The Reserve Bank of India Governor Shaktikanta Das on Wednesday, while announcing Monetary Policy decision, said that banks and non-banking finance companies (NBFCs) cannot leavy foreclosure or pre-payment penalty charges on individual borrowers who have taken floating rate term loans.
“Banks and NBFCs are not permitted to leavy foreclosure charges or pre-payment penalties on any floating rate term loans sanctioned to individual borrowers for non-business purposes,” Governor Das said.
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Governor Das also proposed similar mechanism to include loans sanctioned micro and small enterprises.
“It is now proposed to broaden the scope of these guidelines to include loans to micro and small enterprises. A draft circular in this regard shall be issued for public consultation,” Das said.
In a sperate decision, the central bank also decided to enhance limits for UPI transactions for better user experience and faster adoption.
The RBI has enhanced limit for UPI 123Pay transactions to Rs 10,000 from Rs 5,000 and UPI Lite’s wallet limit has been increased to Rs 5,000 from Rs 2,000 and per transaction limit has been enhanced to Rs 1,000 from Rs 500.
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“To further encourage wider adoption of UPI and make it more inclusive, it has been decided to enhance the per-transaction limit in UPI123Pay from Rs 5,000 to Rs 10,000 and increase the UPI Lite wallet limit from Rs 2,000 to Rs 5,000 and per-transaction limit from Rs 500 to Rs 1,000,” Governor Das added.
The MPC by a majority of five out of six members decided to keep the repo rate unchanged at 6.50 per cent for tenth time in a row. The MPC however, unanimously decided to change its policy stance to ‘neutral’ from ‘accommodation’.
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The MPC noted, “Headline inflation is on a downward trajectory,” while also acknowledging that moderation may occur, albeit with potential elevation due to a higher base.
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