New Delhi, March 25 -- The Reserve Bank of India (RBI) has made it clear that banks cannot impose excessive charges, particularly on smaller loan amounts under the priority sector lending (PSL) category.

The central bank stated that no loan-related and ad hoc service charges or inspection charges shall be levied on priority sector loans up to Rs 50,000. This step aims to protect small borrowers from unnecessary financial burdens and ensure fair lending practices.

It said "No loan related and ad hoc service charges/inspection charges shall be levied on priority sector loans up to Rs 50,000".

The Reserve Bank of India (RBI) has issued new Master Directions on Priority Sector Lending (PSL), which will come into effect on April 1, 2025. Th...