The new bank loan rules will prove to be a boon for borrowers and banks. Facilities like digital process, insurance payments, and flexible EMIs are making the system simple and transparent.
While reforming the banking sector, the Reserve Bank of India (RBI) and banks have implemented several new rules, which will not only provide relief to the borrowers but will also make the banking system more humane. Under the new guidelines, concrete steps have been taken to make the loan process transparent and simple as well as reduce the financial burden of families.
Loan repayment through insurance policy
Now after the death of a loan holder, his family will not be under pressure to repay the outstanding loan. The loan amount will be paid through the insurance policy (Loan Repayment through Insurance Policy). This rule will help protect families from financial crisis and help banks recover outstanding loans.
Strict scrutiny on small loans
From January 1, 2025, the credit history and repayment capacity of borrowers will be analyzed in depth for small loans. This step will reduce small loan defaults and help borrowers repay the loan on time.
Settle the loan quickly without additional charges
Loan repayers will no longer have to pay pre-payment charges. This rule will be especially beneficial for those customers who want to settle the loan quickly when their financial condition improves.
Changes in non-collateral loan process
The document process for personal and business loans is being simplified. The use of digital platforms (Digital Loan Process Simplification) will speed up the process and customers will start getting loans in less time.
Transparency of interest rates
Customers will now get the benefit of affordable and transparent interest rates based on their income and credit history (Transparent Loan Interest Rate Calculation). This move will help borrowers meet their financial goals.
Loan approval based on repayment capacity
Now banks will ensure that the loan amount is in line with the borrower’s repayment capacity (Loan Default Prevention through Capacity Check). This step will not only reduce the problem of loan default but will also increase the responsibility of banks.
Improvement in bankruptcy management system
If a borrower becomes unable to repay the loan and is declared bankrupt, a new system (Bankruptcy Management for Personal Loans) will be implemented. This process will ensure a fair solution for both parties.
Promotion of digital loan process
Digital loan platforms are being promoted in collaboration with fintech companies and banks. With this, customers can apply for loan from home, making the process faster and transparent.
Flexible EMI options
Customers can now customize their EMI according to their income and financial position. This facility has been implemented specifically for personal loans (Flexible EMI Options for Personal Loans), which will provide relief to the borrowers.
Effective Implementation of Government Loan Schemes
Banks have to ensure that the benefits of government loan schemes reach the eligible customers on time. This step will prove to be important for the weaker sections of the society.
