Non- banking financial companies (NBFC) have been instructed by RBI not to charge pre-payment penalties on floating rate term loans, including housing loans. 2 months earlier RBI has also asked the Banks for the same, now RBI has instructed the NBFC to follow the same.
RBI stated that in order to bring the consistency with regard to prepayment of various loans by borrowers of banks and NBFCs, the RBI has asked the NBFC not charge the pre payments on floating rate term loans. The floating term loans include housing, corporate, vehicle and personal loans. This measure will also assist in enhancing the customer protection.