RBI to issue norms on loan resets to boost transparency
1 year, 4 months ago

RBI to issue norms on loan resets to boost transparency

Live Mint  

The Reserve Bank of India on Thursday said it would set rules to enhance transparency in interest rate and tenor resets for floating loans, an outcome of home-loan repayment periods being extended to as long as 50 years in certain cases. Through supervisory reviews and feedback from the public, RBI on Thursday said it has come across several instances of unreasonable elongation of the tenor of floating-rate loans without proper consent and communication. Asked how RBI would define a tenor elongation as unreasonable, governor Shaktikanta Das said it is something banks will have to assess, taking into account the payment capacity of the borrower. “Given the increasing realization of credit, proposals to transparently disclose the implication of interest rate resets in floating-rate loans and corresponding changes in the tenors, and/or the changes in EMI is a welcome move to educate and inform the borrowers as they can better understand the impact of the changes in these terms,” said A.M. Karthik, vice-president, financial sector ratings, Icra Ltd.

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Wilful default: RBI to tweak rules to give lenders flexibility in handling cases
1 year ago

Wilful default: RBI to tweak rules to give lenders flexibility in handling cases

Live Mint  

New Delhi: Lenders may get more flexibility in dealing with potential wilful defaulters as the central bank may make in-person hearings with borrowers mandatory at the time of identifying a loan account as stressed, two persons aware of the development said. A Supreme Court order in March regarding RBI’s 2016 circular on wilful defaults had said that borrowers should get …

RBI Allows Borrowers to Change Interest Rate
1 year, 4 months ago

RBI Allows Borrowers to Change Interest Rate

Deccan Chronicle  

Mumbai: The Reserve Bank of India on Friday asked lenders to provide options to floating rate loan borrowers to either increase Equated Monthly Instalment or tenure or prepay the full amount or a part of it at any point during the tenure or move to fixed-rate interest rate at the time of resetting the loan. The central bank said that …

RBI prohibits penal interest on loans for contractual non-compliance
1 year, 4 months ago

RBI prohibits penal interest on loans for contractual non-compliance

Hindustan Times  

India's central bank on Friday forbids banks and other lenders from charging penal interest from borrowers for not complying with the contractual terms and conditions of a loan to ensure fair lending practices and protect the interest of consumers. RBI said the intent of levying a penal charge is "essentially to inculcate a sense of credit discipline" and not as …

RBI issues fresh guidelines asking banks, NBFCs not to levy penal interest on borrowers in case of default
1 year, 4 months ago

RBI issues fresh guidelines asking banks, NBFCs not to levy penal interest on borrowers in case of default

The Hindu  

Reserve Bank of India has issued fresh guidelines to the Regulated Entities such as commercial and other banks, Non-Banking Finance Companies and other lenders to ensure reasonableness and transparency in disclosure of penal interest. According to the new directive, penalty if charged for non-compliance of material terms and conditions of loan contract by the borrower would be treated as ‘penal …

Borrowers can switch to fixed rate loans
1 year, 4 months ago

Borrowers can switch to fixed rate loans

Deccan Chronicle  

MUMBAI: The Reserve Bank of India on Thursday decided to keep the repo rate unchanged at 6.5 per cent for the third time in a row, giving some respite to home loan borrowers who have seen their EMIs rise considerably. The other good news is that the central bank announced to establish a framework for bringing in more transparency for …

RBI loan restructuring plan | A difficult choice for borrowers
4 years, 3 months ago

RBI loan restructuring plan | A difficult choice for borrowers

The Hindu  

The moratorium offered by banks and other institutional lenders ended last month. In this scenario, the Reserve Bank of India has announced a loan restructuring plan to offer relief to impacted borrowers, who may struggle to repay their debt over the short term, at least. Also, unlike the moratorium on term loans that was open for all, only those borrowers …

RBI keeps key policy rates unchanged
4 years, 4 months ago

RBI keeps key policy rates unchanged

The Hindu  

The Reserve Bank of India kept its powder dry in the third review of the monetary policy since the COVID-19 pandemic spread in the country, leaving key policy rates unchanged in the face of rising inflation pressures but asserted that propping up economic recovery has assumed “primacy” in the “worst peace-time health and economic crisis of the last 100 years”. …

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