The Hindu Business Line : ABN Amro waives penalties on home loan prepayments

Speaking to reporters here, ABN - Amro's Executive Vice President and country representative, Mr Romesh Sobti said, "There will be no prepayment penalties for borrowers beyond five years."

The bank would also permit prepayments of up to 25 per cent of the principal per year. Prepayment penalties currently being levied by housing finance companies range from 2 per cent of the outstanding principal up to 5 per cent.

This package is being offered along with the new home loan plan, which follows a step-up interest rate as a promotional scheme. Under the scheme, the interest rate will be enhanced by 50 basis points in the second year from six per cent fixed for the first year.

Along with this scheme, the Bank also offers a fixed rate loan, irrespective of the loan tenor or amount. ABN AMRO has also tied up with ICICI Lombard for providing insurance cover to borrowers, which would be in the nature of a credit risk cover package. The premiums for the insurance package would be loaded on to the Equated monthly instalments payments of the borrowers, according to Mr Sandeep Bakhshi, Managing Director and Chief Executive Officer of ICICI Lombard. This insurance package allows for coverage of the entire outstanding loan payment of the customer in the event of death or permanent disability.

Referring to the bank's BPO operations in the country, he said that the bank proposed to increase the headcount in all the three centres of Delhi, Mumbai and Chennai.

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