Abolition of foreclosure-charges on pre-payment of loans
Reserve Bank of India (RBI) has once again issued circular dated 02.08.2019 clarifying that banks shall not charge foreclosure charges or pre-payment penalties on any floating-rate term-loan sanctioned for purposes other than business to individual borrowers with or without co-obligant(s). Earlier about a decade back, RBI in an RTI response dated 03.09.2009 had clearly stated that RBI does not approve policy of charging penalty or foreclosure charges.
In this period of ten years, RBI had waived concept of foreclosure-charges in a phased manner rather than totally like starting from such waiver only for home-loans. But even the latest circular dated 02.08.2019 has not completely met with RBI policy of not approving foreclosure-charges as revealed in ten-years old RTI response dated 03.09.2009. Latest circular dated 02.08.2019 is applicable only in respect of banks that too not in respect of business-loans. In continuation of RBI policy of giving undue favours to Non-Banking-Financial-Companies NBFC, latest circular dated 02.08.2019 is not applicable on NBFCs.
RBI must stick to its ten-year old stand of not approving basic concept of foreclosure charges since such an anti-public concept deprives people of getting rid of being loan-burdened. RBI should issue a fresh unconditional circular abolishing basic concept of foreclosure-charges even for business-loans and NBFCs for all types of loans.
Subhash Chandra Agrawal
Practical step to strip security of ex-PM Dr Manmohan Singh
Central government has moved practically to downgrade security of Prime Minister Dr Manmohan Singh from highest SPG-protected to Z-plus thus leaving SPG cover only to four persons including present Prime Minister, UPA Chairperson Sonia Gandhi her two children namely Priyanka Gandhi and Rahul Gandhi. All these SPG-protection did deserve super-high SPG security-cover because of serious life-threats to these family-members of late Prime Ministers Indira Gandhi and Rajiv Gandhi from supporters of Khalistani movement and erstwhile LTTE. Thus it is totally unfair of Congress to criticise cut in security-cover of Dr Manmohan Singh to that of Z-plus category from earlier SPG-protected that too when it is not traditional to provide SPG security-cover to former Prime Ministers.
It is time to study Sweden model where luxury and privileges like official cars, private drivers, private secretaries, parliamentary immunities etc are not provided to politicians including ministers and Parliamentarians. Only Prime Minister of Sweden is provided such necessities due to security and other practical reasons. Even salaries of Parliamentarians is only double of that of a an ordinary school-teacher. Even richest and biggest democracy of the world USA provides only half of last drawn salary to a former President as the only post-retirement benefit.
(The views expressed by the author in the article are his/her own.)