RBI Bank Loan: RBI has once again slapped financial institutions including lending banks. It said that the institutions which have wrongly charged extra interest should be immediately taken and refunded.
RBI Bank Loan
The Reserve Bank has once again slapped financial institutions including lending banks. It said that the institutions which have wrongly charged extra interest should be immediately taken and refunded. These institutions are adopting unfair methods to charge interest. This is completely wrong.
The RBI has asked the lenders to refund the excess interest and other charges collected from the customers. The RBI has issued these instructions after cases came to light that some financial institutions were adopting unfair methods to collect interest.
After the check is received by the customer, interest is charged first
The RBI said that cases have also come to light where interest was charged from the date of the cheque. After several days the check was given to the customer. Some institutions charge full interest for the month in which the loan is given. In some cases, the institution takes one or more installments from the customer while giving the loan.
Why RBI has advised banks to refund borrowers for overcharging on interest https://t.co/zFiFEcbVQ5
— The Indian Express (@IndianExpress) April 30, 2024
In view of these irregularities, the central bank has asked all borrowers to take corrective action. RBI has asked for online remittance in lieu of checks issued in some cases of loan disbursal.
In different cases, the customers have to pay more interest on the loan, which causes them losses and reduces their trust in the bank. Apart from this RBI also found that some banks/NBFCs charge interest for the entire month.
For example, you have taken a loan of Rs 10,000 and you have to pay the installment every month. While granting the loan, the bank takes Rs 2,000 in advance for the next two months installments. This means you got only Rs 8,000. But, the bank charges you interest on the entire Rs 10,000. This is incorrect because you have already paid Rs.2,000. This way you pay interest even on the unearned money.
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