Two Important notifications from RBI

The Reserve Bank of India had recently issued two important Circulars regarding the following :-

1) Levy of penal charges on non-maintenance of minimum balances in inoperative accounts.

2) Levy of foreclosure charges/pre-payment penalty on Floating Rate Term Loans.

As per the above circulars, the RBI has instructed the banks as follows :-

1) No charge shall be levied for non-operation/ activation of Basic Savings Bank Deposit Accounts. Hence there banks are not permitted to levy penal charges for non-maintenance of minimum balances in any inoperative account.

2) The banks will not be permitted to charge foreclosure/pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.

The relevant Notifications/Circulars are reproduced below :-

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