• The Reserve Bank of India vide its Master Direction RBI/DNBR/2016-17/45 Master Direction DNBR.PD.008/03.10.119/2016-17 dated September 01, 2016 and updated from time to time:
• Had advised the Boards of NBFCs to adopt an 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 rates of interest and the approach for gradation of risks shall also be made available on the web-site of the companies or published in the relevant newspapers. The information published in the website or otherwise published shall be updated whenever there is a change in the rates of interest.
• The rate of interest must be annualised rate so that the borrower is aware of the exact rates that would be charged to the account.
• In compliance with the requirements of the RBI Regulations mentioned above and the Fair Practices Code of APAC FS, APAC FS has adopted this Interest Rate Policy broadly outlining the Interest Rate Model and risk gradation approach.
  
  

Interest rates offered could be on fixed rate or floating rate basis.

A. Fixed Rates

At present the annualised rate of Interest* to be charged to customers, at the time of sanctioning loans, shall be in the range as mentioned below:

*under exceptional circumstances, based on risk perception, this may fall outside the indicated range

B. Floating Rates

In case of floating interest rates, the interest rates will be benchmarked as under:

• The interest rates charged by APAC shall be linked with the APAC FS Prime Lending Rate (APAC FS PLR) or any other benchmark as may be agreed with the customer. APAC PLR shall be determined from time to time by the ALRPCO (Asset Liability Management and Resource Planning Committee) on the basis of cost of borrowing, operating costs, liquidity, interest rate trend and return on equity thresholds.
• Spread (Plus or Minus) over APAC FS PLR will be determined on the basis of nature and duration of loan, nature of security, credit worthiness, risk perception and competition.
• Intimation of change of interest would be communicated to customers in a manner deemed fit, as per terms of the loan documents. Any revision in interest would be with prospective effect.
• In case of staggered disbursements, the rates of interest would be subjected to review and the same may vary according to the prevailing rate at the time of successive disbursements or as may be decided by APAC. Currently APAC's PLR is 18.5% p.a.

The risk premium for a customer shall be assessed on the basis of the following factors (not necessarily all the factors):

• profile and market reputation of the customer
• inherent nature of the product, type of facility
• Loan Amount
• tenure of relationship with the customer group and past repayment track record
• group strength, future potential, repayment capacity based on cash flows and other financial commitments of the customer
• Nature and value of primary and secondary security
• Type of asset being financed, end use of the loan
• Interest, default risk in related business segment
• Regulatory stipulations, if applicable and
  
• Any other factors that may be relevant in a particular case
  

• APAC FS will communicate the 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 in the benchmark rates and schedule of charges for existing customers would be uploaded on the web site of the Company
• Changes in the rates and schedule of charges for existing customers would also be communicated to them through any modes of communication such as website updation, email, letters, SMS, etc.
  
  

This policy shall be reviewed on a yearly basis in January of each year. However, depending on requirements, the reviews may be done at shorter intervals. Any changes in the policy except as required by legal and regulatory changes shall be made with the approval of the Board.