The Reserve Bank of India (RBI) on December 29, 2023, issued a notification regarding the Extension of the Timeline for Implementation of Instructions for Fair Lending Practice - Penal Charges in Loan Accounts
The following has been stated namely: -
• This has a reference to the RBI circular DoR.MCS.REC.28/01.01.001/2023-24 dated August 18, 2023, on ‘Fair Lending Practice - Penal Charges in Loan Accounts’.
• It states that the instructions were to come into effect from January 01, 2024, and after considering that certain clarifications and additional time have been sought by some regulated entities to reconfigure their internal systems and operationalize the circular,
• it has been decided to extend the timeline for implementation of the instructions by three months. Accordingly, REs shall ensure that the instructions are implemented in respect of all the fresh loans availed from April 01, 2024, onwards.
• It further states that in the case of existing loans, the switchover to the new penal charges regime shall be ensured on the next review/ renewal date falling on or after April 01, 2024, but not later than June 30, 2024.
[Notification No. RBI/2023-24/102 DoR.MCS.REC.61/01.01.001/2023-24]
