Policy ID: PCI/POL/06/2026-27 • Version 1.0 Owner: CFO / Credit Head • Approver: Board of Directors Sources: RBC, CF • Review: Annual / regulatory change
Purpose and application
All lending products and borrower price quotations.
1. Pricing method:- Use a documented annualized pricing model covering cost of funds, operating cost, expected credit loss, capital cost and sustainable margin. Risk premiums shall follow objective borrower/product factors and not arbitrary branch discretion.
2. Approval and communication:- The Board shall approve product rate bands and fees. Credit shall record the reason for the rate offered and disclose annualized rate, fixed/floating basis, reset mechanism and APR where required. Flat-rate quotations must also show the effective cost.
3. Interest calculation:- Start interest when funds are actually disbursed; use actual outstanding and applicable day-count rules. Do not charge a full month when use is for part of a month or charge on advance instalments without proper adjustment. Independently test the loan system.
4. Floating-rate servicing:- For covered EMI personal loans, explain reset impact and provide applicable options on EMI, tenor, switching and prepayment. Prevent negative amortization. Provide periodic statements and communicate rate/charge changes prospectively.
5. Monitoring:- CFO shall review realized yields, rate outliers and excess-interest refunds monthly. Penal charges shall remain separate from interest. Changes outside bands require higher approval; Board review shall occur at least annually.
Source codes are linked to the Reference Register. Read with the common implementation controls and relevant annexes. Applicable law and RBI Directions prevail.