As per a report in Business Standard, the Retailers Association of India (RAI), a body representing regional and national retail chains, will make a representation to the Reserve Bank of India (RBI) to defer its decision to ban 0% equated monthly installment (EMI) schemes.
Earlier this week, the central bank had come down heavily on these financing schemes saying they short-changed customers. "Since the very concept of zero percent interest is non-existent and fair practice demands that the processing charge should be kept uniform product/segment-wise, irrespective of the sourcing channel, such schemes only serve the purpose of alluring and exploiting the vulnerable customers," the central bank had said in its notification.
Retailers, however, say the timing of the move is inappropriate coming as it does just ahead of the festive season. Typically, the October to December period is crucial since 30% of consumer durable and electronic product sales happen during these months. In the last few years, 0% financing has become quite attractive as consumers aspire to buy the latest products, especially in categories such as mobile phones and television sets. In the absence of these deals it is feared that the average spends will reduce by upto 20%.