| Date: |
20-12-2002
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| Notification No: |
RBI Notification No 53/2002
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| Issuing Authority: |
RBI
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| Type: |
Notification
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| File No: |
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| Subject: |
Levying of Service Charges and Inspection Charges by Banks in respect of Priority Sector Loans
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Levying of Service Charges and Inspection Charges by Banks in respect of
Priority Sector Loans
RPCD.
Plan. BC. 53 - 04.09.01- dated 20th December 2002
In
terms of the guidelines on lending to priority sector issued to banks (as
reproduced in the Master Circular on Lending to Priority Sector dated 11
November 2002), no service charges are to be levied on priority sector loans,
except by way of reimbursement of reasonable out of pocket expenses. Banks can,
however, levy inspection charges in the manner specified in the guidelines.
2.
The issue of levying service charges and inspection charges in respect of
priority sector loans has been reviewed by us in consultation with the Indian
Banks' Association (IBA). It has been decided that no service charges or
inspection charges should be levied by banks on priority sector loans up to Rs
25,000/-. In the case of loans above this limit, however, banks will be free to
prescribe service charges with the prior approval of their Boards in terms of
circular No. DBOD. Dir. BC. 86/ 03.01.00/ 99-2000 dated September 7, 1999.
3.
In view of the above, Paragraphs IV.7 and IV.9 of the Master Circular on
Lending to Priority Sector (RPCD. No. Plan. BC. 42A/ 04.09.01/ 2002-03 dated
November 11, 2002) stand modified.
4.
Please acknowledge receipt.
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