RBI firm on Scrapping Pre-payment Penalty
Reserve Bank of India (RBI) officials believe there is no justification for banks to charge pre-
payment penalty on any loan since the entire system has moved to floating rates, be it deposits or loans where rates are charged based on the prevailing markets, though with a lag of a few days or weeks. The central bank had advised lenders to stop levying such penalties.
payment penalty on any loan since the entire system has moved to floating rates, be it deposits or loans where rates are charged based on the prevailing markets, though with a lag of a few days or weeks. The central bank had advised lenders to stop levying such penalties.
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