National Housing Bank (NHB) has indicated on soon coming with directives regarding prepayment of home loans by borrowers.
Usually in case the borrower prepays the loan from his own funds, banks do not charge any penalty. The directives the thus meant for the clause when the borrower wishes to prepay by means of borrowing another loan for the same.
NHB which is the umbrella body governing most of the housing finance companies (HFCs) has however not taken a firm decision as to prepayment penalty should be totally removed in the above situation or not.
According to CMD of NHB, Mr R V Verma, "We are looking into the situation of commercial refinance. Guidelines or a circular will be issued on this. We are co-ordinating with the RBI so that we can come up with norms that could be uniformly applicable to the entire housing finance industry."
While HFCs come under NHB, all banks in India are under the regulation of Reserve Bank of India.