MRTPC orders inquiry into 'floating' home loan rates

NEW
DELHI: Puzzled by the manner Banks levy differing 'floating involvement rates' from
new and existent customers, the just trade patterns organic structure MRTPC have initiated a
probe into how loaning establishments get at these rates. After receiving complaints
from existing place loan clients that they were not offered the benefits of low
interest rates extended to new customers, the MRTPC directed its investigation
arm DGIR to examine how Banks can get at two different rates, although the
benchmark charge per unit - Floating Mention Rate - is only one for each institution. According to sources, the
Monopolies and Restrictive Trade Practices Committee experiences that the pattern of
banks using low involvement rates to court new clients while forcing the old ones
to pay higher rates was prejudiced and restrictive under the MRTP Act. Moreover, the Committee has
also noticed that the Banks are discouraging their clients from repaying the
loan ahead of the tenure, by imposing unreasonable penal interest. The banks, Committee sources
observed, also seek to suppress their clients from switching over to other
policies that pull less involvement rates. Often, beginnings added, such
switch overs are accompanied by penal involvement rates imposing restrictive burden
on the consumers. In addition,
sources said, while providing loans at floating involvement rates to customers,
banks make not explicate the elaboratenesses of calculating involvement rates which
otherwise would assist the loan searchers understand the strategy and also the
pitfalls better.