The new charge is prepayment penalty. It means one need to pay more if he desire to pay the loan early. It doesn't sense at all. Why we pay more if we return the money early?.
Reserve Bank of India take the meeting with all the bank and they are agreed to waive the prepayment penalty, which may be 1-5% on different loans and occasions.
With this move one can easily shift the home loan from one bank to another where the common man gets better interest rate. It also increases competition between banks, which will give benefit only to customers.
However fixed rate home loan will be charged prepayment penalty as usual.
