The Reserve Bank of India (RBI) has re-emphasised before banks and financial institutions (FIs) the need for furnishing the copy of loan agreement and copies of the disclosures to all their borrowers.
?It is understood that some banks are furnishing a copy of the loan agreement only on request made by the borrowers?, RBI said in a notification.
The central bank has advised banks and FIs 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.
It also advised them that not furnishing a copy of the loan agreement or enclosures quoted in the loan agreement is an unfair practice and this could lead to disputes between the bank and the borrower with regard to the terms and conditions on which the loan is granted.