0% EMI schemes officially banned
The RBI has cracked down on zero percent interest schemes, demanding that all banks charge uniform processing fees and interest rates.
The Reserve Bank of India (RBI) has asked all banks to discontinue the zero percent interest schemes that have been offered with credit cards for many months now. It said that banks should now offer uniform interest rates and processing charges on equated monthly instalment (EMI) schemes.
According to reports, the RBI said that the interest rate is simply passed on to customers via a processing fee. “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.