Module: | KYC, NPAs, Advances & Investment Valuations
Q206: Consider the following statements regarding borrowal accounts, loan modifications, and export bill collections:
1. If a borrower requests the transfer of their borrowal account, the bank must convey its consent or objection within 21 days from the date of receipt of the request.
2. Any modifications or changes in interest rates and associated loan charges must be effected by the bank only on a prospective basis.
3. Banks are permitted to charge borrowers a nominal fee for providing a copy of the loan agreement and its enclosures at the time of sanction or disbursement.
4. For the delayed credit of export bills drawn in a foreign currency, the bank must automatically pay the FEDAI-stipulated compensation to the exporter, without waiting for a demand.
Which of the statements given above is/are correct?
2. Any modifications or changes in interest rates and associated loan charges must be effected by the bank only on a prospective basis.
3. Banks are permitted to charge borrowers a nominal fee for providing a copy of the loan agreement and its enclosures at the time of sanction or disbursement.
4. For the delayed credit of export bills drawn in a foreign currency, the bank must automatically pay the FEDAI-stipulated compensation to the exporter, without waiting for a demand.
Which of the statements given above is/are correct?
✅ Correct Answer: B
The correct answer is B. Statement 1 is correct: The guidelines guarantee borrower mobility by forcing banks to respond to account transfer requests (with consent or valid objections) within a strict 21-day window.
Statement 2 is correct: The regulatory framework protects borrowers from retrospective financial burdens by dictating that interest rate or charge changes can only be applied prospectively.
Statement 3 is incorrect: The mandate strictly states that the bank must invariably furnish a copy of the loan agreement and all enclosures to the borrower at the time of sanction or disbursement; it is a mandatory, free regulatory requirement, not a chargeable service.
Statement 4 is correct: The rules enforce automated compliance, requiring banks to pay the FEDAI compensation for delayed foreign currency export bills proactively, without waiting for the exporter to make a formal demand.
Statement 2 is correct: The regulatory framework protects borrowers from retrospective financial burdens by dictating that interest rate or charge changes can only be applied prospectively.
Statement 3 is incorrect: The mandate strictly states that the bank must invariably furnish a copy of the loan agreement and all enclosures to the borrower at the time of sanction or disbursement; it is a mandatory, free regulatory requirement, not a chargeable service.
Statement 4 is correct: The rules enforce automated compliance, requiring banks to pay the FEDAI compensation for delayed foreign currency export bills proactively, without waiting for the exporter to make a formal demand.