Transfer Pricing for Banking, Financial Services & Insurance
Intercompany financing, guarantees and shared services move real money at real scale in BFSI groups — and every one of them needs an arm's-length rate that will hold up under scrutiny.
Financial transactions demand financial-market benchmarks
Unlike goods or services, financial transactions — loans, guarantees, cash pooling — are benchmarked against bond yields, credit ratings and market interest data, a specialised exercise that also interacts directly with India's interest-limitation rules under Section 94B.
Typical structure
An Indian NBFC or bank subsidiary borrows from or lends to group entities, receives guarantees for overseas borrowing, and shares treasury/back-office costs across the group.
Where Transfer Pricing applies in BFSI
Intercompany Guarantees
Guarantee fees for a parent guaranteeing an Indian subsidiary's overseas borrowing, or vice versa.
Treasury & Cash Pooling
Group-wide cash pooling and notional/physical pooling interest arrangements.
Intercompany Loans
Loans between group entities requiring arm's-length interest rate benchmarking.
Shared Services
Compliance, risk, IT and back-office functions shared across group financial entities.
Reinsurance Arrangements
Intra-group reinsurance and insurance risk-transfer pricing.
Asset Management Fees
Advisory and management fee structures between group asset managers.
How these transactions are benchmarked
CUP
Interest and guarantee fee benchmarking using bond yield curves and credit rating data.
CPM / TNMM
Cost-plus or margin-based benchmarking for shared services.
Section 94B Analysis
Interest deduction limitation computation for excess interest to associated enterprises.
Credit Rating Approach
Notch-based credit rating uplift methodology for guarantee fee determination.
Market-tested rates, not rules of thumb
We build credit-rating-based guarantee fee models, benchmark intercompany interest against comparable bond and loan data, and run the Section 94B interest limitation computation alongside — so financing structures are priced and compliant together.
Guarantee Fee Modelling
Credit rating and CDS-spread based benchmarking.
Interest Rate Benchmarking
Bond yield and comparable loan data analysis.
Sec 94B Computation
Interest limitation compliance built into the same file.
MAP Support
Cross-border resolution for financing-related disputes.
Our BFSI Transfer Pricing services
Financial Transaction Benchmarking
Loans, guarantees and cash-pooling rate analysis.
Sec 94B Compliance
Interest limitation computation and disclosure.
TP Documentation & 3CEB
Complete filing package for financial and shared-service transactions.
Litigation & MAP
Representation in financing-related TP disputes, domestically and cross-border.
Have intercompany loans or guarantees in place?
Get a free benchmarking and 94B exposure review.