HDFC chief has insisted on retaining prepayment penalty on home loans

By Pradeep Yuvaraj | August 16, 2011

A recent press report said that talks are on everywhere with regulators wanting to do away with prepayment penalty being levied on home loan borrowers for floating rate loans.

The Reports said that the lenders have however showed their dissatisfaction on the regulators suggestion to do away with prepayment penalty being levied on home loan borrowers for floating rate loans.    Mr. Deepak Parekh, Chairman of housing finance major, HDFC, has said that if the total waiver in prepayment penalty is being imposed, the lenders will have to face serious implications. He said that the pre-payment charges were a source of income to banks and if one bank doesn’t charge, every bank will have to stop charging prepayment penalty.

HDFC Bank Limited is a major Indian financial services company based in India, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India.  It was among the first companies to receive an ‘in principle’ approval from the RBI to set up a bank in the private sector. The Bank started operations as a scheduled commercial bank in January 1995 under the RBI’s liberalization policies. It offers home loans, personal loans, new and used car loans, gold loan, education loan etc

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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