Reserve Bank of India (RBI) has instructed banks and NBFCs to review their practices immediately. Instances of excessive interest charges on loans have prompted this directive, revealed during the RBI's examination of regulated entities. The circular highlights several unfair practices, including charging interest from the loan sanction date rather than disbursement, and levying interest for the entire month regardless of the loan period. Banks are advised to refund excess interest and consider online transfers for loan disbursal, promoting transparency in financial dealings.