Fair Practices Code News Today

RBI on Monday warned lenders to not levy interest from the date of loan sanction, instead of actual disbursement.

RBI has asked banks and financial institutions to follow fair practices in charging of interest on loans by them.

The RBI said unfair practices and other such non-standard practices of charging interest do not align with the spirit of fairness and transparency while dealing with customers.

Reserve Bank of India (RBI) has asked lenders to be transparent in their dealings with borrowers and show fairness while charging interest on loans, even as they enjoy complete freedom in the pricing

In the case of repayment of loans during a month, some banks were charging interest for the entire month, rather than only for the period for which the loan was outstanding. RBI recently found banks following several other unfair practices.

(This story has not been edited by THE WEEK and is auto-generated from a PTI

Some lenders are resorting to certain unfair practices in charging interest rates such as charged interest on loans from the date of sanctioning or execution of the loan agreement rather than from the date of disbursement.

In a statement, the RBI said the penalty on IDFC First Bank has been imposed for non-compliance with certain directions on 'Loans and Advances - Statutory and Other Restrictions'.

Despite defaulting, borrowers have legal rights that lenders must respect

The Delhi High Court has sought responses from the RBI and SEBI regarding unethical lending practices by Paisalo Digital. Mukesh Aryas plea alleges violation of RBIs Master Circulars and seeks an independent inquiry and audits. Santanu Agarwal clarifies the companys stance on the matter.