On Thursday, February 8, 2024, the RBI Governor Shaktikanta Das in his Statement of development regulatory policy, announced, sets out various developmental and regulatory policy measures relating to (i) Financial Markets; (ii) Regulations; and (iii) Payment Systems and Fintech.
Key Fact Statement (KFS):
In the recent past RBI has announced several measures to foster greater transparency and disclosure by the regulated entities (REs) in pricing of loans and other charges levied on the customers, the statement said. As per the current regulations, lenders are to provide their borrowers a Key Fact Statement (KFS) containing the key information regarding a loan agreement, including the all-in-cost of the loan, in a simple and easy-to-understand format that shall greatly benefit the borrowers in making an informed decision. Currently, KFS is specifically mandated concerning loans by commercial banks to individual borrowers, digital lending by RBI-regulated entities (REs), and microfinance loans.
“Now, it has been decided to mandate all REs to provide the KFS to the borrowers for all retail and MSME loans,” it said.
Hedging of Gold Price:
Resident entities were permitted, to hedge their exposures to gold price risk in December 2022, to access recognised exchanges in the International Financial Services Centre (IFSC). It has now been decided to also allow them to hedge the price of gold in the over-the-counter (OTC) segment in the IFSC. The related instructions are being issued separately, the statement said.
Framework for Electronic Trading Platforms (ETP):
The Central Bank also announced a review of the regulatory framework for electronic trading platforms (ETPs), given notable developments in the technology landscape and an increase in product diversity, and Market makers have made requests to access offshore ETPs offering permitted Indian Rupee (INR) products.
Under the framework, which aimed to ensure fair access through transparent, safe, and efficient trading processes, robust trading infrastructures, and prevent market abuse, 13 ETPs operated by five operators have since been authorised, RBI said.
