From forced loan recovery to fraudulent transactions, RBI makes three major announcements, benefiting millions of customers
The RBI has announced three major proposals to protect online banking customers. These include measures related to mis-selling of financial products, loan recovery, and ... read more
In the era of rapidly growing online banking and transactions in the country, the protection of customers' interests is of paramount importance and the RBI is prepared to take major steps in this regard. While announcing the monetary policy, RBI Governor Sanjay Malhotra made three major announcements, in which he proposed to introduce stricter rules on matters such as mis-selling of financial products, complaints related to loan recovery and unauthorized digital transactions.
The special thing is that in this proposal, there is also a provision to give compensation up to ₹ 25,000 to the customers in case of loss due to fraudulent transactions.
What are the 3 big announcements of RBI?- The first draft guideline will address mis-selling practices. Banks and financial institutions will be prosecuted for misrepresenting or forcibly selling loans, insurance, or investment products to customers.
- The second draft will be on loan recovery and the role of recovery agents, while the third draft guideline will deal with limiting the liability of customers in unauthorised electronic banking transactions.
- The most important thing in the third proposal will be that if a customer suffers loss in a small value fraud transaction, a separate framework will be prepared to give him compensation up to a maximum of ₹25,000.
There have been frequent complaints about loan recovery practices across the country, and the RBI has expressed concern from time to time. However, the Reserve Bank is now preparing to take strict action. According to the RBI note, "Currently, different guidelines apply to different categories of regulated entities (REs) regarding the appointment of recovery agents and other behavioral aspects related to loan recovery. It has now been decided to review and harmonize all existing behavioral guidelines on the appointment of recovery agents and other aspects related to loan recovery."
According to the RBI, it is not acceptable under any circumstances to intimidate, threaten, or pressure a defaulter. Meanwhile, industry experts say that once the compliance guidelines are issued, this will increase banks' responsibilities.
PC:Jagran