Stay updated with breaking news from Key Fact Statement. Get real-time updates on events, politics, business, and more. Visit us for reliable news and exclusive interviews.
Financial Literacy News: Are you being overcharged on loan interest? The Reserve Bank of India (RBI) has identified instances of unfair lending practices by banks and other financial institutions when it comes to charging interest on loans.
Date for interest charging by banks: The Reserve Bank of India did onsite review of banks and other financial institutions to check how lenders are charging interest on loans issued to borrowers. The central bank found four instances where banks were following unfair lending practices. Read on to know more about this and what RBI has asked banks to do.
In August 2023, the RBI issued a circular on how banks can levy penalties on loan accounts. The new guidelines were supposed to come into effect from January 1, 2024. However, considering that certain clarifications were needed in this regard and additional time was required by banks and NBFCs the implementation date is extended.
The move is one of the measures to enhance the customer centricity and also to enhance transparency measures. The possibility of levying any hidden charges by a lender on a loan will be greatly reduced because of this. The actual annualised interest rate will also include one-time charges and other charges that are levied by the banks and NBFCs.
Policymakers also voted to continue with its stance on the withdrawal of accommodation