RBI took a big step for loan takers, it will be mandatory for banks to give this statement to customers

Reserve Bank of India Governor Shaktikanta Das informed about the decisions taken in the MPC meeting today. This time also it has been decided to keep the repo rate stable. Let us tell you that RBI has taken a big step to bring transparency in loans. All lenders will be required to offer KFS for both personal and small and medium enterprise (MSME) loans.

Feb 8, 2024 - 14:50
RBI took a big step for loan takers, it will be mandatory for banks to give this statement to customers

For people who are taking out bank loans, the Reserve Bank of India (RBI) made a significant move on Thursday. All lenders are required by the Reserve Bank of India (RBI) to furnish borrowers with "Key Fact Statements" (KFS) for loans to small and medium-sized enterprises (MSME) as well as for personal use.

Up until now, only loans made to individual borrowers by commercial banks, digital loans made by RBI-regulated entities (REs), and microloans were subject to KFS requirements. Information regarding the terms of the loan agreement, including the total cost of interest, will be included in the KFS.

The governor of the RBI stated that KFS will have accurate interest-related information, enabling loan applicants to make wise decisions.

The Reserve Bank Governor said the central bank has announced several measures in recent times to promote greater transparency by regulated entities (REs). One such measure is that loan providers will be required to provide their customers with a KFS containing important information regarding the loan agreement in a simple and easy-to-understand format.

Additionally, they also announced new options to hedge gold price risk, including allowing shortlisting of gold prices in the over-the-counter (OTC) market at the International Financial Services Center (IFSC) in GIFT City. Is included.

According to Das, the decision was made to prevent swings in the price of gold in the IFSC OTC segment. Related instructions will be released separately by the Central Bank.

A review of the regulatory framework for electronic trading platforms (ETPs) was also announced by RBI. The governor of the RBI stated that there has been a notable shift in the technological landscape, a rise in product diversity, and a greater degree of integration between the "offshore" and "onshore" forex markets in recent years.

Das also declared that by 2023, 37 crore people would be using the Aadhaar-linked payment system (APS) and that the RBI planned to improve its security features.

Muskan Kumawat Journalist & Writer