Loan: If you have taken a loan from a bank or an NBFC, then this news is going to give you relief. From April 1, the rules related to the time of default on bank loans are going to change. The RBI on Monday said the revised fair lending system, which prevents banks and NBFCs from levying penal charges on loan defaults for revenue growth, will come into effect from April 1. According to a news report, now as a means to increase revenue, banks and NBFC companies impose penalties for delay in loan payments.
Appropriate default charges will now be levied
According to the news, the RBI had amended the rules on August 18 last year in view of the concern of these penalty charges. Under which banks or NBFCs will be able to levy only ‘reasonable’ default charges. The bank has given 3 months time till April to all the government and private lending institutions to implement this rule. The new rules will come into effect from April 1, 2024.
Penalty charge is reasonable
In addition, the Reserve Bank of India has said that all the rules and penalty charges should be changed by the renewal date coming by June. On the rules applicable to default in loan repayment as per the directions dated August 18, 2023, the RBI said such default is in violation of the important terms and conditions of the repayment agreement and hence, penal charges may be levied. It would, therefore, be reasonable to impose penalty charges only on the amount of default.
Not good for wilful defaulters
IBA and NESL have said that they are working on a system to declare defaulters in a fast-track manner. Banks will now provide additional information to Information Utility Services about loan accounts that have been deemed fraudulent. According to NESL data, defaults are the highest in loans ranging from Rs 10 to Rs 100 crore in the country.