Taking serious note of complaints from the micro, small and medium enterprises (MSME) sector on non-acknowledgment of loan apppications by lenders according to guidelines, the Reserve Bank of India (RBI) on Wednesday directed banks to strictly follow the rules and give it an action-taken report in this regard by the end of the month.
“We have been receiving complaints from industry associations/chambers that banks are not acknowledging loan applications,” RBI said in a notification.
“It is, therefore, reiterated that the banks should mandatorily acknowledge all loan applications, submitted manually or online, by their MSME borrowers and ensure that a running serial number is recorded on the application form as well as on the acknowledgment receipt.”
The central bank 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,” it said.
RBI has directed lenders to send an acknowledgment receipt on Wednesday's notification and submit an action taken report by January 30.
According to 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 bank, in 2009, had 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.