Several changes have been suggested by the committee to Reserve Bank of India on the customer services by the banks. The panel has even suggested to uniform rates for the new as well as old borrowers that belongs to the same class. The committee was headed by the former SEBI Chairman Mr. M. Damodaran.
The committee said "In a floating interest rate scenario, when an entire class of borrowers has the same characteristic and risk level, the point of entry in time (old customers and new customers) should not create discrimination in interest rate offered to the customers."
It also said "Banks should not impose exorbitant penal rates towards foreclosure of home loans and a policy should be devised to ensure that the customer is not denied of opportunity to enhance his economic welfare by making choices such as switching to other banks/financial entities to enjoy the benefits conferred by market competition."
There has been a constant argument going that the banks offer better terms to the new borrowers as compared to the old ones, the report suggested that instead of a whole package the lender must design products the are appropriate for the customer and suits his requirements.
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