Follow loan application acknowledgment rules: RBI to banks

MUMBAI: Taking serious note of complaints from the MSME sector on non-acknowledgment of loan apppications by lenders as per existing guidelines, the RBI today directed banks to strictly follow the rules and submit an action-taken report in this regard by the end of the month.

"We have been receiving complaints from the industry associations/chambers that banks are not acknowledging loan applications," the Reserve Bank said in a notification.

"It is therefore reiterated that the banks should mandatorily acknowledge all loan applications, submitted manually or on line, by their MSME borrowers and ensure that a running serial number is recorded on the application form as well as on the acknowledgment receipt," it said.

It also asked banks to ensure central registration of loan applications.

"The same technology may be used for online submission of loan applications as also for online tracking of loan applications," the RBI said.

The apex bank has directed lenders to send an acknowledgment receipt on today's notification and submit an action taken report by January 30.

As per the existing ' Guidelines on Fair Practices Code for Lenders' issued in 2003, banks are required to devise a system for acknowledging receipt of all loan applications.

The RBI had in 2009 advised banks to put in place a system for central registration of loan applications and to use the technology for online submission of loan applications and online tracking of loan applications.