In order to protect consumer interest, RBI has banned zero per cent interest rate scheme for purchase of consumer goods. In a notification issued from Mumbai yesterday, RBI has said that the very concept of zero per cent interest is non-existent and such schemes only serve the purpose of alluring and exploiting vulnerable customers. RBI said that banks should neither resort to any practice that would distort the interest rate structure of a product nor hide any processing fees. With regard to subvention, RBI said that the loan amount sanctioned for any purchase should be only after all the benefits and discounts are passed on to the customer fully and indiscriminately, without tampering with the applicable rate of interest.

The RBI has also said that consumers should not be levied any additional charge for payments made through debit cards. The apex bank further said that all banks must stop these practices as they violate the very principle of fair and transparent pricing of products which beholds customer rights and protection, especially, in the more vulnerable retail segment.