RBI asks banks/FIs to disclose all information relating to processing fees / charges


As per Reserve Bank of India Circular dated March 6, 2007 , banks / FIs were advised that loan application forms in respect of all categories of loans irrespective of the amount of loan sought by the borrower should be comprehensive. It should include information about the fees/charges, if any, payable for processing, the amount of such fees refundable in the case of non acceptance of application, pre-payment options and any other matter which affects the interest of the borrower, so that a meaningful comparison with that of other banks can be made and informed decision can be taken by the borrower.

2. Some banks still levy in addition to a processing fee, certain charges which are not initially disclosed to the borrower. RBI has identified levying of such charges without disclosing the same to the borrower as an unfair practice.

3. Banks / FIs are therefore again advised by RBI on the November 25, 2008, to ensure that all information relating to charges / fees for processing are invariably disclosed in the loan application forms. Further, the banks must inform Ďall-in-costí to the customer to enable him to compare the rates charged with other sources of finance.

For related RBI Guidelines on Fair Practices Code for Lenders ...Click Here

FOR RBI POLICIES ...Click Here

FOR SPECIAL SECTION ON SEBI NOTIFICATIONS ...Click Here



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