RBI circular mandated disclosure of all fee data from October, 1

New Delhi: To boost transparency, RBI has mandated all banks and finance companies to provide borrowers a key facts statement that includes data on all fees and the annual cost of credit from Oct 1 besides basic loan information. 

The statement should also provide details on the policy on recovery agents, contact details for grievances, and the likelihood of the loan being sold to others.

Read Also : GAIL commences first green hydrogen plant under national green hydrogen mission

As announced in the Statement on Developmental and Regulatory Policies dated February 8, 2024, it has been decided to harmonize the instructions on the subject. This is being done in order to enhance transparency and reduce information asymmetry on financial products being offered by different regulated entities, thereby empowering borrowers for making an informed financial decision. The harmonised instructions shall be applicable in cases of all retail and MSME term loan products extended by all regulated entities (REs).

Read Also : RVNL emerges Lowest bidder from MMRC, Nagpur metro

REs shall put in place the necessary systems and processes to implement the said guidelines at the earliest. In any case, all new retail and MSME term loans sanctioned on or after October 1, 2024, including fresh loans to existing customers, shall comply with the above guidelines, without any exception. During the interregnum, the relevant provisions on ‘KFS/Factsheet’ under the extant guidelines shall continue to remain applicable, including the ‘Guidelines on Digital Lending’, the Master Direction on ‘Regulatory Framework for Microfinance Loans’, and the circular on ‘Display of Information by Banks’.

Read Also : NMDC Steel Ltd unveiled its logo