Thursday, May 15, 2014

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.

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