Disclosures as Required by RBI

A website-ready version of the supplied RBI disclosures document for Herambha Leasing.

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Interest Rates and Penal Charges Disclosure

The company charges interest and service charges based on market conditions and the borrower’s risk profile. Penal charges are levied to encourage timely payments and to cover losses incurred from payment delays. These charges are not considered interest.

Interest Rates

Interest on loans ranges from 9% to 18% based on risk assessment. For new vehicles, the interest rate is typically 12%, while for older vehicles, it is around 18%. Interest is charged on a flat basis for easy calculation and understanding, and the rate is between 12% and 18%.

Penal Charges

Penal charges are applied for late payments and bounced cheques. A penalty of Rs. 500 to Rs. 2,000 will be debited to the borrower’s account for a one-month delay based on the EMI amount.

Service / Documentation Charges

Documentation charges are between 1% and 2%.

Consumer Education

The company aims to improve financial literacy by educating consumers on overdue payments, Special Mention Accounts (SMA), Non-Performing Assets (NPA), and account upgradation. A copy of the Fair Practices Code, which covers these topics, is given to every borrower in their local language.

Overdue Payments

A payment is considered overdue if it is not made by the due date. For example, if an EMI is due on June 5 and is not paid, the account becomes overdue on June 5 at the end of the day.

Special Mention Account (SMA)

An SMA is an early warning system for accounts showing signs of stress before becoming an NPA.

SMA-1: Payment is overdue for 1 to 30 days.
SMA-2: Payment is overdue for 31 to 60 days.
SMA-3: Payment is overdue for 61 to 90 days.

Non-Performing Asset (NPA)

A loan becomes an NPA when it stops generating income for the company, which typically occurs when a payment is overdue for more than 90 days.

Account Upgradation

An NPA account can be upgraded back to a Standard asset category only when the borrower pays the entire overdue amount, including principal and accrued interest. If a borrower has multiple credit facilities, all accounts will be upgraded only after all arrears are paid.

Return of Documents to Legal Heirs

In the event of a borrower’s death, the company has a policy to return original property documents to legal heirs after they submit a Legal Heir Certificate and other necessary documents. The documents will only be returned after obtaining legal opinion and advice.

Fair Practices Code

The NBFC follows a Board-approved Fair Practices Code to ensure transparency and customer protection. The code is displayed on the company’s notice board in both English and a vernacular language and is hosted in the Policies and Codes section of the website.

Interest Rate Gradation

Interest rates differ based on a customer’s risk profile and asset class. The risk-based gradation and current rates are published and updated regularly.

Digital Lending Platforms (DLPs)

Herambha Leasing Private Limited has not partnered with any digital lending platforms.

Corporate Governance Policy

The company’s corporate governance policy is approved by the Board and is available for review in the Policies and Codes section of the website.

Public Disclosures

As per RBI regulations, certain classes of companies are required to disclose key liquidity and risk indicators in quarterly and annual financial statements. Herambha Leasing Private Limited is not subject to the public disclosure clause on Liquidity Risk & Liquidity Position because it does not accept public deposits.

Related Party Transactions

The company’s policy on related party transactions is discussed in the Internal Corporate Governance Guidelines and is disclosed in the annual report.

Outsourcing Termination

This is not applicable to Herambha Leasing Private Limited.

Grievance Redressal

Customers can file complaints, which will be addressed within 30 days. A committee, chaired by Director C. Lakshminarayana Rao, has been formed to handle grievances within the 30-day timeframe.

Wilful Defaulters

The company publishes a list and photographs of wilful defaulters in compliance with regulatory norms. A committee is responsible for identifying wilful defaulters, and after due notice, their photographs will be displayed on the company’s notice board.