RBI regulates Fair Lending Practice; curbs banks, NBFCs from compounding penal interest

Reserve Bank has issued various guidelines to the Regulated Entities (REs) to ensure reasonableness and transparency in disclosure of penal interest. Lending institutions have the operational autonomy to formulate Board-approved policies for levying penal rates of interest under the current guidelines. As a consequence of a borrower’s non-compliance with the terms of the credit facility, […]