Mumbai, Jan 23 (KNN)  In order to promote transparency in operations and pricing of credit, the Reserve Bank of India (RBI) has  asked banks to display information on lending rates and fees and charges applicable for various loans on their website.

The instructions to banks are based on the recommendations of Working Group on Pricing of Credit, an official notification said on Thursday.

“Banks should display on their website the interest rate range of contracted loans for the past quarter for different categories of advances granted to individual borrowers along with mean interest rates for such loans,” it said.

Further, “The total fees and charges applicable on various types of loans to individual borrower should be disclosed at the time of processing of loan as well as displayed on the website of banks for transparency and comparability and to facilitate informed decision making by customers,” it said.

RBI has also asked banks to publish Annual Percentage Rate (APR) or such similar other arrangement of representing the total cost of credit on a loan to an individual borrower on their websites so as to allow customers to compare the costs associated with borrowing across products and/ or lenders.

In addition, they should provide a clear, concise, one page key fact statement/fact sheet, as per prescribed format to all individual borrowers at every stage of the loan processing as well as in case of any change in any terms and conditions. The same may also be included as a summary box to be displayed in the credit agreement.

In order to give banks sufficient time to comply with the above instructions, it has been decided that the additional guidelines will come into force with effect from April 1, 2015, the apex bank said. (KNN/ES)