RBI tells lenders to provide key fact statement to borrowers

Key Financial Statement for personal loans: The Reserve Bank of India (RBI) has asked lenders to provide ‘key fact statement’ (KFS) to the borrowers of all new retail and MSME term loans sanctioned on or after October 1, 2024, including fresh loans to existing customers.

In a circular, RBI says all personal loans will, from October  2024, need to carry a Key Financial Statement that has the details of the actual interest rate, including all fees/charges of any loan. 
Experts suggest that this will ensure that there is no more hidden fees, while digital loans need a look free prepayment period. Besides, colending details, fees of third parties must be disclosed, says the RBI. 
The RBI circular also points out that now one can even ask for receipts for any legal or other charges at actuals. However, the compulsory KFS doesn't apply to credit cards.

Payment Aggregators

The RBI has also announced new draft directions on regulation of Payment Aggregators (PA) – Physical Point of Sale. Banks provide physical PA services as part of normal banking relationship and do not require RBI authorisation separately, said the apex bank’s circular.

As per the RBI, non-banks providing physical PA services must have Rs 15 crore minimum networth when applying to RBI for nod, Rs 25 crore by March 31, 2028.