Mumbai, Sept 1 (KNN) RBI has asked banks to set a timeline for disposal of loan proposals and institute a suitable monitoring mechanism for reviewing applications pending beyond the specified period.

“Banks should clearly delineate the procedure for disposal of loan proposals, with appropriate timelines, and institute a suitable monitoring mechanism for reviewing applications pending beyond the specified period,” RBI said.

It is, however, reiterated that there should not be any compromise on due diligence requirements. Banks may also make suitable disclosures on the timelines for conveying credit decisions through their websites, notice-boards, product literature, etc, it added.

The central bank has also asked banks to make suitable disclosures about timelines by conveying credit decisions through their websites, notice boards and product literature, among others.

The move came after RBI noticed that there have been inordinate delays by banks to convey credit decisions, leading to delays in project implementation.

In its earlier guidelines, the RBI had stipulated that the timeframe within which loan applications up to Rs 2 lakh ought to be disposed of, should be indicated while accepting loan applications.

RBI said that banks must put in place the required system within 30 days. (KNN/SD)