Display loan interest rates on websites, RBI tells banks

Shiv Kumar

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Tribune News Service

Mumbai, January 23

The RBI has asked commercial banks to display loan interest rates and processing fee on their websites with effect from April 1 this year.

“Banks should display on their websites the interest rate range of contracted loans for the past quarter for different categories of advances granted to individual borrowers along with mean interest rates for such loans,” the notification issued by RBI said.

The central bank said total fee and charges applicable on various types of loans to individual borrowers should be disclosed at the time of processing of loans. The RBI said displaying the information on banks’ websites would bring in transparency and allow customers to compare rates and charges and thus allow for informed decision making.

The RBI has also asked banks to publish Annual Percentage Rate (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 lenders.

Banks are also asked to provide a clear, concise, one-page key fact statement, in a prescribed format, to all individual borrowers at every stage of the loan processing as well as in case of any change in any terms and conditions, the RBI said.

In order to give banks sufficient time to comply with the above instructions, the RBI has asked banks to comply with the additional guidelines by April 1, 2015.