest rates that align with good governance practices. These measures ensure fairness, transparency, and consistency in our lending operations.

Methodology for Determining Interest Rates

  • Base Interest Rate Calculation
    • The base interest rate is derived by considering several key factors such as the weighted average cost of funds, risk premium, and other relevant costs like administrative expenses and profit margin. This rate is the foundation upon which interest rates for individual loans are based.
  • Factors Affecting Interest Rates
  • The applicable interest rate for each loan is determined by assessing the following parameters:
    • Nature of the loan: The type of loan (e.g., secured vs. unsecured) and its tenure (short-term or long-term) will significantly influence the rate.
      • Customer’s profile: Factors such as:
      • Professional qualifications and job stability
      • Financial position and history of repaying loans
      • Credit reports and external ratings (CIBIL, Equifax)
      • Past relationship with CashMyPayment
      • Future business potential
    • Risk assessment: The inherent credit and default risks, particularly concerning specific sub-groups or customer segments, are taken into consideration when determining rates.
    • Industry trends: Our rates are also influenced by the competitive landscape and the offerings of other lenders in the market.
  • Periodic Review
    • The base interest rate is periodically reviewed by the Asset Liability Management (ALM) Committee to ensure it remains aligned with market conditions, financial trends, and the company’s objectives.
  • Customized Interest Rates
    • The interest rates for loans with the same product type and tenure may vary across customers. These variations are based on factors such as creditworthiness, loan tenure, collateral offered, and other individual considerations. Therefore, two customers may have different interest rates even for identical loans.
  • Loan Terms and Communication
    • At the time of loan sanctioning, CashMyPayment will communicate the following to the borrower:
      • Loan amount
      • Annualized interest rate
      • Repayment schedule and the monthly instalment amount

These details are outlined in the sanction letter or loan agreement for clarity and transparency.

  • Other Charges
    • Additional charges such as processing fees, penal charges for delayed payments, and cheque bounce fees will be clearly stated in the loan agreement. The loan agreement will also specify how these fees are applied and the conditions under which they may be incurred.
  • Interest Rate Flexibility
    • Interest rates are subject to change based on prevailing market conditions, internal risk assessments, and individual loan circumstances. CashMyPayment reserves the right to modify the interest rates as deemed necessary, particularly in response to shifts in the company’s risk perception, customer profile, or market dynamics.
  • Refund and Waiver of Charges
    • Refund or waiver requests for any charges or penal interest will generally not be entertained. Any such request will be considered at the sole discretion of CashMyPayment, and borrowers will be notified of the decision.
  • Rate Determination Framework
    • The rate of interest for each loan is linked to the base rate, which is determined based on factors like cost of funds, administrative expenses, and profit margin. A markup of 200 to 1300 basis points is added to the base rate depending on the borrower’s risk profile, the security provided, and the borrower’s market positioning.
      • For example, the interest rate range for customers typically falls between 12% and 36% per annum.
      • The interest rate is applied monthly, with the loan repayment structured accordingly.
faqs

Most Popular Questions

We help you see the world differently, discover opportunities you may never have imagined and achieve results that bridge what is with what can be.

In what areas do you provide management consulting?

Our associate consultants specialize in a range of business areas. These include strategic planning, issues resolution, culture assessment, board effectiveness, retention strategies.

In which countries do you provide consulting services?

Our associate consultants specialize in a range of business areas. These include strategic planning, issues resolution, culture assessment, board effectiveness, retention strategies.

How is a consulting project started and organized?

Our associate consultants specialize in a range of business areas. These include strategic planning, issues resolution, culture assessment, board effectiveness, retention strategies.

Do you do fixed price or time and materials contracts?

Our associate consultants specialize in a range of business areas. These include strategic planning, issues resolution, culture assessment, board effectiveness, retention strategies.

Do you offer volume or loyalty discounts?

In healthy companies, changing directions or launching new projects means combining underlying strengths and capacities with new energy and support.

What problems does business consulting typically solve?

In healthy companies, changing directions or launching new projects means combining underlying strengths and capacities with new energy and support.

How is the scope of a consulting project determined?

In healthy companies, changing directions or launching new projects means combining underlying strengths and capacities with new energy and support.

How long does a business consulting project last?

In healthy companies, changing directions or launching new projects means combining underlying strengths and capacities with new energy and support.

Ready to Get Started?