The housing finance regulator said Housing Finance Companies will no longer levy any fee on floating rate loans. In case of fixed rate loans, it has made a distinction and only those borrowers who pay from their “own sources”, such as savings or even loans from relatives, will be exempted from payment of penalty. In case borrowers shift to another bank or Housing Finance Companies, the penalty will be applicable. While a similar advisory was issued last October, the NHB has said that any violation will attract penal action.
Please Note above Circular is in respect of Housing Loan from Housing Finance Companies not in respect of Loan from Banks.
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sir/ mam….. i want to close my loan against property . is pre payment penalty is aplicable in my case. my loan is based on floating rate . regards
Sir
I kundanmal bayad one indiviual loan from HDB finace company loan against property after 13 month i want to close the loan .but the HDB finance company asks preclosure penalty 4.49 for remaning principle amount .As per RBI guidelines the pre closure charges applicable or not applicable .please give details to my mail id
sir,
I taken Rs 16 lakhs loan from HDFC Bank loan against property after 20 months , now I want to switch over to other bank which is providing me loan at lesser rate of interest. But the HDFC bank asks pre closure penalty 2.8% Rs 42000/for remaining principle amount Rs 14.5 lakhs. As per RBI guidelines the pre closer charge applicable or not applicable . please give details to my mail ID.
Regrds
K.Ramesh.
sir,
I taken Rs 16 lakhs loan from HDFC Bank loan against property after 20 months , now I want to close the loan.But the HDFC bank asks pre closure penality 2.8% Rs 42000/for remaining principle amount Rs 14.5 lakhs. As per RBI guidelines the pre closer charge applicable or not applicable . please give details to my mail ID.
Regrds
K.Ramesh.
Sir do this circular applies to Loan against property from Citi financial…
Dear Manager
I am a unfortunate customer of syndicate bank and taken loan paying 11.75 % rate of interest on 10 lacs of loanA/C no 9019/721/000057.I want to switch over to other bank which is providing me loan at lesser rate of interest.However dealing officer at CPO Rajindar nagar New Delhi says that I have to pay prepayment penalty against the RBI directions.Please advise the correct rule position
if I have housing loan from one bank and wanted to switch over to another bank.If another bank gives us me business loan.If i make a payment of outstanding housing loan from my business loan account .1st bank can recover the prepayment charges? please clarify.
I have closed my home loan with Federal Bank Ltd. on 11.10.2011 and they are charged pre closure charges. As per the RBI notification it is applicable or not . kindly let me know
Regards
Ramdas
It is good thing for us. please let me know that it is also applicable for any part payment made against my principle for the housing loan?
@vswami-an addendum:
Sub: Fixed / Term Deposit- Premature closure and en-cashing
This is an area where the operating banks themselves, who are constituents of the rbi, being the statutory regulatory authority, besides being the apex bank, seem to be not at all well aware of the governing regulations.
Points requiring clear-cut clarifications are briefly these:
1. What are the rbi guidelines under which banks proceed to frame, and have been all along framing, their own rules under the guise of ‘asset liability management’?
2. What the rbi rules or guidelines say re. the applicable parameters on charges / deductions, including ‘pre-closure charges’, that a bank can legitimately levy/make at the time of ‘pre-closure’ of a ‘fixed’/’term’ deposit?
It is high-time that the RBI requires to come out with a public circular soonest, so as to put an end once for all to the highly questionable and irregular practice which each bank is learnt to have all along been indulging in / following according to its own whims and fancies, thereby unfairly playing with and gravely harming the due interests and rights of the gullible, and invariably not properly ‘informed’, investors.
Should persons having intimate knowledge and practical exposure in the subject matter or any other like matter openly express their unbiased views/ well considered opinion, that is certain to serve the larger common interests of the customers faced with such situations.
REFER ALSO THE RELATED POST @ Banks and housing finance companies under scanner for imposing penalty on pre-payment of loans – ALMOST TWO YEARS OLD.
ONE HAS NOT BEEN ABLE TO GET READILY ANY AUTHENTIC INFORMATION ON THE LATER DERVELOPMENTS OR KNOW OF THE PRESENT STATUS OF THE REPORTED CUSTOMER GRIEVANCE TAKEN UP BUT THEN PENDING WITH THE CCI. BE THAT AS IT SHOULD, WHAT IS OF COMMON INTERERST, THOUGH FOR WRONG REASONS, HENCE REQUIRING TO BE GIVEN SOME THOUGHTS IS TO A LIKE GRIEVANCE ; THAT HAS SOMETHING TO DO WITH THE PRACTICE BY BANKS , INCLUDING PSBs, OF LEVYING A ‘PENAL INTEREST’ ON PREMATURE CLOSURE OF FIXED DEPOSITS (FDs). SUCH A PRACTICE, IF CRITICALLY ANALYSED, DESERVES TO BE DUBBED BY ALL MEANS AS NOTHING BUT ANTIQUATED; ESPECIALLY IN THE CONTEXT OF THE NEAR REVOLUTIONAY CHANGES THAT ARE KNOWN TO HAVE BEEN TAKING PLACE IN RECENT TIMES IN LIKE MATTERS OF COMMON CONCERN TO THE CONSUMERS.
