1.All the lenders are obliged to carry out proper due diligence to ascertain the applicants’ liabilities and income sources so that total installments including payments on account of credit card do not exceed 50% of their gross salary and other regular income.
2.Personal loans will be setup for a maximum tenor of 48 months. However if a borrower retires before full repayment, his loan will be restructured from the date of retirement so that his total repayments do not exceed 30% of income (or pension salary).
3.Existing loans will continue in accordance with the present arrangement and documentation. However no top ups, deferrals or rescheduling will be permitted beyond eligibility in terms of salary multiplier, tenor and repayment percentage.
4.Banks should formulate specific policy on top ups and rescheduling in order to restrict their frequency. It should be ensured that there is no ‘ever greening’ of loans to disguise problem or delinquent loans.
5.In case of Islamic banks, they have to ensure that in case of prepayment, adequate rebate is allowed to a customer so that final charge to him does not exceed the level given in Annexure 2 to the Circular.