IANS | 09 Feb, 2024
The RBI on Thursday announced that it is mandatory for regulated
entities such as NBFCs to provide ‘Key Fact Statement’ (KFS) in a simple
format to borrowers for all retail and MSME loans.
This would
provide critical information about the terms of the loan agreement,
including all-inclusive interest cost, which will greatly benefit the
borrowers in making an informed decision, the RBI said.
The
Reserve Bank has announced several measures in the recent past to foster
greater transparency and disclosure by the regulated entities (REs) in
pricing of loans and other charges levied on the customers. One such
measure is the requirement for lenders to provide their borrowers a Key
Fact Statement (KFS) containing the key information regarding a loan
agreement, including all-in-cost of the loan, in simple and easy to
understand format.
Currently KFS is specifically mandated in
respect of loans by scheduled commercial banks to individual borrowers;
digital lending by REs; and microfinance loans.
