The Reserve Bank of India (RBI) has issued a set of amendments to its banking directions and circulars, introducing measures aimed at providing flexibility to banks while enhancing benefits for borrowers. Three of these changes will take effect from October 1, while four others have been released as drafts for public comments.
Interest rate on advances: Banks can now reduce certain components of the spread on floating-rate loans to benefit borrowers sooner than the previous three-year limit. Lenders may also offer the option to switch from floating to fixed rates during interest rate resets at their discretion.
Draft guidelines open for public feedback
Gold metal loans (GML): Banks may now offer longer repayment tenors of up to 270 days and extend loans to domestic non-manufacturers outsourcing jewellery production.
Credit information reporting: Credit institutions may move to weekly reporting to Credit Information Companies to ensure more up-to-date credit information, with provisions for faster data submission, error rectification, and CKYC data capture.
Stakeholders can submit feedback via the RBI’s “Connect 2 Regulate” portal or by email to the Department of Regulation.
The RBI stated that these amendments aim to strengthen operational flexibility for banks, improve credit access for borrowers, and ensure timely and accurate credit reporting in the financial system.
