Home › Circulars › RBI/2007-08/119

RBI Mandates Loan Agreement Copy for All Borrowers

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2007-08/119 · issued 22 Aug 2007 · ~1 min read
Quick answerRBI has directed banks and financial institutions to provide a copy of the loan agreement and all enclosures to every borrower at sanction or disbursement, not just on request, to prevent disputes.

What changed

Earlier, banks were required to furnish loan agreements only upon borrower request. Now, RBI mandates that a copy of the loan agreement along with all enclosures must be given to all borrowers at the time of sanction or disbursement, without waiting for a request.

What it means for you

Banks must update their disbursement processes to ensure loan agreements are automatically provided to borrowers. Non-compliance is considered an unfair practice and could lead to disputes over loan terms. This strengthens borrower transparency and reduces legal risks for lenders.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All scheduled commercial banks, All India Financial Institutions (excluding RRBs), Borrowers of loans from these entities

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this circular apply to all types of loans?

Yes, the circular applies to all credit facilities covered under the Fair Practices Code for Lenders, including term loans, working capital, and other advances.

What happens if a bank fails to provide the loan agreement copy?

RBI considers this an unfair practice that could lead to disputes. Banks may face regulatory action or customer grievances if they do not comply.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2355: DBOD.No.Leg.BC.28/09.07.005/2007-08 — "Guidelines on Fair Practices Code for Lenders - Furnishing Copy of Loan Agreement" dated August 22, 2007”
📜 Read the original circular — full text as issued by RBI
RBI/2007-08/119 DBOD.No.Leg.BC. 28 /09.07.005/2007-08 August 22, 2007 All Scheduled Commercial Banks / All India Financial Institutions (Excluding RRBs) Dear Sir, Guidelines on Fair Practices Code for Lenders - Furnishing copy of loan agreement Please refer to our Circular DBOD. Leg. No.BC. 104 /09.07.007/2002-03 dated May 5, 2003 wherein guidelines were issued to banks / FIs for framing the Fair Practices Code for Lenders. 2. In terms of Para 2 (ii) (c) of the above Circular, banks / FIs were advised that terms and conditions and other caveats governing credit facilities given by banks/ financial institutions arrived at after negotiation by lending institution and the borrower should be reduced in writing and duly certified by the authorised official. Banks / FIs were further advised that a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement should be furnished to the borrower. 3. It is understood that some banks are furnishing a copy of the loan agreement only on request made by the borrowers. In this connection, we advise that not furnishing a copy of the loan agreement or enclosures quoted in the loan agreement is an unfair practice and this could lead to disputes between the bank and the borrower with regard to the terms and conditions on which the loan is granted. 4. Banks / FIs are therefore advised to invariably furnish a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement to all the borrowers at the time of sanction / disbursement of loans. Yours faithfully (Prashant Saran) Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-08/119 · issued 22 Aug 2007. The plain-English explanation above is BankPulse’s own independent summary.
🧰 Tools — save, print, templates & related
Most relevant forLoan Operations / CPC / DisbursementBranch Manager — PSU / Co-op / RRB (sanctioning powers)RM — Loans (Assets)Branch Manager — Private Bank / SFBBranch Operations (Accounts / FD / CASA)Legal / Documentation & Recovery-Legal
🛠 Banker’s toolkit — checklists & reply templates →
Related circulars · Department of Regulation
SFB Pillar 3 Disclosure Norms Aligned with BaselUCB Deposit Rate Disclosure & Uniformity Rules UpdatedLAB Deposit Rate Disclosure & Uniformity Rules TightenedPayments Banks: Interest Rates Must Match Disclosed ScheduleRBI Updates Bulk Deposit Rate Rules and Disclosure Timing
Browse all departments →

💬 Banker Discussion

Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.

Loading comments…
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3778&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
—