HDFC..New thread..

[Vikas Shah]

Complete waiver of all prepayment charges not advisable: Parekh

 

HDFC chairman Deepak Parekh today expressed concerns over the current regulatory opinion of removing pre-payment charges on home loans, saying the move would create problems for lenders. The Reserve Bank of India’s banking ombudsmen, at a recent conference, had suggested that banks need not impose any charges for prepaying home loans when taken under floating rates, irrespective of the source of funds.

Parekh, speaking at the CAFRAL-NHB Roundtable on Housing Finance, portended that “serious problems may arise if there is a complete waiver of all prepayment charges”.

“If our lenders are charging us pre-payment charges, why are we not allowed to charge pre-payment charges?...I don’t think it is a good sign,” he said.

He, however, was in agreement over no charges being levied on prepayments from one’s own sources: “As long as prepayments are done from a customer’s own resources, there should be no prepayment penalty levied (as is currently stipulated by NHB)”.