Relief: Microfinance companies will not be able to charge more interest from debt-ridden customers, know what is RBI's decision

Relief: Microfinance companies will not be able to charge more interest from debt-ridden customers, know what is RBI’s decision

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new Delhi. RBI has given great relief to the debt-ridden customers who have taken or are about to take any loan from micro finance companies (institutions). Actually, RBI has bluntly told microfinance institutions that they can fix the interest rate of the loan with certain conditions, but cannot charge more interest from the customers because these fees and rates are under the supervision of the central bank. will be within range.

Along with this, these companies will have to give loans without any guarantee to the families earning up to three lakh rupees annually. Earlier this loan limit was Rs 1.2 lakh for rural lenders and Rs 2 lakh for urban lenders. This new rule of RBI will be applicable from April 1, 2022.

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Companies cannot charge more interest
The central bank said in the guidelines that micro finance companies will have to fix a limit on loan related charges. This means that these companies cannot charge arbitrary interest from customers. Along with this, all regular units should implement a policy approved by the Board of Directors. In this, clarity has to be brought about micro finance loan price, cover, interest rate ceiling and all other charges.

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No penalty for premature repayment of loan
In its new guidelines, the RBI has said that every regular entity will have to provide price-related information about a potential borrower in the form of a factsheet. If the borrower wants to repay his loan prematurely, then no penalty should be imposed on him. However, if there is a delay in the payment of the installment, then micro finance companies can impose a penalty on the customer but that too not on the entire loan amount but on the outstanding amount only.

loan agreement in easy language
RBI said that if a lender has taken a loan, then microfinance companies can fix a maximum of 50 percent of his monthly income for loan repayment. The agreement between the micro finance companies and the customer should be in such a language that the borrower can easily understand.

Tags: bank loan, Interest Rates, RBI, Rbi policy

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