Levy of Foreclosure Charges/Pre-payment Penalty on Floating Rate Loans – NBFC barred

The Reserve Bank of India has decided that as a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loans by borrowers of banks and NBFCs, it is advised that NBFCs shall not charge foreclosure charges/pre- payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.