'Banks are discouraging pre-payment of loans'

NEW
DELHI: When involvement rates travel down, Banks hold lowering of the benchmark rate. At the same time, they increase the price reduction for existing clients to go through on
the low involvement charge per unit in the
market. After receiving
complaints from existing place loan clients that they were not being offered
the benefits of low involvement rates extended to new customers, the MRTPC directed
its examine arm to probe how Banks can get at two different rates,
although the benchmark charge per unit is only one for each
institution. According to
sources, the regulator experiences that the pattern of Banks using low involvement rates
to court new customers, while forcing the old 1s to pay higher rates, is
discriminatory and restrictive under the MRTPC
Act. Moreover, the commission
has also noticed that the Banks are discouraging their clients from pre-paying
loans, by imposing penal
charges. The committee also
found the pattern of charging punishment if a client electric switches to higher
discounted involvement charge per unit loan from the 1 he contracted a loan. Practice of not
passing over benefit of autumn in involvement rates to existent borrowers
“prima facie unfair”, say
sources The MRTPC can initiate
a judicial enquiry against Banks if DGIR happens that they are depriving the
existing clients the benefit of declining involvement rates.