MUMBAI: Consumer loans will become more transparent with the Reserve Bank of India on Thursday directing lenders to disclose all associated charges in advance. The move is part of ongoing regulatory efforts to increase transparency and disclosure loan pricing and charge Imposed on customers by regulated entities.
Although the move will take a few months to be implemented, RBI Governor Shaktikanta Das said that from now on, lenders will submit borrowers With a key fact statement.”The KFS contains essential information about loan agreements including the total Cost Loan details are presented in a simple and easily understandable format. We have also asked them to mention the annual interest rate, which is necessary for transparency in loans,” said Das.
find borrowers hidden surprises
Borrowers often have difficulty knowing the true cost of a loan and often realize that there are some “hidden surprises.”
“Currently, banks disclose all the charges on a term sheet. However, a common borrower does not always read four-five pages of terms and conditions, so we made this document mandatory in microfinance and digital lending earlier Now we are asking this of all lenders,” RBI Governor Shaktikanta Das said.
The move is in line with RBI’s commitment to promote greater transparency and disclosure, thereby ensuring that consumers have the information they need to make informed decisions. With advance disclosure of charges associated with loans, consumers can better understand the real cost of borrowing, especially in the case of some short-term low value loans where the expense on charges is almost equal to the interest rates.
Although the move will take a few months to be implemented, RBI Governor Shaktikanta Das said that from now on, lenders will submit borrowers With a key fact statement.”The KFS contains essential information about loan agreements including the total Cost Loan details are presented in a simple and easily understandable format. We have also asked them to mention the annual interest rate, which is necessary for transparency in loans,” said Das.
find borrowers hidden surprises
Borrowers often have difficulty knowing the true cost of a loan and often realize that there are some “hidden surprises.”
“Currently, banks disclose all the charges on a term sheet. However, a common borrower does not always read four-five pages of terms and conditions, so we made this document mandatory in microfinance and digital lending earlier Now we are asking this of all lenders,” RBI Governor Shaktikanta Das said.
The move is in line with RBI’s commitment to promote greater transparency and disclosure, thereby ensuring that consumers have the information they need to make informed decisions. With advance disclosure of charges associated with loans, consumers can better understand the real cost of borrowing, especially in the case of some short-term low value loans where the expense on charges is almost equal to the interest rates.