CERTAIN RELATED ASPECTS CALL FOR A SPECIAL FOCUS:
ACCORDING TO INFORMATION, IT IS ONLY A FEW YEARS AGO THAT THE RBI HAS COME OUT , THOUGH BELATEDLY BY ANY YARDSTICK, WITH A MANDATE TO BE FOLLOWED BY ITS CONSTITUENTS TO THE EFFECT THAT, – THE TERMS AND CONDITIONS ON WHICH THE BANKS ACCEPT DEPOSITS FROM THE PUBLIC SHOULD BE SPECIALLY MADE KNOWN TO THE INVESTORS. HOWEVER, SAME WAY AS ANY OTHER LIKE MANDATE, IN RERALITY THE INVESTEE-BANKS ARE LEARNT TO HAVE BY AND LARGE NOT ADHERED TO THE SAID MANDATE;IF AT ALL, COMPLIED WITH BY WAY OF AN EXCEPTION THAN AS A RULE.
ANOTHER BIZARRE PRACTICE THAT ONE HAS COME TO LATELY KNOW OF TURNS OUT TO BE MORE WORRISOME : SOME SMALL SIZE BANKS, , HAVE, UNLIKE MANY PSBs, NOT BEEN REGULARLY FOLLOWING BUT OFF AND ON SWITCH OVER TO LEVY OF A PENAL INTEREST FOR PREMATURE CLOSURE AND WITHDRAWAL. THAT IS DONE THROUGH AN INTERNAL CIRCULAR, THE LEVY IF AND WHEN SO RENTRODUCED IS STIPULATED TO TAKE EFFECT FROM A SPECIFIED DATE. AS SUCH, THERE COULD BE A LEVY OF PENAL INTEREST ONLY IN RESPECT OF FDs OPENED ON OR AFTER THAT DATE. NONETHELESS, WHAT SEEMS TO BE HAPPENING IS THAT, TAKING ADVANTAGE OF THE LARGELY OBTAINING IGNORANCE (OR INDIFFERENCE OR BY WHATEVER OTHER NAME ONE MAY CALL IT) AMONST THE GULLIBLE INVESTORS, THE CONCERNED BANKS ARE HEARD TO MPOSE THE LEVY EVEN IF THE FORECLOSURE IS OF A FD OPENED PRIOR TO THAT DATE.
ONE STRONGLY FEELS THAT IT IS HIGH TIME THAT THE RBI WAKES UP TO SUCH PATENTLY WRONGFUL AND OBJECTIONABLE PRACTICES IN VOGUE, COME OUT WITH A HEAVY HAND, AND RESORT TO DETTERENT ACTION AGAINST THE ERRING BANKS AS IS WARRANTED.
IN THE ABOVE BACKDROP, THE POINT FOR THE RBI TO SERIOUSLY PONDER AND TAKE AN EARLY DECISION IS THIS: THE BANKS HAVE BEEN ADVISED NOT TO IMPOSE FORCLOSURE CHARGE FOR HOME LOANS ; LIKEWISE, SHOULD NOT, APPLYING THE SAME LOGIC OR REASONING, RATHER WITH A GREATER FORCE, THE BANKS BE INSTRUCTED TO DO AWAY WITH THE UNETHICAL PRACTICE OF LEVYING A PENAL INTEREST IN CASE OF PREMATURE CLOSURE AND ENCASHMENT OF THE FDs ?
This is a very welcome step which will lessen the burden on borrowers.Perhaps the Govt should also think of applying a similar yardstick to foreclosure of Credit Card Personal Loans.
This is a very good regulation for which the borrowers were prolonging for. There are so many cases where the people are not able to pay the loan amounts due to their financial problems or increasing bank rates. And the institutions or banks are struggling to collect their dues from such accounts. But, when people are willing to pay back their dues honestly from their alternative sources, bankers are imposing penalty for pre closure of the loans. Just because of the reason that the lending institutions have a good hold of the land documents as security, they should not have done like this. Definitely the borrowers would be very much benefited by this regulation.