RBI proposes rules making banks and NBFCs loan pricing transparent
The Reserve Bank of India (RBI) has proposed new rules to make how banks and NBFCs price their loans more transparent.
Right now, loan rates can feel all over the place, especially since banks and NBFCs follow different systems.
The RBI's goal: Help borrowers actually understand what they are paying for, so you can compare options without the confusion.
RBI draft calls for spread freeze
Starting April 1, 2027, lenders will not be able to tweak most parts of your loan spread for three years, unless your credit risk changes.
Any shifts in benchmark rates for covered loans must be passed on within three months, except for agriculture loans, smaller rural and urban cooperative banks, and Base Layer NBFCs.
For smaller personal loans (up to ₹50,000), there will be a board-approved ceiling on the annual percentage rate (APR).
Plus, lenders will have to clearly show what goes into your loan pricing.
If you have thoughts on the draft directions on interest rates on loans and advances, RBI is open for feedback until September 11, 2026, and the draft on Non-Banking Financial Companies-Credit Facilities is open for feedback until August 28.