Central Bank waived-off prepayment penalties on housing loan

By Accommodation Times (www.accommodationtimes.com)

One of the India’s biggest money lenders Central Bank of India has followed the foot steps of State Bank of India and ICICI Bank by ending up prepayment charges on floating rate home loans on higher priority basis. “Contrary to Reserve Bank of India’s proposals, the Central bank has decided to abolish prepayment charges on floating rate home loans”, bank’s senior officials said.
After waiving of prepayment charges there will be no penalties on housing loans of the bank for both new as well as existing borrowers, the Central Bank of India Chairman and Managing Director, Mr. M.V. Tanksale, said.
In Mumbai, this waiver scheme on foreclosures has already implemented by the state owned money lender where the borrowers were making payments from their own sources.
Similarly, in the previous month SBI and ICICI Bank has decided to deter prepayment penalties. However, Housing finance companies has already been barred from charging foreclosure charges. On the other hand in October month National Housing Bank (NHB) directed all the housing finance companies to desist from imposing a pre-payment penalty on home loan borrowers.