Background and introduction

Tapstart Capital Private Limited (here in after referred to as “Tapstart’ or ‘the Company’ or ‘we’ or ‘us’) is an RBI registered Non-systemically important Non-deposit taking Non-banking Financial company (NBFC-ND-NSI). It provides credit facilities to underserved middle and low income segment customers catering to different needs, including personal loans, credit lines, medical loans, education loans, consumer electronic loans, consumer lifestyle loans and two-wheeler loans.

The Reserve Bank of India (RBI) has advised Boards of NBFCs to lay out appropriate internal principles and procedures in determining interest rates, processing and other charges. Considering the above, the following internal guiding principles and interest rate model are laid out by Tapstart. This interest rate policy has been framed in line with the Company’s objectives and the guidelines outlined in the RBI Master Direction - Non-Banking Financial Company – Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 and updated from time to time.

The policy has been duly approved by the Company’s Board of directors and is suitably and periodically reviewed.

Purpose of the Policy

The policy has been framed with the purpose to enable customers to know and understand the methodology for determining the lending rates charged to them and for the Company to maintain transparency in this regard at all times.

Methodology/ Approach for gradation of risk

The rate of interest under each product charged to different customers is decided from time to time, based on the following parameters:

  • Cost of Funds
    The cost of funds on the borrowings, as well as costs incidental to those borrowings, considering the average tenure, market liquidity etc.
  • Margin for business operation
    Considering the industry trends and practices followed by competitors.
  • Operational Expenses
    Operating costs including marketing, acquisition, account management and collections in the business as well as maintaining the stakeholders expectations for a reasonable, market-competitive rate of return.
  • Risk profile of customer
    Different information of customers are considered including but not limited to demographics, credit history, geography, product, banking transactions, Income etc..
  • Credit risk
    The cost of credit risk depends upon the internal credit assessment of the borrower including probability of default.

Rate of Interest

The annualised rate of interest charged to borrowers at the time of sanctioning loans shall be within the range as below:

Sr.No. Loan products Range of interest rate*
1. Short term Personal Loan upto 36%
2. Educations Loan 0% to 36%
3. Consumer Durable Loan 0% to 36%
4. Credit Line upto 36%

*Based on the Risk Profile of the Borrower

The abovementioned range shall be reviewed periodically or as and when required by the Board of Directors, keeping in view regulatory guidelines / directives, intensity of competition in the market, net interest margin target, etc.

  • The interest rates offered is on fixed rate basis
  • The interest rate will be annualized so that the borrower is aware of the exact rate that would be charged to him
  • The annualized interest rate, loan amount and the tenor will be communicated to the borrower in the sanction letter
  • The changes in interest rates and other charged will be effected only prospectively
  • Interest would be charged, and recovered on a monthly, quarterly basis or such other periodicity as may be determined by the appropriate authority

Penal and other charges

The charges currently levied on the customer include:

  1. Line Set up Fees: A one-time flat expense upto Rs. 499/- plus applicable taxes, to be borne by the customer at the first drawdown from the credit limit.
  2. In exceptional cases, the rate may fall outside the above mentioned range basis the credit assessment of the borrower

  3. Processing Fee: Basis of Tenor chosen for the drawdown and the value of transaction a flat transaction fee is levied on the customer at each drawdown.
  4. Late payment Fees: In case the customer fails to pay on the due date a flat late payment fee may be levied as a penalty which may be equal to the Interest rate charged to the customer.
  5. Bounce Charges: In case the EMI fails on the repayment date due to insufficient fund at the customer’s bank account a flat bounce charge fee upto Rs. 500/- plus applicable taxes per bounce, shall be payable by such customer.
  6. Foreclosure Fees: In case the customer intends to foreclose the loan, a fee upto 5% of the outstanding principal amount is levied on the customer.

Claims for refund or waiver of the afore mentioned charges or penal interest will be at the sole discretion of the Company.

Disclosure on the website

This Interest Rate policy will be displayed on the Company’s website in accordance with the requirement of the RBI guidelines.

Review of the Policy

The Board of directors shall periodically review the policy or on a need-basis i.e. in the event of change in regulatory framework or for business or operational need. Such updates/changes to the policy will be communicated to the relevant staff/relevant stakeholders.