RBI Decision on Loan Penalty: If you have taken a loan from a bank or finance company, then you will not have to pay any penalty even if you do not pay the loan on time. Because RBI has refused to take separate penal interest i.e. interest charged as a penalty on loan interest rates from banks.
RBI said that instead of charging interest on interest, banks should charge separately. The process of adding penal interest to the principal amount should be stopped. It has also been suggested to make the fee charged as a penalty transparent and not to charge huge charges. RBI may soon issue a new guideline regarding this rule.
According to media report, giving information about the decisions taken in the RBI MPC meeting, it was said that there is a need for transparency and proper guidelines regarding the penalty and interest rate on loans and credit cards. At present, each credit card issuing entity decides on its own interest and penalty. At present, there is no such guideline on the basis of which the decision regarding penalty and interest should be taken.
RBI will prepare a draft related to the guidelines
RBI says that it will first prepare a draft related to the guidelines. After this, it will be discussed together with different stake holders like banks, multiple entities and borrowers and then the final guideline will be issued. When the final guideline will be issued by RBI in this regard, then this rule will be applicable to all banks, NBFCs and other financial entities.
Additional interest up to 1-2% per month
Apart from credit cards, charges on various types of financial transactions including loan EMI, check bounce will be included in the purview of RBI guidelines. The aim of the Reserve Bank is to bring transparency and uniformity regarding all types of charges. At present, a penalty of up to 1-2 per cent is imposed every month for not paying the EMI on the loan on time.
Apart from this, a separate late fee charge is also collected. The rules for each entity are different. When the guidelines of RBI will be released, from then only one rule will be applicable for every entity.
