RBI Guidelines on Penal Charges on Loan Accounts

The Reserve Bank of India's (RBI) latest guidelines on penal charges on loan accounts have come into effect from 1st April, 2024,

About the Guidelines

  • Prohibition: The norms prohibit commercial banks and finance companies from charging borrowers’ penal rates on loan defaults or any other non-compliance event.
  • Penal Charges: Under the new rules, penalty, if charged, for non-compliance of the material terms and conditions of the loan contract by the borrower should be treated as ‘penal charges’.
  • Penal Interest: It cannot be levied in the form of ‘penal interest’ that is added to the rate of interest charged on the advances.
  • No ....
Do You Want to Read More?
Subscribe Now
To get access to detailed content
Buy May 2024 Issue

Already a Member? Login here

Take Annual Subscription and get the following Advantage
The annual members of the Civil Services Chronicle can read the monthly content of the magazine as well as the Chronicle magazine archives.
Readers can study all the material before the last six months of the Civil Services Chronicle monthly issue in the form of Chronicle magazine archives.
Be an Annual Subscriber
Economy Watch