MUMBAI (Reuters) - The Reserve Bank of India has asked banks to offer uniform interest rates and processing fee on equated monthly instalment (EMI) credit card schemes for retail products, discouraging them from offering such products with zero percent interest.
The RBI said the interest rate charged is "camouflaged" and passed on to customer as processing fee by banks offering the zero percent EMI schemes on credit card outstanding for purchasing retail products.
"Since the very concept of zero percent interest is non-existent and fair practice demands that the processing charge and RoI charged should be kept uniform product/segment wise, irrespective of the sourcing channel, such schemes only serve the purpose of alluring and exploiting the vulnerable customers," the RBI said.
(Reporting by Suvashree Dey Choudhury and Neha Dasgupta; Editing by Anupama Dwivedi)
