Disclosure of Full Information on Credit Conditions to Borrowers
The Reserve Bank of India (RBI) has asked banks to be more transparent in displaying information about the interest rate and the fees charged on loans.
Lenders have been asked to display the interest range of loans in the past quarter, along with the average interest rate at which loans have been granted to borrowers, on their website. This is applicable to all the categories in which loans to individual borrowers have been sanctioned. Banks have also been asked to inform borrowers about the fees and charges on the loan at the time of processing.
Lenders will also have to display the charges on their website and publish annual percentage rate (APR) of loans.
“Banks should publish APR or such similar other arrangement of representing the total cost of credit on a loan to an individual borrower on their websites so as to allow customers to compare the costs associated with borrowing across products and/ or lenders,” the regulator said in a notification.
Source: Business Standard India