RBI Loan New rules: Overall, complete information about all conditions, interest rates and additional costs will have to be given in KFS. RBI ordered that all the guidelines from its side should be implemented without any exception from October 1, 2024. RBI said that by creating a format, it will be easier for people to get all the information related to the loan.
RBI Loan New rules: The Reserve Bank of India (RBI) said that banks and non-banking financial companies (NBFCs) will be bound by the loan terms and conditions indicated in the Current Fact Statement (KFS). That means whatever charges will be there should be in one statement i.e. KFS. RBI is going to make big changes from October 1, 2024, which is expected to benefit the loan taking customers also.
Loan giving banks or institutions will now have to provide all information about the loan agreement to individuals and businesses seeking loans from October 1. Actually, this step will increase transparency and its purpose is to provide better information to the loan takers, so that they can take the right financial decisions. However, exemption has been given in case of credit cards.
What will KFS include?
Key details of the loan agreement will be part of the KFS. This will include the entire cost of the loan. In this, a unique number will be provided to the customers taking the loan and there will be a validity period of at least three working days for the loan period of seven days or more. According to RBI, what should be included in KFS? This is explained below.
-A calculation sheet of the Annual Percentage Rate (APR) and loan amortization information over the loan term. Let us tell you that APR is the annual credit cost for the borrower.
-All charges levied by RE.
-Charges charged by RE to borrowers on behalf of third party service providers on actual basis such as insurance charges and legal fees.
Overall, complete information about all the conditions, interest rates and additional costs will have to be given in the KFS. RBI ordered that all the guidelines from its side should be implemented without any exception from October 1, 2024. RBI said that by creating a format, it will be easier for people to get all the information related to the loan.
What is the benefit to customers?
As per RBI, RE cannot levy any fees or charges mentioned in the KFS without the consent of the borrower in any manner during the loan tenure. That means there is no charge for anything which is not mentioned in KFS. RBI said that the bank or any other institution cannot charge fees separately from the customers whose information is not in the KFS. In such a situation, these rules will clearly strengthen the interests of the customers.
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