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Banks have sought time to respond to a RBI proposal prohibiting recovery of pre-payment charges on floating rate loans.
The Indian Banks Association (IBA) is expected to send its comments on this proposal by the end of this month, Mr M Rajeshwar Rao, Chief General Manager of RBI said here on Tuesday.
Till now, it is only a recommendation being considered by RBI, he said. "Based on the formal response of the IBA our regulatory department would then take a considered view and then communicate the guideline or the instructions of the RBI on this", Mr Rao said. He also said that no definite timeframe could be given for RBI to arrive at a final decision.
Currently, almost 98 per cent of the loans in the banking system are on a floating rate basis.
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