No Foreclosure Charges /Prepayment Penalty on Floating Rate Term Loans for non business purposes – RBI

No Foreclosure Charges /Prepayment Penalty on Floating Rate Term Loans for purposes other than business to individual borrowers – RBI

In 2012, RBI in terms of the Monetary Policy Statement 2012-13  mandated that banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis.

Again in 2014, in terms of the Monetary Policy Statement 2014-15, the RBI mandated that banks will not be permitted to charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers.

Now again the RBI has clarified that banks shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned, for purposes other than business, to individual borrowers with or without co-obligant(s).

It has also been clarified that NBFCs shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned for purposes other than business to individual borrowers, with or without co-obligant(s).

• CBDT Guidelines for compulsory selection of return for complete scrutiny FY 2024-25
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• In absence of mala fide intention bank should not be treated as assessee in default
• Whether bank account was fraudulently open in the name of assessee is question of fact
• SBI Concurrent Auditor Empanelment of Chartered Accountant Firms 2024-25. Last date 18.05.2024

addition u/s 68 ca misconduct cash deposit in bank cbdt circular CBDT Instruction cbdt notification cbdt order cbdt press release cgst circular cgst notification cit revision 263 concealment penalty covid-19 custom circular demonetisation due date extension e-way bill faq GST circular GST Council Meeting gst faq gstn advisory gstr-1 GSTR-3B GST rates IBBI ibc icai announcement itat mca circular MCA notification order u/s 119 penalty 271(1)(c) penalty u/s 271(1)(c) Press Release reasons recorded reopening 148 Reopening us 147 Search & Seizure sebi circular sebi regulations transfer and postings unexplained cash credits validity of notice u/s 148 Withdrawal of 2000 500 Bank Notes