NEWS & ADVICE : HOME LOANS
RBI insists on removal of prepayment penalty on floating rate home loans
By Joseph Samson
Sep 7, 2011
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Reserve Bank of India is consistently insisting on removing prepayment penalty charges from floating rate home loans. With RBI getting successful in this regard, banks will have to do away with prepayment charges.

Also RBI has insisted that banks bear the cost of proving the case of any dispute regarding ATM/internet fault is at the customer's mistake or not.

At the Annual Conference of Banking Ombudsmen held in Mumbai, the RBI said to banks that these steps ought to be brought to practice by them in order to avoid customer grievance and in customer interest.

Regarding doing away with prepayment penalty of floating rate home loans, RBI defends its stand saying that these type of loans leave less risk on banks' part and put it more on borrowers. It should thus be compensated with transferring of potential credit risk.


 


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