Penal Charges on Loan Accounts - Kissht

Overview

This page provides information about penal charges applicable to loan accounts as per Reserve Bank of India guidelines.

RBI Guidelines on Penal Charges

The Reserve Bank of India has issued a circular (No. DoR.MCS.REC.28/01.01.001/2023-24) dated August 18, 2023, outlining "Fair Lending Practice - Penal Charges in Loan Accounts." The guidelines specify that penalties should be treated as penal charges and not as "Penal Interest."

Effective Date

Effective from April 1, 2024, any applicable Penal Interest will be categorized as Penal Charges for your loan account.

Penal Charges Structure

One-Time Penal Charges

Loan Amount Penal Charge
Less than ₹7,000 ₹150 upfront
Greater than ₹7,000 ₹200 upfront

Daily Penal Charges

₹50 per day

Tax Applicability

Note: Penal charges are subject to GST as per applicable Goods and Services Tax (GST) laws in India, which will be charged separately.

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