RBI asks banks to extend KFS facility to retail, MSME borrowers
The Hindu
The Reserve Bank of India (RBI) has asked lenders to extend the Key Fact Statement (KFS) facility containing essential information such as the all-inclusive annual percentage rate (APR) and recovery and grievance redress mechanism to retail and MSME borrowers.
The Reserve Bank of India (RBI) has asked lenders to extend the Key Fact Statement (KFS) facility containing essential information such as the all-inclusive annual percentage rate (APR) and the recovery and grievance redressal mechanism to retail and MSME borrowers.
At present, the loans and advances availed by borrowers, apart from including the rate of interest, also include other fees and charges such as processing fees, documentation charges.
To enhance transparency in the disclosure of such information, the RBI had mandated certain categories of lenders to provide the borrower a Key Fact Statement (KFS) containing essential information such as the all-inclusive annual percentage rate (APR) and recovery and grievance redressal mechanism.
“The requirement of KFS is now being extended to cover all retail and MSME loans. This measure will lead to enhanced transparency in lending and enable customers in making informed decisions,” RBI governor Shaktikanta Das said on Thursday while announcing this as an additional measure.
He also announced the the introduction of hedging of Gold Price Risk in the Over the Counter (OTC) market in the International Financial Services Centre (IFSC).
In December 2022, the Reserve Bank had permitted resident entities to hedge their gold price risk in recognised exchanges in the IFSC. “It has now been decided to also allow resident entities to hedge the price of gold in the over the counter (OTC) segment in the IFSC,” Mr. Das said.
“This will provide more flexibility to resident entities in hedging their exposure to gold prices,” he added.
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