In the era of rapidly increasing online banking and transactions in the country, it is very important to protect the interests of customers, and RBI has prepared to take major steps in this regard. Announcing the monetary policy, RBI Governor Shaktikanta Das made three major announcements, proposing strict rules on issues like mis-selling of financial products, complaints related to loan recovery, and unauthorized digital transactions. The special thing is that this proposal also includes a provision to give compensation of up to ₹ 25,000 to customers in case of loss due to fraudulent transactions.
What are the 3 big announcements of RBI?
The first draft guideline will deal with mis-selling, or practices of mis-selling. In this it will be decided that if banks or financial institutions provide wrong information or force customers to buy any loan, insurance, or investment product, then strict action will be taken against them.
The second draft will focus on loan recovery and the role of recovery agents, while the third draft guidelines will deal with limiting customer liability in unauthorized electronic banking transactions.
The most important aspect of the third proposal is that a separate framework will be created to provide compensation to customers up to ₹25,000 in case of loss due to small fraudulent transactions.
Strict rules on loan recovery
There are frequent complaints regarding loan recovery practices across the country, and the RBI has expressed concern over this from time to time. However, now the Reserve Bank is preparing to take strict action. According to the RBI note, “Currently, different types of regulated entities (REs) have different instructions regarding appointment of recovery agents and conduct-related aspects of loan recovery. It has now been decided to review and harmonize all existing conduct-related instructions on appointment of recovery agents and other aspects related to loan recovery.”
According to RBI, intimidating, threatening or putting mental pressure on a defaulter is not acceptable under any circumstances. Meanwhile, industry experts say that after the release of compliance guidelines, the responsibilities of banks will increase.
