INTEREST RATE POLICY

Preamble:

In compliance with Reserve Bank of India’s Master Direction - Non-Banking Financial Company –Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 as amended from time to time read with extant guidelines, Clime Finance Private Limited (Company) shall communicate the annualized rate of interest to the borrower/customer along with the approach for gradation of risk and rationale for charging different rate of interest to different categories of borrowers, make available the rates of interest and the approach for gradation of risks on the website of the Company. Accordingly, the Company adopts this policy and the same along with prevailing rates of interest would be provided on the website of the Company and updated from time to time.

Rate of interest:

The Company shall intimate the borrower of the loan amount and the annualized rate of interest at the time of sanction of the loan along with the tenure and amount of monthly installment.

Methodology and Approach for Gradation of Risk:

1. The rate of interest is arrived at based on the weighted average cost of funds, administrative costs, risk premium, profit margin and tenure of loan.

The decision to give a loan and the interest rate applicable to each loan account is assessed on a case to case basis, based on multiple parameters such as the type of the asset being financed, borrower’s profile and repayment capacity, borrower’s other financial commitments, past repayment track record if any, the security for the loan as represented by the underlying assets, loan to value ratio, mode of payment, tenure of the loan, geography (location) of the borrower, end use of the asset etc. Such information is collated based on borrower inputs, credit bureau and inspection by the Company’s officials.

2. The Company charges annualized rate of interest on monthly reducing balance method.

3. The rates of interest are subject to change as the situation warrants and are subject to the discretion of the management on a case-to-case basis due to factors like change in risk profile.

4. The interest rate would be reviewed every year in the beginning of Financial Year and also during the year if need arises. This interest rate shall apply to all new loans.

5. The interest rate shall remain fixed for period as mentioned for the interest reset in the Finance Documents. Upon the interest reset date,the prevailing rate of interest shall apply to all the disbursed loans.

6. Besides interest, other financial charges like processing fees, cheque bouncing charges, foreclosure charges, cheque swapping charges, duplicate repayment schedule and legal, repossession and other related would be levied by the Company wherever considered necessary. Besides the base charges, goods and services tax would be collected at applicable rates from time to time. Any revision in these charges would be from prospective effect. These charges would be decided upon by respective product heads in consultation with operations, finance and legal departments and communicated to the customer upfront.

7. The practices followed by other competitors in the market would also be taken into consideration while deciding the charges.

8. Besides normal interest, the Company may levy penal charges for any delay or default in making payments of any dues or non creation of security or breach of any covenants, representations and warranties and/ or other obligations of the Borrower. These penal charges for different products or facilities would be as per the Board approved policy on Penal Charges on Loan Accounts.

9. Annual Percentage Rate (APR) shall be based on an all-inclusive cost and margin including cost of funds, credit cost and operating cost, processing fee, verification charges, maintenance charges, etc., and exclude contingent charges like penal charges, late payment charges, etc. The APR specific to each borrower will be disclosed in the Key Fact Statement, which is a part of the Loan Agreement.

10. Prevailing rates charges by the Company shall be as set out below: