NHB has planned to make decisions regarding the waiver of prepayment charges on home loans

By | September 2, 2011

A recent press report said that the National Housing Bank (NHB) has planned to take a decision on whether there will be a complete on floating-rate home loan.

According to Mr. R. V. Verma, NHB chairman and managing director told the press that the decision will be in the best interest of the borrowers. He also said that borrowers should exercise the option of pre- paying their loans, he did not mention if the pre-payment charges would be banned.

Reports said that the RBI has recently issued an advisory that banks should waive pre-payment charges on floating-rate home loans but the NHB will be responsible to make decisions for housing finance companies.

Mr. Deepak Parekh, Chairman, Housing Development Finance Corporation has opposed the RBI’s proposal on a complete waiver. He said that the pre-payment charges were a source of income for the banks, and these should not be stopped.

He also said that the RBI has to understand that there may be greater ‘substitutional’ housing finance and not ‘incremental’ housing finance taking place, if prepayment charges were completely waived.

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.
Category: Articles Glossary Tags: , ,

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.

Leave a Reply

Your email address will not be published. Required fields are marked *