Stop levying pre-payment penalty – RBI
The Reserve Bank asked urban co-operative banks (UCBs) to stop levying penalty on pre- payment of home loans on floating interest rates with immediate effect.
Earlier this month, RBI had also asked the commercial banks to stop charging such penalties.
The removal of foreclosure charges or pre- payment penalty on home loans will lead to reduction in the discrimination between existing and new borrowers and competition among banks will result in finer pricing of the floating rate home loans, said RBI
RBI in its monetary policy for 2012-13 had proposed that banks should not be permitted to levy such charges with a view to bring uniformity across the banking system in the home loan segment.
To read more real estate news:
Home loan enquiries up over 18 per cent: CIBIL
Source: Finance Chronicle
[...] has made sure that RBI should look at all the possible options to provide an impetus to the housing [...]