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Avoid frequent ad hoc review of loan facility for businesses: RBI to banks

RBI said that an analysis of practices followed by the lenders has brought out certain supervisory concerns including frequent and repeated ad-hoc review of credit facilities instead of regular review

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"We advise that all banks should follow above instructions in letter and spirit," the RBI added.

2 min read Last Updated : Aug 22 2020 | 12:10 AM IST

Concerned over frequent changes in loan facility to businesses, the Reserve Bank on Friday asked all the lenders, including urban cooperative banks and small finance banks, to avoid repeated ad hoc and short review of credit facilities without justifiable reasons.

Industry sources said the RBI directive comes in the backdrop of complaints that banks are charging high differential interest rates and not giving adequate financial support to businesses in line with the announcements made by the government from time to time to help the crisis-ridden industry.

"...timely and comprehensive review/renewal of credit facilities should be an integral part of the

Topics : Reserve Bank of India Indian Banks Loan deals

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