Fixed Interest Rates: To address this concern of the customers, the Reserve Bank has asked to create a policy framework. The Reserve Bank said, ‘At the time of loan approval, banks should clearly tell their customers that in the event of a change in the standard interest rate, what could be the effect on the EMI or loan tenure.
RBI: If you have also taken home loan or any other type of loan, then this news will make you happy. Yes, a new rule has been made by the Reserve Bank for banks and NBFCs. RBI has also issued a notification in this regard. The Reserve Bank of India (RBI) has asked banks and other financial institutions (NBFCs) to provide the option of choosing a fixed rate of interest to customers taking loans while resetting interest rates.
Immediate information should be given on increase in tenure
In the notification issued by the central bank, it was said that it has been seen that the loan tenure or EMI is increased when the interest rate increases. Not only this, the customers are not even informed about this, nor is their consent taken.
To address this concern of the customers, the Reserve Bank has asked to create a policy framework. The Reserve Bank said, ‘At the time of loan approval, banks should clearly tell their customers that in the event of a change in the standard interest rate, what could be the effect on the EMI or loan tenure. The information about the increase in EMI or loan tenure should be given to the customer immediately.
Give option to choose fixed interest rate
The central bank said that while fixing interest rates afresh, banks should give customers the option to choose fixed interest rate. Apart from this, the customers should also be informed that how many times they will get the opportunity to exercise this option during the tenure of the loan.
Along with this, the loan borrowers should be given the option of increasing the EMI or loan tenure or both. It was said in the notification that the customers should be allowed to pay the loan in full or in part before the time. This facility should be available to them at any time during the tenure of the loan.
Significantly, in the Monetary Policy Review (MPC) presented last week, the RBI had talked about allowing loan borrowers to opt for a fixed interest rate from a floating interest rate. Reserve Bank (RBI) Governor Shaktikanta Das said that a new structure is being prepared for this. Under this, banks will have to give clear information about the loan tenure and monthly installment (EMI) to the borrowers.
