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