HDFC chief insists on retaining prepayment penalty on home loans
By Joseph Samson
Oct 10, 2011
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Talks are on everywhere with regulators wanting to do away with prepayment penalty being levied on home loan borrowers for floating rate loans.

Lenders have however showed their dissatisfaction in this regard. Chairman of housing finance major, HDFC, Mr Deepak Parekh has said that with total waiver in prepayment penalty being imposed, serious implications can come up the way of lenders.

"If our lenders are charging us pre-payment charges, why are we not allowed to charge pre-payment charges? If one bank doesn't, every bank will have to. This is our source of income. We want to do more work in the future... looking forward rather than trying to protect your book, rather to control your book and rather than keep your customers within your ambit. I don't think it is a good sign," he said.

"Certainly this (greater substitutional housing finance) was not what one wants for the system," he added.


(Comments Posted : 2) Post Your Comments
1. Banks are discouraging customer to shift their loans. When ever there is an increase in interest rates, they will increase more, but not vice-versa. There are cheating the customers by increasing the Spread and always giving benefit to new customers. Axis bank is the only bank which does not charge any PRE-Payment penalty for the loan transfer. Banks has to justify existing customers before making any changes in the interest rates..
Kumar (Posted: Oct 12, 2011)
2. Defiantly HDFC deos not want to levied the pre-payment penalty as HDFC is one of the biggest cheater and knows well how to make slaves their customers. I wanted to see this HDFC without customers, then they may change their attitude. He is saying that if levied there will be serious implication, what implications, non-sense, Axis Bank is doing the same for years without any implication, why can not HDFC, this is all cheating.
Venkata (Posted: Oct 10, 2011)
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