The Reserve Bank of India has, through various circulars, advised Non-Banking Financial Companies to lay out appropriate internal principles and procedures for determining interest rates, processing fees, and other charges. Keeping these guidelines in view, and as a matter of good governance, Acolyte Finserv Limited has adopted the following internal policy for its Paisa in Hand lending business.

The base interest rate applicable to our lending business is arrived at based on the weighted average cost of funds, an appropriate risk premium, and other costs such as administrative expenses and profit margin. This base rate is reviewed periodically by our Asset-Liability Management (ALM) Committee.

The rate of interest for the same loan product and tenure availed during the same period by different customers need not be standardised, and may differ between customers depending on a combination of the risk factors described below.

The interest rate applicable to each loan account is assessed based on multiple parameters, including:

• Nature of lending (secured or unsecured) and tenure of the loan.
• Nature and value of any security or collateral offered.
• Risk profile of the customer, including professional qualification, stability of income and employment, financial position, past repayment track record, external credit ratings, and credit reports.
• Inherent credit and default risk within our loan portfolio, particularly trends within specific customer segments.
• Prevailing industry trends and offerings by comparable lenders.

At the time of sanction, we intimate the borrower of the loan amount, the annualised rate of interest, the method of its application, the tenure, and the amount of the monthly instalment. Other charges, such as processing fees, additional interest on delayed payments, and cheque-bounce charges, are mentioned in the sanction letter, the Most Important Document (MID), and the loan agreement.

The rate of interest applicable to a loan account is subject to change as circumstances warrant and is assessed by management on a case-to-case basis. Any revision in rates or charges will be intimated to affected borrowers and will apply only prospectively.

The rate of interest charged to our customers is linked to the base rate, with a mark-up that typically varies from 200 to 1,300 basis points depending on the risk profile of the customer, available security, repayment track record, and financial standing. Accordingly, the present range of interest charged to our customers is between 12% and 36% per annum, payable monthly. The exact rate applicable to your loan will always be specified in your individual sanction letter.