The Reserve Bank of India (RBI) on 1 September 2014 asked banks to set a timeline to process loans. The direction was issued to expedite credit decision. However, RBI didn’t set any particular time frame for it.
Apart from this, RBI also asked banks to make suitable disclosures about time lines by conveying credit decisions through their websites and notice boards. In its notification, the central bank said that Banks should clearly delineate the procedure for disposal of loan proposals, with appropriate timelines, and institute a suitable monitoring mechanism for reviewing applications pending beyond the specified period.
The decision was made by RBI after it noticed inordinate delays by banks in conveying credit decisions, leading to delays in project implementation.
When: 1 September 2014