Review our guidelines, policies, and terms of service.
| Version | Effective Date |
|---|---|
| 1 | 25.06.2024 |
| 2 | 30.06.2025 |
| 3 | 01.07.2026 |
The Reserve Bank of India ("RBI”) vide Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Directions, 2025 has stipulated at Chapter III - Responsible Lending Conduct for all applicable Non-Banking Financial Companies (“NBFCs”) and has directed all NBFCs to lay down appropriate internal policies and procedures in determining interest rate model taking into account relevant factors such as cost of funds, margin and risk premium and determine the rate of interest to be charged for loans and advances. The rate of interest and the approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers shall be disclosed to the borrower or customer in the application form and communicated explicitly in the sanction letter. The rates of interest and the approach for gradation of risks shall also be made available on the website of the companies. The information published on the website or otherwise published shall be updated whenever there is a change in the rates of interest. The objective of adopting and implementing this policy is to institute fair and transparent dealings in the lending business in accordance with the aforesaid regulatory requirements and the Fair Practices Code adopted by the Meghdoot Mercantile Private Limited (hereinafter referred to as “NBFC” or the “Company”). The said Interest Rate, Upfront Charges and Incidental Charges like Penal Charges, Late Payment Charges, EMI Bounce Charges etc. broadly outlines the Interest Rate Model, Applicable Incidental in case of delay in repayment of loan or non-compliance with terms of the loan agreement and the Company’s approach of risk gradation in this regard. This Policy also aligns with RBI instructions on Key Fact Statement (KFS), transparency in lending, and customer protection measures as applicable from time to time.
The main objectives of this Policy are to: a. Ensure that interest rates are determined in a manner as to ensure long term sustainability of business by taking into account the interests of all stakeholders, b. Develop and adopt a suitable model for calculation of interest rate; c. Enable fixation of interest rates which are reasonable: both actual and perceived; d. Ensure that computation of interest is accurate, fair and transparent in line with regulatory guidelines and market practices; e. Charge differential rates of interest linked to the risk factors as applicable; f. Decide on the principles, methodology and approach of charging spreads to arrive at final rates charged from customers. g. The Company shall not levy any charges that have not been disclosed in the Sanction Letter, Loan Agreement, Key Fact Statement or Schedule of interest rates Charges.
This policy is approved by the Board of Directors of the Company and the Company has adopted the Policy on Interest Rate and Penal Charges taking into account relevant factors such as cost of funds, margin and risk premium and determining the rate of interest to be charged for loans and advances. Any revision in the Policy shall be reviewed by the relevant internal units and approved by the Board of Directors. Page 5 of 10 The Policy shall be reviewed at least annually or earlier if required due to regulatory changes. This Policy shall always be read in conjunction with extant RBI guidelines, directives, circulars and instructions.
As per extant regulations and in terms of this Policy, the following disclosures shall be made:
different rates of interest to different categories of borrowers shall be disclosed by the Company to the borrower or customer and will be communicated explicitly in the sanction letter and KFS.
on the website of the Company. The information published on the website shall be updated whenever there is a change in the rate of interest.
exact rates that would be charged in relation to the loan amount.
prospectively and the same shall be adequately disclosed in the loan agreement, sanction letter and Key Fact Statement (“KFS”).
the loan agreement, Key Fact Statement, in addition to rate of interest and other charges being displayed on the Company’s website.
The Company lends money to its customers and has various products to cater to the needs of different categories of customers. The interest rate of each product and every customer is decided from time to time, giving due consideration to the following factors: a. Cost of Capital: To run the business, the Company has infused equity share capital and accordingly the cost of such equity share capital been infused shall be taken into consideration. b. Weighted Average cost of Borrowing: Since the Company borrows funds from various banks, financial institutions and other external lender(s), the weighted average borrowing cost, as well as costs incidental to those borrowings like brokerage, consultancy fees, processing fees shall be taken into consideration. The cost of borrowings varies according to market conditions thus pricing of interest rates shall be consequently impacted and decided accordingly. c. Risk: Risk related to loss of credit due to tenure of loan, nature of facility, ticket size of loan, geographical condition, Market Value, Property condition, customer segment, sourcing channels, stability in earnings and employment, financial position, past repayment track record with us or other lenders, external ratings of customers, credit reports, customer relationship, other existing indebtedness, results from verifications etc. Therefore, risk of recovery of loan shall be taken into consideration and accordingly the risk premium would be reckoned. d. Opex Cost: It includes employee expenses, office and infrastructure related fixed and variable costs, operations costs, sales and marketing expenses, Technology Expenses, Compliance overheads etc. Information Technology cost and customer acquisition and onboarding cost are major opex cost for digital loans. Page 6 of 10 e. Tenure premium and Liquidity Premium as per market conditions f. Profit Margin: Fair profit margin is added to arrive at the lending rate. The company may at its discretion fix different margins for different customers, considering the risk of default. All customers will however be notified of the interest payable for the loan to be availed from the company. Apart from the aforesaid factors, following points also impact the interest rate determination:
The rate of interest and/or charges for the same loan product and same tenor may vary for different customers based on consideration of any or a combination of above parameters during the period of this policy.
