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).

• FDCM invites application for empanelment of practising CAs/ Chartered Accountant Firms
• PGRI invites application for CAs for empanelment for Circulation Verification work
• CBDT notifies revised Form for registration as valuer & authorised income tax practitioner
• Curtailing time to file reply to notice u/s 148A(b) from 30 days prejudiced assessee’s right – HC
• For registration u/s 12AB, applicability of proviso to section 2(15) can’t be adjudicated

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