RBI Governor warns banks, NBFCs over slapping extra fees on customers

Mumbai, June 7 (SocialNews.XYZ) RBI Governor Shaktikanta Das on Friday sent a clear message to banks and NBFCs against charging extra fees and high interest rates on loans to customers.

“In general, we have observed that guidelines on Key Facts Statement are followed, but a few banks and NBFCs still charge fees, etc. that are not specified or disclosed in the statement,” Das said at a press conference after the monetary policy committee meeting.

“It has also been observed in some micro-finance institutions and NBFCs that the interest rates on small-value loans are high and appear to be usurious,” the RBI Governor pointed out.

The regulatory freedom enjoyed by banks and NBFCs in respect of interest rates and charges should be used judiciously to ensure fair and transparent pricing of products and services. The Reserve Bank continues its constructive engagements with such financial entities to safeguard the interest of customers and ensure overall financial stability, he added.

Das also said that in November last year, the RBI had flagged certain concerns on excessive growth in the unsecured retail loans and over-reliance of NBFCs on bank funding. Recent data suggests that there is some moderation in these loans and advances, he added.

“We are closely monitoring the incoming data to ascertain if further measures are necessary. The Boards and top management of banks and NBFCs should ensure that risk limits and exposures for each line of business are kept well within their respective risk appetite framework,” he said.

The RBI Governor also observed that the persisting gap between credit and deposit growth rates warrants a rethink by the Boards of banks to re-strategise their business plans.

A prudent balance between assets and liabilities has to be maintained,” he added.

Source: IANS