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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Key Facts Statement (KFS) for Loans & Advances

15-Apr-2024 | RBI/2024-25/18 DOR.STR.REC.13/13.03.00/2024-25

RBI has issued a circular regarding Key Facts Statement (KFS) for Loans & Advances.

By virtue of this Circular, following instructions on Key Facts Statement (KFS) are given: -

(i) Regulated Entities (REs) shall provide a KFS to all prospective borrowers to help them to take informed view before executing loan contract, as per standard format given in Annex A. KFS shall be written in language understood by such borrowers and shall be explained to borrower.

(ii) KFS shall be provided with a unique proposal number and have a validity period of at least three working days for loans having tenor of seven days or more, and a validity period of one working day for loans having tenor of less than seven days.

(iii) It shall include a computation sheet of annual percentage rate (APR), and amortisation schedule of the loan over loan tenor. APR will include all charges which are levied by the RE.

(iv) Charges recovered from the borrowers by the REs on behalf of third-party service providers on actual basis, shall also form part of the APR and shall be disclosed separately. In all cases wherever the RE is involved in recovering such charges, the receipts and related documents shall be provided to the borrower.

(v) Any fees, charges, etc. which are not mentioned in the KFS, cannot be charged by the REs to the borrower during the term of loan, without explicit consent.

(vi) The KFS shall be included as a summary box to be exhibited as part of loan agreement.

(vii) Credit card receivables are exempted from the provisions contained under this circular.

(viii) REs shall put in place the necessary systems and processes to implement above guidelines.

(ix) With the issue of these guidelines, instructions/guidelines contained in the following circulars, stand repealed.

1. DBR.Leg.No.BC.64/09.07.005/2014-15
2. DoR.FIN.REC.95/03.10.038/2021-22
3. DOR.CRE.REC.66/21.07.001/2022-23


For detailed information, please refer to the attached Circular.

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