RBI gave big relief to people who have taken loan |Jagran Business- Watch Video

Saumya JaiswarPublish Date: 17 Apr, 2023

Are you concerned about the high penal interest rates the bank charges for late loan payments? You are greatly relieved thanks to RBI. Banks have come under fire from RBI for charging excessive amounts to borrowers under the guise of penal interest rates. Additionally, the RBI has developed a plan to protect the borrowers from these exorbitant interest rates. The RBI has stated that the penalty should be assessed as a fee rather than compound interest.

According to the RBI, banks now have the authority to penalise borrowers, but this authority is being misused. They were utilising it to increase sales. "It has been observed that many regulated entities charge penalty interest rates," the RBI stated in the draught circular. In addition, there are these appropriate interest rates. The circular stated, "Penalty interest rate should not be employed as a revenue growth instrument in addition to the original interest rate. However, analyses have shown that there are different regulations among regulated businesses regarding the imposition of penal interest. Customer disagreements and complaints have resulted from this.

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