RBI asks banks not to levy foreclosure charges/ pre-payment penalties on all floating rate term loans

In a relief to borrowers, the RBI has directed banks not to levy any penalty on individual borrowers for pre-paying floating loans.

The apex banks said, it is advised that banks will not be permitted to charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.

In the first bi-monthly monetary policy statement for 2014-15 released last month, the RBI had said banks should consider allowing their borrowers the facility of prepaying floating rate term loans without any penalty in the interest of their customers.

Powered by Capital Market - Live News