FAQs on Penal Charges in Loan Accounts
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Updated as on 4th March 2024
| The Circular is applicable from April 01, 2024. Please feel free to drop your queries in the comment box below and we will try our best to reply at the earliest. |
RBI on August 18, 2023 came up with the circular Fair Lending practice – Penal charges in Loan accounts (‘Circular’). The Circular restricts entities from charging penal interest on loan accounts, instead they should levy penalty or penal charges..
We have developed a set of FAQs on the press release and updated the same based on this Circular read along with the RBI Notification on Fair Lending Practice – Penal Charges in Loan Accounts: Extension of Timeline for Implementation of Instructions dated December 29, 2023 and FAQs released by RBI where we intend to answer some of the critical questions relating to the penal charges in loan accounts.
Our write-up on the topic can be read here – Penal charges not a cash-cow for lenders
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