RBI for periodic interest reset on long-term fixed-rate loans for loan takers

Jan 22 2013, 22:05 IST
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SummaryRBI suggested banks reset interest instead of charging a fixed rate throughout tenure.

regard, the report suggested that banks explore the option of take-out financing apart from promoting securitisation market for better asset liability management.

The report maintained banks should charge pre-payment penalty on fixed rate loan products on the outstanding amount only, adding penalty should be reasonable so that it does not act as a disincentive for the fixed rate loan borrowers.

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