Penal Interest Charged on Entire Loan — Not Just Overdue Amount
Your digital lender is charging penal interest on the entire loan balance when you miss one EMI, rather than only on the overdue (missed) EMI amount.
⚖️Your Rights Under RBI Regulations
Penal charges must be levied only on the overdue outstanding amount — not on the entire loan.
Penal charges cannot be capitalised (added to principal and charged interest on).
This applies to all lenders — banks, NBFCs, and digital lending apps.
💰 What You Can Recover
Refund of excess penal charges calculated on the entire loan vs the overdue amount.
⏱ Response Deadline
30 days for written complaint.
📋Step-by-Step — What to Do
Calculate correct penal charge (on missed EMI only) vs what was charged (on full loan).
Write to the GRO with your calculation.
File with RBI Ombudsman if unresolved.
🏛 Where to Escalate If Bank Doesn't Respond
RBI Integrated Ombudsman — cms.rbi.org.in
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