Bank loans: How will the court ruling on arbitrator affect you

While shopping for a bank loan, most of us go through the financial documents carefully to understand EMIs and spot the hidden fees. However, one thing that typically does not merit attention is the arbitration clause tucked away in the fine print. The clause states that in case of any dispute between the parties, the matter will be settled through arbitration. In other words, neither party can approach the courts for resolution. More significantly, banks and financial institutions usually reserve the right to appoint the arbitrator, the person who will hear the disputing parties and pass the final award. While you may be confident that a dispute is unlikely, it's important to understand your rights on arbitration, especially after the recent Bombay High Court ruling.

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