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RBI's Historic Decision, Banks Can Not Afford To Pay Advance On Loan Payments

Clearance on the charges collected by banks and NBFCs, millions of people will be benefitted

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The Reserve Bank of India (RBI) on Friday said that banks or non-banking financial companies (NBFCs) cannot levy any fees for closing the loan account by prematurely repaying loans taken by ordinary consumers at floating rates.

Home and vehicle loan borrowers will get big relief

RBI has issued two separate notifications on Friday and clarified the situation on the charges being levied by the banks and NBFC in this context. He has said that banks and NBFCs can not take extra charges for terminating the loan account by paying prematurely for loans taken by floating rate for any other purpose other than business. This notification of the central bank will provide great relief to those taking home and auto loan borrowers. Many times consumers wanted to save interest by paying the entire loan together, but the fee charged for it was so high that most consumers change their mind. Also, higher education and the customers who take personal loans will also benefit.

11 crores penalty on seven banks

RBI has imposed a total penalty of Rs 11 crore on seven banks for violation of different guidelines and rules. The central bank said on Friday that it has allocated Rs two crore each on Allahabad Bank and Bank of Maharashtra, one and a half crore rupees on Bank of Baroda, Bank of India, Indian Overseas Bank and Union Bank of India and one on Oriental Bank of Commerce Has imposed a fine of crores of rupees. During checking of the ledger accounts of these banks, it was found that they opened current accounts, operating current accounts, discounting and re-discounting on bills, classification and reporting of frauds, monitoring the end use of funds and deposits on the balance sheet date Related guidelines.
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