RBI Guidelines on Floating Rate Loans

This is in reference to the Loan facility availed by you from Shivalik Small Finance Bank.

There is no change in the External Benchmark Lending Rate (EBLR) of the bank. Hence, there is no change in the rate of interest for your Loan account.

As per the Reserve Bank of India (RBI) Circular No. RBI/2023-24/55 dated August 18, 2023, if the External Benchmark Rate of the Bank changes, the Interest Rate will be revised for your Loan Account, and hence there will be impact on EMI and/or tenor or both. Below are the options available for you prior to execution of rate reset:

1. Change in tenure of the Loan
2. Change in EMI of the Loan
3. Change in tenure and EMI of the Loan
4. Switch from the existing floating rate of interest to a fixed rate of interest by availing the conversion option. The applicable amendment charges will be charged for the same.

You can opt for any of the above options before the reset date by visiting any Shivalik Small Finance Bank Loan Servicing Branch. The request will be processed based on the option chosen by the borrower or as per the agreed Terms and Conditions. In case no request is received before the reset date, then rate reset will be executed in the below manner and same will be intimated post reset:

1. Enhancement in tenure, then 
2. Enhancement in EMI if limit of tenure is exhausted.
3. If tenor and debt obligation go beyond the Bank’s threshold, a fresh credit appraisal and loan documentation may be required from the customer. 

In addition to the above, you can opt for part prepayment or full prepayment of the loan any time during the tenure of the loan. Levy of foreclosure charges/ pre-payment charges shall be subject to extant guidelines.

Sincerely,
Shivalik Small Finance Bank