RBI Loan Rules: The Reserve Bank of India (RBI) has recently issued some important rules related to loans. These rules have been issued especially for those who have recently received a home loan. If you do not follow all the rules issued, then in such a situation you may also be fined, and this rule is also important to prevent unfair recovery practices by the bank.

According to the new RBI rule, now there will be no need to pay extra interest or penalty for not repaying the loan. Apart from this, if any kind of physical or mental harassment is done for recovery, then in such a situation strict action can be taken against the bank. And all these major rules have been implemented from April 1, 2024.

What are the new RBI rules for non-payment of loans?

Now the bank people cannot harass a person if he is unable to repay the loan regularly.

You will not have to pay any kind of penalty. If any kind of variation has to be filled, then its documents and explanation will be required.

In case of delay in repayment of loan installment, no interest will have to be paid.

The penalty amount will not be added to the principal amount of the loan.

Complete details of penalty charges will be mentioned in the loan agreement with the bank.

No physical or mental harassment of any kind will be done during loan recovery.

Recovery by bank agents will be banned.

Before making recovery you will have to get your ID card made.

RBI rules for loan defaulters

If a person is declared a defaulter, a notice has to be sent to him first.

Full details of the default must be given in the notice.

Statement information regarding loan amount will have to be provided.

The defaulter will be allowed to present his side.

The bank cannot take possession of the property directly.

It is mandatory to follow the legal process.

Rules for Loan Recovery Agents

If any agent does the recovery then agents must have authorization from the bank.

Recovery can be done only with proof of identity.

No kind of harassment or mental stress will be given.

There will be no contact at night and without any reason.

Confidentiality should not be violated otherwise it may result in a fine.

Do not provide false or misleading information.

Loan restructuring rules

In such a situation, there is a facility to restructure up to half the loan amount.

You will get more convenience in interest rates.

The repayment period can be extended to defer the loan.

A lower EMI facility can be provided.

Additionally, a grace period may be granted.

However, to avail of these facilities it is mandatory to apply for restructuring.

rights of defaulters

Always behave appropriately.

The right to privacy must be maintained.

The complaint must be resolved immediately.

Rights should be asserted only after getting complete information.

You will always be allowed to present your side.

Mainly the legal process has to be followed.

Action taken by banks in case of non-payment of loan

A notice needs to be sent.

You will have to contact on the contact details.

You will have to go home and get the information.

The legal process has to be followed.

Your credit score needs to go down.

There will be no occupation of the property of any kind.

Recovery must be done with guarantee and information.

Consequences of not repaying the loan

Your credit score could be very bad.

The loan will not be available in the future.

You will have to face a lengthy legal process.

The property can be evicted.

Social prestige will be adversely affected.