The Reserve Bank of India (RBI) had vide its Circular DNBS / PD / CC No. 95/ 03.05.002/ 2006-07 dated May 24, 2007 advised that Boards of Non-Banking Finance Companies (NBFC’s) lay out appropriate internal principles and procedures in determining interest rates, processing and other charges. This was reiterated vide RBI’s circular DNBS (PD) C.C. No. 133/03.10.001/ 2008-09 January 2, 2009 and the guidelines issued via NBS.CC.PD.No.320/03.10.01/2012-13 dated February 18, 2013. Keeping in view the RBI’s guidelines as cited above, and the good governance practices, Visage Holdings and Finance Private Ltd. hereinafter referred to as “Kinara” has adopted the following internal guidelines, policies, procedures and interest rate model for its lending business. This policy is representative of our philosophy in determining interest rates and communicating with customers in an open and transparent manner.
The interest rates for each of our products are decided by the Credit Committee (CC). The average yields and the rate of interest under each product is decided from time to time, giving due consideration to the following factors:
Kinara has adopted a discrete interest rate policy which means that the rate of interest for same product and tenure availed during the same period by separate customers will not be standardized but could vary within a range, depending, amongst other things, the factors mentioned above
The customers are categorized into a gradation of risk categories based on various data points collected during the loan process such as customer history, business history, credit history, sector, sub-sector business is operating in, business revenues, banking history, past loan history with Kinara, etc. Based on data collection, verification and calculations, our data science model determines the risk of each loan and categorizes this risk into different risk bands. A risk adjusted premium is applied to the base rate of a particular loan product to derive the final interest rate for a given loan. Interest Rates can range from 20% to 32% per annum on a reducing balance basis for a loan. Identical products may attract different interest rates for different customers. Interest rates may vary depending upon a combination of factors including but not limited to credit and default risk, historical performance of similar clients, profile, repayment track record and credit history of the applicant, nature of the business, value of collateral security, tenor, etc.
The rates of interest shall be reviewed periodically and any revision in this policy shall be decided by Asset Liability Management Committee. The policy will be reviewed yearly or as required by the Board of Directors of the Company.