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| Prepay without having to Repay |
| Posted On: 03-10-2010 |
| Competition Commission of India has taken exception to the practice of borrowers being penalised for foreclosing their loans. Some banks charge a hefty 3 to 4 percent on remaining credit in such cases to discourage long term borrowers from frequent shifting of loans. CCI feels that this is a violation of competition laws and in capacity of watchdog of monopoly and trade practices has sent a show cause notice to at least 15 banks. CCI is not in agreement of any rationale that the Indian Bankers Association might have .It is likely to fine the offending banks or prevail upon them to stop charging penal interest in case of foreclosure prepayment. |
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