If you have taken a loan and you have not been able to fill it, then many different charges are charged by the bank. In such a situation, it directly affects your total outstanding amount and then it goes on growing. Regarding this, now the Reserve Bank of India i.e. RBI has made a new rule. Indeed, instructions have been issued to ensure transparency in the revelations of penalty and interest rates in loan accounts. In cases of non-payment of loans under this new rule, now only panel charges will be imposed on the bank-concerned customer. You can learn about this rule in the next slides in detail ...

Understand rules in easy words:-
Number 1
The Reserve Bank of India has ordered a change in penalty rules on loan accounts that, now the country's banks and non-banking financial companies i.e. NBFCs will not be able to use 'interest penalty' as a way to increase income. You can understand in easy words that if a borrower is not able to fill the EMI at the scheduled time or the EMI is bounced, then it can be fined on it but that fine will not be imposed interest.

Number 2
According to the new rule, if a customer is fined for not complying with the terms and conditions of the loan, he will be considered as a 'punitive fee'. Also, interest on advances to be added to the rate will not be imposed as 'punitive interest'. In such a situation, no separate interest will be calculated on charges. However, this will not affect the normal process of interest in the loan account.

The new rule will be applicable from these days
This decision of RBI will benefit crores of people. At the same time, if we talk about the date of implementation of this rule, then these guidelines will be effective from January 1, 2023, that is, these new rules will be applicable from this day and all banks will have to follow them.

Who else will benefit?
As soon as this RBI rule is implemented, those customers will benefit from filling EMIs.
Customers who do not fill out EMI will not be able to put penalties arbitrarily on the bank.
The bank has made it clear that the penalty that should be imposed should not exceed a limit.

The new rule will apply to these institutions:-
Commercial bank
Cooperative bank
NBFC Companies
Housing Finance Companies
Exim bank
NABARD
NHB
Sidbi
All India Financial Institute including NABFID.

Where will not apply?
This rule issued by RBI will not apply to credit cards, external commercial borrowings, and business credits. In such a situation, this will not be a new rule for customers associated with these services.

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