The Reserve Bank has said that certain unexpected aberrations thrown up by the deregulation process in the banking sector have forced regulatory interventions, particularly in cases pertaining to the arbitrary revision of interest rates or equated monthly instalments (EMIs), usurious interest charges in some cases and excesses by loan recovery agents.
Speaking at the Bancon 2007 conference, Reserve Bank of India (RBI) Governor YV Reddy said, "While many improvements have taken place (due to deregulation), entirely as expected, several adverse features in regard to retail customers were noticed particularly in respect of a few banks."
As reforms progressed, the RBI assumed deregulation and competition would enhance efficiency and ensure better-than-before quality of service at a reasonable, but competitive, cost to customers.