Disposal of loan proposals should be time-bound: RBI
In order to speed up the process of credit decision, the RBI has asked banks to set up a timeline for clearance of loan proposals, but did not assign a specific time frame for the same.
RBI in its notification held that the Banks should openly delineate the process for disposal of loan proposals, with suitable timelines, and put in place an appropriate monitoring method for reviewing applications awaiting beyond the specified period. Banks who should make appropriate disclosures about timelines by conveying credit decisions via their websites, notice boards, product literature, etc. However, RBI held that the banks should not compromise on due diligence requirements.
The move has come following the undue delays by banks to convey credit assessments.