State Bank of India has decided to abolish pre-payment charges on home loans, giving some succour to borrowers who want to foreclose their accounts. The decision from the largest lender will prompt other lenders to follow the suit
New Delhi: State Bank of India (SBI), the country’s largest lender, has decided to abolish pre-payment charges on home loans, giving some succour to borrowers who want to foreclose their accounts, reports PTI.
“We have decided to do away with the pre-payment charges on all kinds of housing loans with immediate effect,” a senior official of the bank told PTI.
The bank has been charging pre-payment penalties only on housing loans with floating interest rates taken before May 2011, the official said. It has been charging about 2% of the outstanding amount as penalty if borrowers opted to foreclose their loans.
The decision from the largest lender will prompt other lenders to follow the suit.
The total outstanding home loan of SBI rose to Rs92,383 crore at the end of September against Rs86,769 crore in March 2011.
At present, some banks are charging up to 2% as pre-payment penalty on the loan outstanding, if a borrower settles the full payment before maturity by switching over to another lender.
No pre-payment fine is charged if borrowers pay using their own funds.
It may be noted that the Reserve Bank of India (RBI) has indicated that it would scrap prepayment penalties charged by banks.
“It is proposed to implement the recommendations of the Damodaran Committee, on which a broad consensus has emerged, as also the action points which were identified by the IBA (Indian Banks’ Association) and BCSBI (Banking Codes and Standards Board of India) in the last Banking Ombudsmen conference,” RBI had said in its mid-year credit policy review.
Housing finance regulator National Housing Bank (NHB) has directed all housing finance companies to desist from imposing a pre-payment penalty on home loan borrowers last month.
The levy of a charge on borrowers for pre-closure of housing loans by housing finance companies (HFCs) has been considered further by the NHB in the light of subsequent developments and it has been decided that hereafter, housing finance companies should not charge a pre-payment levy or a penalty on pre-closure of housing loans, the regulator had said in a notification.
In addition, the NHB has also directed all HFCs to have uniform and not differential rates of interest for old and new borrowers that have the same credit or risk profile.
The standard variant of the Honda motorcycle is priced at Rs65,198 (ex-showroom, Delhi)
Honda Motorcycle & Scooter India (HMSI) today launched a new variant of its 150 cc bike -- CB Unicorn Dazzler, priced up to Rs 66,198 (ex-showroom, Delhi.)
The new Deluxe variant of CB Unicorn Dazzler will be available by the end of November, 2011, the company said in a statement.
Technical specifications of both standard and deluxe variants will remain the same, it added.
While deluxe variant will be available in two colours and is priced at Rs66,198 (ex-showroom, Delhi), the standard variant is priced at Rs65,198 (ex-showroom, Delhi).
Driven by a 150cc engine, the CB Unicorn Dazzler has a power of 14 BHP and comes with tubeless tyres and alloy wheels. It is BS-III norms compliant.
"Our installed capacity for Nano is 2.5 lakh units per annum and we are presently producing 10,000 cars per month," R Ramakrishnan, VP (commercial), passenger car business head of Tata Motors Ltd said.
Tata Motors, maker of the world's cheapest car Nano, is producing it at less than half of the annual installed capacity of 2.5 lakh units, a senior company official said today.
"Our installed capacity for Nano is 2.5 lakh units per annum and we are presently producing 10,000 cars per month," R Ramakrishnan, VP (commercial), passenger car business head of Tata Motors Ltd, said.
Launching the new version of SUV Sumo here, Ramakrishnan told reporters, however, that Nano sales are increasing every month.
To penetrate the rural markets more, the company is in the process of setting up exclusive Nano outlets with the target segment being those owning two-wheelers, he said.
Regarding market share in the SUV segment, he said the company is taking steps to arrest the decline.
"At present, out market share in the overall SUV category is 14% which is lower than previous years," he said.
Tata Motors is introducing more fuel efficient models to buck the industry trend of sagging sales, owing to high fuel costs and increased interest rates, he added.
In the late afternoon, Tata Motors was trading at around Rs173.15 per share on the Bombay Stock Exchange, 2.76% up from the previous close.