Fair Practice For NBFCs

Recently, the Reserve Bank of India (RBI), with a view to implement more transparency in the country’s credit system and for customer protection, prescribed broad guidelines with respect to fair practices, to be formulated and approved by the Board of Directors of all Non- Banking Financial Companies (NBFCs) including residuary, non-banking companies (RNBCs).

Pursuant to RBI’s Circular dated 28^th September 2006, NBFCs including RNBCs would have to comply with the following guidelines:

• Provide adequate information affecting the interest of borrowers in order to enable a borrower to make an informed decision. Such information should be clearly included in the loan application forms, pursuant to which, a meaningful comparison may be made with the terms and conditions offered by other NBFCs.