RBI panel proposes measures to make bank loan process hassle-free for customers

1.    RBI panel proposes measures to make bank loan process hassle-free for customers 

i. Penalty for banks that harass customers by delaying transfer of loans from one to the other, doing away with processing fee for shifting within the same bank from one type to another and an industry benchmark base rate for borrowers are among the recommendations of a central bank panel on pricing of loans to make processes smoother for retail borrowers.

ii. "Indian Banks' Association should evolve a set of guidelines for easier and quicker transfer of loans, particularly mortgage/housing loans," said a report submitted by a panel headed by former deputy governor Anand Sinha. "There could also be penalties for banks which do not cooperate with borrowers in this regard.'' 

iii. Banks will also have to give their customers the choice of prepaying and exiting a loan, if the recommendations of this committee are implemented.

iv. The central bank had set up this committee to bring transparency in credit pricing and address customer complaints relating to downward stickiness of the interest rates, discriminatory treatment of old borrowers vis-a-vis new borrowers and arbitrary changes in spreads.