Home loan borrowers looking to pre-pay their floating-rate loans better watch out. Banks could recover charges for such pre-payments, what with the RBI still to issue any directions or guidelines prohibiting levy of such charges.
As part of efforts to improve customer service of banks, the annual conference of banking ombudsmen had earlier this month suggested that banks not recover pre-payment charges on floating rate loans.
“Till now, it is only a recommendation being considered by the RBI. Based on the formal response of the IBA, our regulatory department would then take a considered view and then communicate the guideline or the instructions of the RBI on this to all the banks,” Mr M. Rajeshwar Rao, Chief General Manager of RBI, and the Banking Ombudsman, said here today.
Banks have been asked to examine the proposal, and the comments from the Indian Banks Association (IBA) is expected by this month end, Mr Rao added.
Almost 98 per cent of the loans provided by commercial banks now are on floating rate.
On an issue related to ombudsman duties, Mr Rao said efforts would be taken to bring down the time taken for resolution of complaints. “Our attempt this year will be not to keep complaints open for more than three months,” he said.
PSU BANKS
For July-June 2011, the office of ombudsman at New Delhi received 10,508 complaints, 13 per cent lower than the 12,613 received in the previous year.
The highest number of complaints were received from Delhi, followed by Haryana.
About 41 per cent of the complaints were against public sector banks, 36 per cent against private sector banks and 15 per cent against foreign banks. The maximum complaints were against SBI, followed by ICICI Bank and HDFC Bank, Mr Rao said. Card related complaints accounted for 32 per cent, he added.
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