Pre closure charges levied by bank
RAJASEKARAN VAIDYANATHAN
(Querist) 17 November 2011
This query is : Resolved
I would like to know for what all loans pre closure charges are applicable.For example Term loans,Cash credit, Bank Guarantee,Letter of Credit and buyers credit.Is if imposed by Bankers tenable and if not what is the remedy
Raj Kumar Makkad
(Expert) 17 November 2011
It shall be better for you to go to concerned banker wherein you have to seek loan and enquire about their requirement as bank to bank requirement is different.
Nadeem Qureshi
(Expert) 17 November 2011
Dear rajsekharan
meet the banker, the banker have power to lieved the Pre closure charges
Sankaranarayanan
(Expert) 17 November 2011
IT all depends upon the norms of banker. so seek the head of the branch and get clear details on it and also request them to either waiver or reduce the same
Shonee Kapoor
(Expert) 17 November 2011
It depends and varies from bank to bank, however RBI is trying to create census that certain type of loans should be exempt from such charges.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
Devajyoti Barman
(Expert) 17 November 2011
The RBI has passed the directive not to charge such charges at last pre payment of mortgage loans.
prabhakar singh
(Expert) 17 November 2011
GOOD NIGHT BUT BAHOOT JANSEVA KAR CHUKA.
ANKUSH
(Expert) 18 November 2011
Generally Buyers' Credit attract a pre-closure levy called break cost, since the bank from which you have taken B.Credit would have sold this deal in the market. Similarly Term Loans also attract pre-payment penalty, for same reasons that bank's treasury would have sold this deal or taken opposite position in market. But LC/BG - m not sure . Since these are Non-Fund based facilities & no fund flow is involved so ideally there should be no pre-closure cost.
RBI's directive to banks for non charging of pre-payment charges is wrt Home Loans only (for other reasons) to arrest current economic conditions & to encourage small investors to avail home loan & to increase credit growth in already gloomy economy.
Regards:
Ankush
Raj Kumar Makkad
(Expert) 18 November 2011
Prabhakar Singh ji Chhak Chuk abhi se?
Raj Kumar Makkad
(Expert) 18 November 2011
aap to vaise hi abhi jwan hain. lge rho India.
RAJU O.F.,
(Expert) 19 November 2011
Banks generally take a processing charge while granting/sanctioning the loan in variance to the olden days. (There was no processing charge earlier.) Hence, there is no justification for banks to further charge pre-closure charges, when the borrower comes to close the loan. Some banks charge penality for cash remittance to the credit card dues. These new concepts such as processing charge,pre-closure charge, etc., are only for enriching their profits.
If the agreement executed by the borrower or the sanction ticket acknowledged by him, did not contain provision for pre-closure charge, he need not pay and hence to object such illegal practice. At the worst, you may have to pay such charges with protest, for later taking up with consumer court.
