SUGGESTION TO RBI

Date: 28-05-2012                                                                by email and post

Chief General Manager

Reserve Bank of India,

Customer Service Dept, Central Office,

1^st Floor, Amar Bldg,

P. M. Road, Fort, 

Mumbai 400 001

Email: helpdoc@rbi.org.in

Respected Sir,

Subject: Interest Rate Calculation by Banks

At present whenever banks calculate interest rate based on scoring chart [rating model], banks do not provide copy of scoring chart to borrowers. Usually junior officers work out the chart and fix rate of interest as per circular received from H.O. Normally borrowers do not ask for copy of scoring chart which may affect their relations with bank officers. Whenever borrowers ask for copy of scoring chart, bank managers avoid giving the same branding it as internal matter of bank, though it is accessible to borrowers under Right to Information Act 2005. Thus borrowers are kept in dark on vital issue of fixing rate of interest on working capital accounts or loans etc.

I humbly suggest that RBI should direct banks to supply copy of scoring chart with intimation of rate of interest whenever it is fixed/revised, with link of H.O. circular on interest rates on website of the bank, so that borrower knows how rate is arrived at and can even represent to the bank, if there is discrepancy in scoring chart.

This suggestion, if implemented, will ensure transparency in bank operations and borrowers will know how he can improve his ratings so that lower rate of interest is charged in future. Borrowers will also be in a position to point out errors of bank officers in scoring pattern if any.