RBI asks commercial banks to display loan rates on their websites

Latest move aimed at providing transparency for borrowers The Reserve Bank of India (RBI) has asked commercial banks to display loan interest rates on their websites, a move aimed at enhancing transparency for borrowers.

"Banks should display on their website the interest rate range of contracted loans for the past quarter for different categories of advances granted to individual borrowers along with mean interest rates for such loans," the RBI said. Lenders normally add up a spread over and above their base rates -below which they cannot lend -to arrive at final loan pricing. The spread contracts or widens depending on the profile of the borrower.

The RBI has also insisted that banks should also mention on websites the total fees and charges applicable on various types of loans to individual borrowers. This should facilitate borrowers taking informed decision to buy bank loans. "The total fees and charges applicable on various types of loans to individual borrower should be disclosed at the time of processing of loan as well as displayed on the website of banks for transparency and comparability," the RBI said. It has directed banks to comply with such measures by April 1 this year.

Source : Economic Times