How RBI policy outcome will impact home loan borrowers explained
RBI proposes transparent framework to improve flexibility and transparency of interest rates on variable-rate loans.
The Reserve Bank of India has released a key proposal with the goal of improving both the flexibility and transparency of rates of interest on variable-rate loans. “It is proposed to put in place a transparent framework for reset of interest rates on floating interest loans. The framework will require Regulated Entities to (i) clearly communicate with borrowers for resetting the tenor and/or EMI; (ii) provide options for switching to fixed-rate loans or foreclosure of loans; (iii) disclose various charges incidental to the exercise of the options; and (iv) ensure proper communication of key information to borrowers. These measures will further strengthen consumer protection," Reserve Bank Governor Shaktikanta Das said.