This article is an original Finsta editorial interpretation designed for general operational awareness. It does not reproduce source material and should not be treated as legal, regulatory or investment advice.
Pricing begins with a clear floor
A sustainable loan price should cover the institution’s funding cost, expected credit loss, operating effort, capital usage and a reasonable return. Treating these elements separately makes the final rate easier to explain and reduces the risk of informal discounting.
Use customer and product adjustments carefully
Risk, security quality, loan tenure, channel cost and customer relationship can justify adjustments, but each adjustment should follow a documented range. The purpose is not to create a complicated formula; it is to prevent inconsistent decisions.
Review realised performance, not only planned margin
A product may look profitable at sanction but underperform after collection cost, prepayment behaviour, delinquency and servicing effort are included. Compare planned margin with realised portfolio results and revise pricing bands when the gap persists.
Reserve Bank of India — Monetary Policy Statement and RBI Bulletin, June 2026
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