Cap personal loan interest rates: RBI-India Business-Business-The Times of India

MUMBAI:
RBI wants commercial banks to cap the interest rates and processing charges to
be levied on borrowers of personal loans. It is acting on numerous complaints on
the excessive interst rates being currently charged on these
loans.

Of late, private sector
and foreign banks have been advancing personal loans with minimal or no
collateral to customers who can prove that they have a stable income. However,
banks charge very high interest rates and a host of hidden charges, apparently
to mitigate the risk in lending to these
customers.

The customers, often
young people, were lured into taking these easily available loans on occasions
like birthdays, weddings or sometimes in emergencies. RBI has now sought to
bring these loans under its scanner to ensure that banks don’t fleece
unsuspecting customers.