RBI Bars Banks from Charging Prepayment Fee on Floating Rate Term Loans

The Reserve Bank of India (RBI) on Wednesday barred banks from levying foreclosure charges or pre-payment penalties on individual borrowers for all floating rate loans with immediate effect. "In the interest of their consumers, banks should consider allowing their borrowers the possibility of prepaying floating rate term loans without any penalty. Accordingly, it is advised that banks will not be permitted to charge foreclosure ...