prepayment charges

The Government has informed Lok Sabha that the Competition Commission of India (CCI) has received information under section 19 of the Competition Act, 2002 against some Banks/Housing Finance Institutions with regard to anti-competitive agreements on imposing penalty for pre-payment of home loans. Full Article

The Reserve Bank of India (RBI) does not approve of penalties on foreclosure of loans and admits there is no uniformity among banks on such matters, but appears to have done little to address the problem. This is reflected in two separate sets of replies to a query under the Right to Information (RTI) Act on the issue of high rates of penalties charged on the prepayment of loans, in a practice followed by private, foreign and state-run banks alike. Full Article

Several banks and housing finance companies have come under the scanner of the competition watchdog for imposing penalty on pre-payment of loans. The Competition Commission of India, according to a CCI official, is scrutinising a complaint concerning pre-payment penalty from a customer against major home loan players like HDFC, LIC Housing Finance and Deutsche Postbank. Full Article