Excessive Interest Policy
The Board of Directors of the Company at its meeting held on 13 January 2010 considered the proposal to lay down suitable principles for determining rate of interest to be charged in respect of loans and advances in compliance with RBI Guidelines to NBFCs. In this connection, the Board noted that at present, the Company was not engaged in the business of granting of loans and advances, except to a very limited extent by way of ICDs as part of deployment of surplus funds. It was explained that in such cases, the interest rate to be charged was determined keeping in view mainly the financial soundness and track record of the borrower, nature and value of security, if any, and the prevailing interest rates for similar credits in the market.
The Board endorsed the above practice and advised that detailed guidelines for determining interest rates may be placed before the Board for its consideration, if and when the Company decides to take up grant of loan and advances as a business activity.