Banks to display loan charges and interest rates on website

The central banker wants to ensure transparency and empower the customer

shishir

Shishir Tripathi | January 23, 2015




The Reserve Bank of India is pushing for greater transparency in financial world and has asked all banks to display charges and loan interest rates on their respective websites to facilitate informed decisions being taken by the customer.

"Banks should display on their website the interest rate range of contracted loans for the past quarter for different categories of advances granted to individual borrowers along with mean interest rates for such loans," the RBI has said.

The RBI has also insisted that banks should also mention on websites the total fees and charges applicable on various types of loans to individual borrowers. This should facilitate borrowers taking informed decision to buy bank loans

In its “Master Circular on Customer Service in Banks” issued July last, to all commercial banks, the RBI had instructed the banks to display vital information related to key aspects such as service charges, interest rates, services offered, product information, time norms for various banking transactions and grievance redressal mechanism at their bank branches.

The apex bank observed that during the course of inspection to bank branches by RBI, it was observed that many banks were not displaying the required information “due to space constraints, lack of standardization of the instructions.”

The instructions were clearly intended at “promoting transparency” in the interest of the customers. However in less than a year after the detailed circular instructed the banks to fall in line, RBI has moved a step ahead in ensuring the transparency by instructing the banks to display loan interest rates on their websites. 

Following information has to be displayed by the banks on their websites now as mandated by RBI

1.    Interest rate range of contracted loans for the past quarter for different categories of advances granted to individual borrowers along with mean interest rates for such loans.

2. The total fees and charges applicable on various types of loans to individual borrower should be disclosed at the time of processing of loan as well as displayed on the website of banks for transparency and comparability and to facilitate informed decision making by customers.

3.  Annual Percentage Rate (APR) or such similar other arrangement of representing the total cost of credit on a loan to an individual borrower on their websites so as to allow customers to compare the costs associated with borrowing across products and/ or lenders.

Further the banks were also directed to provide a “clear, concise, one page key fact statement/fact sheet” to all individual borrowers at every stage of the loan processing as well as in case of any change in any terms and conditions. Banks have to follow the new guidelines from April 1.

Comments

 

Other News

Sowing wheat earlier can help increase yields in India: US researcher

Yield gaps in wheat production in India can be countered with an earlier sowing date, says a University of Michigan researcher.   Using a new way to measure wheat yields, Meha Jain, assistant professor at the U-M School for Environment and Sustainability, found that the wheat yie

Giving birth as a Baiga

Kharpariya village, about 50 km from the headquarters town of Madhya Pradesh’s Mandla district, is like many villages in the region, home to the Baiga, deemed a particularly vulnerable tribal group (PVTG) for whom permanent contraception methods are banned to prevent extinction. However, care for p

Being the prime minister’s brother

Somabhai Modi says he remembers only one occasion when he offered his younger brother prime minister Narendra Modi advice regarding work. This, he says, was when Modi was chief minister of Gujarat. After one of his weekly grievance redressal sessions, the then chief minister had enquired after the well-b

Should ration cards not linked to Aadhaar be rendered ineligible?

Should ration cards not linked to Aadhaar be rendered ineligible?

INS Kiltan commissioned into Indian Navy

 INS Kiltan, the third anti-submarine warfare (ASW) stealth corvette built under project 28 (Kamorta class), was commissioned into the Indian Navy by defence minister Nirmala Sitharaman at the naval dockyard in Visakhapatnam.    The anti-submarine warfare stealth corvet

SAIL`s special grade steel used to build stealth corvette

Maharatna enterprise, Steel Authority of India Ltd. (SAIL) has supplied defence grade micro-alloyed grade of steel (DMR 249A) steel plates for the indigenously built anti-submarine warfare (ASW) stealth corvette INS-Kiltan commissioned into Indian Navy.    SAIL’s integ



Video

Grand Diwali celebrations in Ayodhaya on eve of diwali

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter