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Russian (RU) RBI eliminates pre-payment charges on business loans for individuals and MSEs
ET BureauLast Updated: Jul 03, 2025, 05:46:00 AM IST
Synopsis
The RBI has mandated that banks and NBFCs cease charging prepayment penalties on business loans to individuals and MSEs, regardless of co-obligants. Small finance banks, urban co-operatives, and regional rural banks must also waive these charges on loans up to ₹50 lakh. This directive applies to all prepayment sources, partial or full, without any lock-in period.
AgenciesThe directions are applicable irrespective of the source of funds used for pre-payment of loans, either in part or in full, and without any minimum lock-in period, RBI said.MUMBAI: RBI has directed banks and NBFCs to stop levying pre-payment charges on all loans granted for business purpose to individuals and MSEs, with or without co-obligant(s).
Small finance bank, urban co-operatives and regional rural banks shall also not levy any pre-payment charges on loans with sanctioned amount/ limit up to ₹50 lakh. The directions are applicable irrespective of the source of funds used for pre-payment of loans, either in part or in full, and without any minimum lock-in period, RBI said.
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