Tds on nbfc loan processing

As per section 2(28A) of the Income Tax Act, "interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised ;

As per above definition processing charges are part of interest hence TDS will be dedutible as per section 194A and in case payment to a bank same is exempt as per section 194A(3).