Page 3 - Key Fact Statement News Today

The RBI stated that the transition to the new punitive charges regime should occur on or after April 1, 2024, but no later than June 30, 2024 in the case of existing loans.

The RBI has released a circular extending the deadline to implement the revised guidelines on how banks, NBFCs are charge penal interest and penalty charges on loan accounts. The deadline has been extended by three months for new loan accounts opened on or after April 1, 2024. Read on to know more about it.

Bajaj Finance had in a filing last month said that the RBI in its order dated November 15 directed the NBFC to stop sanction and disbursal of loans under its two lending products.

The Reserve Bank of India (RBI) in August had instructing banks not to use penal interest rates as a revenue enhancement tool but rather to instill credit discipline. The RBIs guidelines are set to take effect on January 1, 2024. However, some banks seek a three-month deferral, arguing that penal interest rates promote better credit discipline. They also seek clarity on GST implications for penalties on stressed accounts.

The new announcement comes after RBI, in September 2022, issued guidelines on protecting borrowers. As per the guidelines issued last year, lenders were required to inform customers about the cost of taking the loan. Lenders are now required to issue a Key-Fact Statement to the borrower before any loan is given.

Affordable housing and the introduction of the real-estate regulator were the biggest moves. But a lacklustre approach towards the rental housing market was arguably a big miss.

Chennai-based Unifi Capital has assets under management (AUM) of Rs 20,400 crore with around 10,000 Portfolio Management Services (PMS) and Alternative Investment Funds (AIF) clients across 22 states in India.

Affordable housing and the introduction of the real-estate regulator were the biggest moves. But a lacklustre approach towards the rental housing market was arguably a big miss.

The regulator has directed Bajaj Finance to halt digital loans through two products, saying the company violated a few of its digital-lending rules.

Higher risk weights mean that banks and NBFCs will have to set aside more capital for every such loan they extend. The days of easy credit may well become a thing of the past.