Rate of Interest shall be offered based on the parameters as explained above. a) The interest rates may vary from case to case based on credit risk methodology set out above. Loans are paid through Equal Periodical Installments (EPIs)/ Bullet Repayment via electronic payment or deduction from the employer as per loan agreement. Interest rate is charged from the date of disbursement. b) The Company shall ensure that interest rates, including for short-tenure or high-risk products, are reasonable, transparent, and commensurate with the risk profile and cost structure, and do not result in unfair or excessive burden on borrowers. c) Currently, all loans offered by the Company to it’s customers are at Fixed Interest rates. d) The interest re-set period for variable rate loans would be decided by the Company from time to time. The interest could be charged on monthly or on such rest as communicated in the loan sanction terms, however, The Company presently offers only fixed rate loans. In the event floating rate products are introduced, the applicable reset methodology shall be approved separately. e) Interest rates would be intimated to the customers at the time of sanction / availing of the loan and EMI apportionment towards interest and principal dues would be made available to the customer. Page 7 of 10 f) The interest shall be deemed payable immediately on the due date as communicated and no grace period for payment of interest is allowed. Besides this rate of interest, the Company may levy additional/penal charges for delay or default in making payments of any dues. g) The changes in the interest rates and related charges would be prospective in nature and intimation of change of rate of interest or other related charges would be given to customers in a mode and manner deemed fit in accordance with applicable laws and regulations. *As per the Credit Policy of the Company, though various loan products are mentioned in this Policy, the Company is presently carrying out only the Short-Term Unsecured Bullet Loan and the Credit Builder Loan. Accordingly, the rate of interest for the other loan products, namely Loan Against Property (LAP), EMI based Retail Loan and Corporate Business Loan, has not been finalised by the Board of Directors. As and when the Board takes a decision to commence operations in any of these other products, it shall review and add the applicable rate of interest for the same at that time. Please refer Annexure – I: Schedule of Interest Rates and Charges for the applicable rate of interest.
The Company shall ensure that Penalty, if charged, shall be for non-compliance of material terms and conditions of the loan agreements by customers. It shall not be levied in the form of ‘Penal Interest’ that is added to the rate of interest being levied on the loans and advances. There shall be no capitalization of Penal Charges (i.e. no further interest computed on such charges). However, this will not affect the normal procedures for compounding of interest in the loan account. The Company shall ensure that the quantum of Penal Charges shall be reasonable and commensurate with the non-compliance of material terms and conditions of loan agreement without being discriminatory with a particular loan / loan product. The penal charges in case of loans sanctioned to ‘individual borrowers, for purposes other than business’, shall not be higher than the penal charges applicable to non-individual borrowers for similar non-compliance of material terms and conditions. A. Event of default which will attract Penal Charges: i. Breaches to any other important or material terms and conditions of the loan contract. However, materiality would be determined by the Company as to what constitutes material breach. B. Penal Charges: i. The Penal Charges shall be levied only on the overdue amount or on non- compliance with material terms of the loan agreement, as specified in the Annexure - I Schedule of Interest Rates and Charge ii. The Company shall display the quantum and reason for penal charges to the customers in the loan agreement and / Key Fact Statement (KFS) and schedule of Interest Rates and charges as applicable. iii. The applicable penal charges, as updated from time to time, shall be displayed on the Company's website. iv. The Company shall ensure that the applicable penal charges are clearly communicated to the borrowers, whenever reminders for non-compliance of loan terms are sent to borrowers. v. Any instance of levy of penal charges and the reason therefore shall also be appropriately communicated to the borrowers. Page 8 of 10
