Mumbai, Nov 25 (UNI) Taking serious note of some banks resorting to ''unfair'' practice of levying fees in addition to a processing fee without prior information to the borrower, the Reserve bank of India (RBI) today urged Banks to strictly follow the guidelines on fair practices code for lenders.
The Guidelines issued by the Apex Bank needed banks to include information about the fees to be charged by them, irrespective of all categories of loans, and the application form for lenders should be comprehensive.
RBI in a circular to all banks, released here today said, ''It has come to our notice that some banks levy in addition to a processing fee, certain charges which are not initially disclosed to the borrower. It may be mentioned that levying such charges subsequently without disclosing the same to the borrower is an unfair practice.'' RBI said application forms should include information about the fees/charges, if any, payable for processing, the amount of such fees refundable in the case of non acceptance of application, pre-payment options and any other matter which affects the interest of the borrower, so that a meaningful comparison with that of other banks can be made and informed decision can be taken by the borrower.
''Banks/Financial Institutions are therefore advised to ensure that all information relating to charges/fees for processing are invariably disclosed in the loan application forms. Further, the banks must inform 'all-in-cost' to the customer to enable him to compare the rates charged with other sources of finance,'' the circular read.
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