look news india
A month ago, the RBI had issued guidelines on Key Fact Statement (KFS) to curb the levying of hidden charges on customers by banks or NBFCs, according to which banks cannot charge such fees or charges or rates unless the KFS is due before Friday. In the policy review, the Reserve Bank has said that there are still some REs charging charges which are not mentioned in the statement. The RBI clarified that it will discuss the issue with such banks or NBFCs or MFIs and take further necessary steps.
What did the Reserve Bank say?
RBI said that while following the guidelines on fact statement, some such regulated entities are charging customers such fees etc. which are not mentioned in KFS. He said that it has also been observed that the interest rates of some NBFCs and MFIs are quite high. The Reserve Bank said that the freedom given at the regulatory level should be considered so that the way of working is fair. The Governor said that we are seeing such trends and our focus is on such banks or NBFCs or MFIs and we will encourage them to adopt reform measures.
What is the key-fact statement guide?
In the February monetary policy review, the central bank had mandated that all regulated entities provide a statement to their retail and MSME borrowers. Which will include all matters related to that loan. This will include everything like rates, charges, recovery mechanism and grievance redressal process. For this, the bank, NBFC or MFI will have to take the consent of the customer. As per the guidelines, RE will not charge any fee or additional interest from the customer which is not disclosed or will not be disclosed in this statement.
