RBI Regulations

Credit Ratings

Instrument CARE RATINGS INDIA RATINGS CRISIL
Short-Term Debt Programme A1+ A1+ A1+
Long-Term Debt Programme AA+ AA / Stable AA - /Stable
Subordinated Debt Programme AA+ AA - /Stable

INTEREST RATE MODEL

INTEREST RATE APPROACH AND GRADATION OF RISK POLICY

Reserve Bank of India Vide its Notification No. DNBS204/CGM(ASR)-2009 dated January 2, 2009 and vide its Guidelines on FPC for NBFC’s DNBS CC PD No. 320/03.10.01/2012-13 dated February 18, 2013 has directed all NBFCs to communicate the annualized rate of interest to the borrower along with approach for gradation of risks and rationale for charging different rates of interest to different categories of borrowers, (ii) make available the rates of interest and the approach for gradation of risks on the website of the companies. The Board of Directors (“Board”) of M/S Shriram City Union Finance Limited (“Company”) has formalized Interest Rate approach and gradation of risk policy (“Policy”) for the purpose.

  1. Annualised Rate of Interest
    • The Company shall at the time of sanction of the loan intimate the borrower the loan amount, annualized rate of interest, method of application , tenure of loan and amount of monthly installment.
    • In addition to interest rate ,Processing fees, additional interest on delayed re-payments of loan/loan installment, foreclosure charges, cheque bouncing charges, part disbursement charges and any other charges mentioned in the Loan Agreement shall be charged.
    • The interest shall be deemed payable immediately on the due date as communicated and no grace period of payment of interest shall be allowed.
    • The Company offers variable installments and equated monthly installments for repayment of loan.

  2. Approach for Gradation of Risk
    • The lending rate of interest applicable to each loan account will be arrived at after taking into consideration multiple parameters such as class of asset, type of asset, tenure, profile of the borrower, repayment capacity of the borrower based on the cash flows, loan to value of the asset financed, type of collateral security provided by the borrower, past repayment track record of the borrower, geography (Location) of the borrower and end use of the asset, period of relationship with the borrower, overall yield, subventions available future potential, any loan scheme floated by the Company etc. The information shall be based on borrower inputs and field inspection by officials of the Company.

  3. Rational for Interest Rate
    • The approach to the gradation of risk does not discriminate between borrowers in the same class but tailors the interest rate of each loan.
    • Interest Rate shall be based on gradation of risk as perceived by the management, Borrowing and other costs.

  4. Rate of interest
    • The rate of interest shall be based on gradation of the risk as perceived by the management and it’s cost
    • The rate of interest and other charges/fees mentioned in the loan agreement/sanction letter/any other letter or communication shall be final and binding for all purposes.
    • The rate of interest shall be periodically fixed by the management of the Company.

  5. Other
    • The rate of interest applicable to each loan account is subject to change as the situation warrants and is subject to the Management’s perceived risk on a case to case basis.
    • Claim for refund or waiver of charges/penal interest/ additional interest would normally not be entertained by the Company
    • This Policy can be changed by the management of the Company at any time .
    • This Policy shall be displayed on the web site of the Company.
    • This Policy shall come into effect from November 1, 2015