RBI Decision on Loans: The Reserve Bank of India today did not reduce the repo rate in the last monetary policy for the financial year 2023-24. However, such a decision was given for the banks which will be a boon for those taking retail and MSME loans but it can have an impact on the profits of the banks.
RBI gave a big order to banks
The Reserve Bank of India (RBI) today decided to make it mandatory for banks to provide 'Key Fact Statement' (KFS) including interest and other terms to lenders for all loans given to retail and MSMEs. Currently, this KFS is mandatory only for loans to individual loan takers by commercial banks, digital loans and micro finance loans by RBI-regulated entities (REs).
What is 'Key Fact Statement'
The Key Fact Statement is a document that clearly explains the terms and conditions of the loan. It provides important information about the loan agreement in a simple and easy to understand format, including the full cost of the loan including charges, communication charges, fees etc. When the banks give this to the customers (loan holders), they will know what is the interest component in their EMI and what is the component of other charges.
RBI Governor Shaktikanta Das announced today
RBI Governor Shaktikanta Das, while announcing the bi-monthly monetary policy, said the central bank has recently announced a number of measures to promote greater transparency and disclosure by REs in pricing of loans and other charges levied on customers. .One such measure is to require the lender to provide its borrowers with a KFS containing key information regarding the loan agreement in a simple and easy to understand format.
Borrowers will get help in taking decisions about bank loans
RBI Governor said, "It has been decided to make it mandatory for all REs to provide KFS to borrowers for all retail and MSME loans." Shaktikanta Das said that providing important information about the terms of the loan agreement including all-inclusive interest costs will greatly help the borrowers in making an informed decision.
Bank stocks fell today
After this decision of RBI, the bank stocks which were rising in the morning fell after the policy announcements. In fact, banks will now have to provide more clear information to their customers so that it will become easier for borrowers to compare whether their loans are expensive or cheap. After this, some doubts can be seen regarding the loan and due to this the bank shares suffered losses today. In today's session, Nifty Bank index closed with a huge fall due to the fall in banking stocks. Nifty Bank closed at 45012 with a fall of 1.76 percent. Out of 12 stocks of Nifty Bank, 9 stocks closed with a decline. There was a huge decline in the shares of private banks.
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