RBI directs banks, other lenders not to levy pre-payment charges on biz loans to individuals, MSEs

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The Reserve Bank of India has issued new directives. Banks cannot charge pre-payment fees on floating-rate loans. This applies to individuals and micro, small enterprises. The rule covers business loans. It also includes other loans to individuals. Small finance banks and regional rural banks have some exceptions. These rules apply to loans sanctioned after January 1, 2026.