i. Besides interest, other financial charges (upfront charges and Incidental Charges) like processing fees, origination fees, EMI bouncing charges, prepayment, foreclosure charges, recovery/collection charges, re-scheduling charges, penal charges on late repayment of a loan or a EMI, payment gateway charges, cheque swap charges, security swap charges, charges for issue of duplicate statement of account, ECS/ Direct Debit/ NACH mandate registration/ lodgment/ handling or for any other service provided by the Company or cost incurred by the Company for the provision of services related to the loan granted to the customers or as per schedule of interest rate and charges communicated by the company from time to time or cost towards an expense incurred by the Company for the recovery of the loan. Besides these charges, GST, would be collected at applicable rates from time to time. Any revision in these charges would be prospective in effect with due communication to customers. ii. These fees and charges may vary based on the loan type, exposure limit, expenses incurred, and customer segment and generally represent the costs incurred in rendering the services to the customer. All such fees and charges shall be clearly communicated to the customer by way of a sanction letter, KFS, financing documents and the schedule of interest rates and charges notified by the Company from time to time. iii. The Company may also levy and collect charges and penal charges, for delay or late payment of loan instalment and other dues to the Company and bouncing of ECS/ Direct Debit/ NACH. iv. The Company may also levy and collect charges for loan documentation, portfolio monitoring, recovery of loan or for other facilities and services provided based on market standards. The details of the charges will be as per the schedule of interest rates and charges. Please refer Annexure - I Schedule of Interest Rates and Charges for the applicable schedule of charges.
If a borrower wishes to exit the loan after it has been sanctioned, he/she can do so within 1 days of loan disbursement which shall be the free look up period. The principal amount and other applicable charges will have to be paid. However, no penalty shall be charged during such period.
No claims for refund or waiver of charges / penal charges / additional charges for loan documentation, portfolio monitoring, recovery of loan or for other shall normally be entertained by Meghdoot Mercantile Private Limited and it is at the sole discretion of the Company to deal with such requests, if any.
Foreclosure charges Nil but interest at contracted rate till date of final payment shall be made. Part- Prepayment Charges Part prepayment shall be permitted in accordance with the loan product terms as disclosed in the Sanction Letter and
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a. The Company shall communicate the effective rate of interest - to customers at the time of sanction / availing of the loan through the acceptable mode of communication. Interest Rate Policy would be uploaded on the website of the company and any change therein would be uploaded on the web site of the Company. b. Changes in the rates and charges for existing customers, if any, would be communicated to them through various modes of communication such as on the website, digital platform and/or via email, letters, SMS, etc. However, the company would ensure that there is no change during the tenure of the loan for such loans which had already been contracted with customers
The Board of directors is authorized to make appropriate changes to this Policy taking into account changes in the money market scenario in the Country which includes the upward / downward revision in interest rates applicable to various loan products and the relevant charges applicable for such loan products. Page 10 of 10 14. ANNEXURE I: SCHEDULE OF INTEREST RATES AND CHARGES: A. Short Term Unsecured Bullet Loan S. No. Particulars Details 1 Name of Product Short Term Unsecured Bullet Loan 2 Rate of Interest 0.10% - 1 % Per day 3 Processing charge 3%-10%+GST 4 Penal Charges Nil 5 EMI Bounce Charges Upto Rs.500+GST per bounce 6 No dues certificate (soft copy) Nil 7 Any other charges As per actuals B. Credit Builder Loan S. No. Nature of Charges Details 1 Name of Product Credit Builder Loan 2 Rate of Interest 5% - 10 % Per month 3 Processing charge Upto Rs.100 + GST 4 Penal Charges Nil 5 EMI Bounce Charges Nil 6 No dues certificate (soft copy) Nil 7 Any other charges As per actuals C. Unsecured Personal Loan S. No. Nature of Charges Details 1 Name of Product Unsecured Personal Loan 2 Rate of Interest 9% - 30 % Per annum 3 Processing charge 0% - 10% + GST 4 Penal Charges Nil 5 EMI Bounce Charges Nil 6 No dues certificate (soft copy) Nil 7 Any other charges As per actuals Note: GST, other government taxes and levies as applicable, will be payable on all fees and charges.