Interest Rate

Rate of interest is determined by Axis Finance on the basis of various factors including but not limited to cost of funds, matching tenure cost, return on asset required, external credit rating, internal returns threshold, regulatory policies / environment, inherent credit and default risk in the product and the clients, nature and value of primary and collateral securities, haircut / margin, carrying cost, operating cost or any other relevant factor such as prevalent market lending rates in the industry, etc.

Interest rates for assets shall be determined as under:

Minimum Rate of Interest = Matching tenor cost for the respective type of product (as narrated hereunder) plus Proportionate Operating Cost as a percentage of Assets (as calculated hereunder) plus AFL’s margin of 1.50%.

Matching Tenor Cost shall be determined as under:

[*] or other matching maturity if need be.

Operating Cost as a percentage of Assets =

Total Operating Cost for the previous financial year / Total Assets as on the last day of the previous financial year x 100.

For loans with tenor of 12 months & above, the percentage operating cost determined as above shall be considered. For loans with tenor of < 12 months, proportionate percentage operating cost shall be considered.

The sanctioning authority shall be empowered to approve a higher rate of interest for the loan / facility, subject to an overall cap of 40% p.a. Further, the sanctioning authority shall be empowered to approve a lower rate of interest for the loan / facility after adequately justifying the same in the approval note.

The interest rate and yield for each of the loan product would be decided by the Asset Liability Management Committee (ALCO) from time to time considering the above mentioned factors.
The business will charge different rates of interest for different customers under similar products or different rates for the same customers under different products, depending on gradation or risk of the customer and of the products.

Axis Finance adopts discrete interest rate model / policy whereby the rate of interest for each disbursement would be evaluated independently giving due consideration to any or a combination of a few or all factors listed above.Interest rates shall be intimated to the customers at the time of sanction/ availing of the loan and the repayment schedules shall be made available to the customer.Interest rate changes would be prospective in effect and intimation of change of interest, if any, or other charges would be communicated promptly to the customer.

Besides interest, other financial charges like processing fees, cheque return charges, pre-payment / foreclosure charges, part disbursement charges, cheque swaps, cash handling charges, RTGS / other remittance charges, commitment fees, charges on various other services like issuing No Dues Certificate, NOC, letters ceding charges on assets / security, security swap & exchange charges etc. would be levied by the Company wherever considered necessary. Besides the base charges, the service tax / GST and other cess would be collected at applicable rates from time to time. These charges would be decided by respective department heads in consultation with Operations & Financial Accounting teams.

This policy should always be read in conjunction with RBI guidelines, directives, circulars and instructions. The Company will apply best industry practices so long as such practices do not conflict with or violate RBI guidelines.