Banks should furnish Loan copy Agreement

According to the Guidelines on Fair Practices Code for Lenders by the Reserve Bank of India, Banks/Financial Institutions were advised that a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement should be furnished to the borrower.

Howerever certain banks in India are not furnishing a copy of the loan agreement until requested by the borrowers. with regard to this matter RBI has stated again on 22nd August 2007 that not furnishing a copy of the loan agreement or enclosure quoted in the loan agreement is an unfair practice and thi could lead to disputes between the bank and the borrower with regard to the terms and conditions on which the loan is granted.

Banks / Financial Institutions are therefore advised by RBI to invariably furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction / disbursement of loans as per RBI Guidelines (2007) on Fair Practices Code for Lenders.