A recent press report said that Banks’ discrimination of retail borrowers will reduce penal charges under many excuses which improve banks’ profits if the Reserve Bank of India implements the recommendations of a committee on customer service in banks.
Reports also said that the retail depositors do not have to stuff their money under the mattress during crisis, such as the one in 2008, as deposit insurance, last raised in 1993, may be increased five times the limit to Rs 5 lakh.
The proposals, among others, state that mortgages with similar risk profile should be charged uniformly and those presenting cheques should not be penalised for bounce, but compensated in the event of wrong returns. The responsibility of proving transactions on lost debit or credit cards that was done by the holder now shifts to banks from customers.
The RBI has recently hiked lending rates by 25 bps which is likely to make all retails loans (home loan, personal loan, car loan etc) and other loans costlier to the borrowers.