Legal Question in Banking Law in India

we buy a sme loan for 7 years ,2 years completed we go to other bank ,but they charge penalty for pre matured of loan why i willpay this money .iwllpay all the loan amount


Asked on 6/27/15, 12:44 am

2 Answers from Attorneys
Fca Prashant Chavan Expert Edge LLP

27.06.2015

Dear Sir / Madam,

All Banks and financial institutions are permitted by the Reserve Bank of India to charge 1% to 2% as "prepayment charges" on premature repayment and settlement of the loan. You are entitled to negotiate and minimize the percentage of these charges, especially if the loan amount being prepaid and repaid is high.

Regards,

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Answered on 6/27/15, 4:45 am
J. Radhakrishnan independent Practice

I understand that RBI has recently liberalized the terms of premature payment, pl. get in touch with RBI on their DBOD site and get the required assistance.

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Answered on 6/28/15, 5:14 am


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