Borrowers must be informed when loan EMIs are reset by lenders.
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has opted to enhance transparency in the process of adjusting interest rates for equated monthly installments (EMIs) on loans with floating interest rates.
Governor Shaktikanta Das disclosed this development on Thursday while announcing the MPC’s resolutions. He stated, “A transparent framework is being proposed to regulate the adjustment of interest rates on loans with floating interest rates.
This framework will mandate Regulated Entities to (i) clearly inform borrowers about changes in tenor and/or EMI adjustments; (ii) offer choices for transitioning to fixed-rate loans or early loan closure; (iii) disclose any associated charges linked to these options; and (iv) ensure effective communication of crucial information to borrowers.”
