RBI Asks Banks to Accept Electronic Mode for Loan Repayment

Reacting to the complaints from customers, Reserve Bank of India (RBI) has made it clear to all banks that there are no restrictions in using electronic modes in loan repayments. RBI asked all banks to allow their customers to use the National Electronic Funds Transfer (NEFT) facility for repaying loans.

NEFT is a system introduced in 2005, which allows one-to-one funds transfer and can easily be used for transferring funds to beneficiaries (individual, institutions etc.) without any restriction. This directive from RBI is due to the complaints from customers regarding non-acceptance of NEFT for credit to loan accounts, thereby causing inconvenience to the borrowers.