Share on LinkedInShare on LinkedIn

ARTICLE · 11 JULY 2025

RBI: Directions On Pre-Payment Charges Imposed By REs

Argus Partners
Argus Partners
Contributor
Argus Partners

Argus Partners

Argus Partners is a leading Indian law firm with offices in Mumbai, Delhi, Bengaluru, and Kolkata....

View firm profile
Explore more from Argus Partners

On July 2, 2025, the Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025 ("Directions") were issued by the Reserve Bank of India ("RBI").

IndiaFinance and Banking
Aastha
Aastha
Astha Singhania
Astha Singhania
Author LinkedIn connections

On July 2, 2025, the Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025 ("Directions") were issued by the Reserve Bank of India ("RBI"). The Directions intend to regulate the pre-payment charges levied by Commercial Banks (excluding Payments Banks), Co-Operative Banks, All-India Financial Institutions and Non-Banking Financial Companies ("REs") in relation to loans sanctioned on or after January 1, 2026.

Prior to the Directions coming into place, the regulatory landscape for prepayment charges was fragmented, with different rules applying to different categories of REs and loan types. As a result, the REs invariably followed divergent practices regarding the levy of prepayment charges/ penalties.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

View source

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

Banking & Finance Updates September 2026

In August 2026, the Reserve Bank of India (RBI) released the draft Reserve Bank of India (Interest Rates on Loans and Advances) Directions, 2026, proposing a comprehensive framework for the way regulated entities determine and apply interest rates on loans. While the Indian banking sector has long operated under a patchwork of institution specific instructions, the draft Directions seek to bring much-needed consistency to interest rate regulation across banks, cooperative banks, regional rural banks (RRBs), all-India financial institutions and NBFCs. If finalised in their present form, the Directions will come into effect from 1 April 2027.
IndiaFinance and Banking
King, Stubb & Kasiva
King, Stubb & Kasiva
Article

A Guide To Insider Trading Laws In India!

In the world of finance, the term insider trading often evokes images of shady deals and hidden agendas. But what exactly is insider trading? Why is it illegal, and how do laws in India seek to prevent it? Let's dive into this intriguing subject, simplifying the complexities surrounding insider trading laws in India, while exploring the impact of these laws on the financial markets and their role in maintaining fairness.
IndiaFinance and Banking
MZM Legal, Advocates & Legal Consultants
MZM Legal, Advocates & Legal Consultants
Article

Received A DRT / Sarfaesi Notice? A Borrower’s And Guarantor’s Guide To Response Timelines And Defences

The Debts Recovery Tribunal, also known as DRT, follows certain rules which relate to the time limits mentioned in the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act or the Act). These limits are not merely procedural requirements and instead are factors which influence the right of the borrower or guarantor depending on the stage of recovery proceedings in question.
IndiaFinance and Banking
Maheshwari & Co. Advocates & Legal Consultants
Maheshwari & Co. Advocates & Legal Consultants
Article

Supreme Court Clarifies Applicability Of SARFAESI Remedies For A Secured Creditor Who Acquires An NPA From A Non-notified NBFC

In Kotak Mahindra Bank Limited v Trupti Sanjay Mehta and Others, 2026 INSC 943 (Kotak Mahindra), the Hon’ble Supreme Court of India considered whether a bank as defined under Section 2(1)(c) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) could invoke the provisions of the SARFAESI Act to recover a secured debt acquired from an entity which was not covered under the ambit of the SARFAESI Act at the time of disbursement of the loan.
IndiaFinance and Banking
Khaitan & Co.
Khaitan & Co.
Article

Maharashtra Introduces A Dedicated Stamp Duty Regime For Bank And Financial Guarantees

The Maharashtra Stamp (Fourth Amendment) Act, 2026 introduces a new dedicated stamp duty framework for financial and bank guarantees in Schedule I of the Maharashtra Stamp Act, 1958. This amendment establishes differentiated duty rates based on guarantee value and type, addressing long-standing ambiguities in how such instruments were previously taxed under generic security bond provisions. The reform has significant implications for banks, NBFCs, and entities dealing with government contracts, though quest
IndiaFinance and Banking
Acuity Law
Acuity Law
Article

No Private University To Operate As A Profit-Making Institution: Supreme Court’s Recent Order

The Supreme Court vide its recent order dated September 17, 2026 (“Order”) in the matter of Ayesha Jain v. Amity University, Noida & Ors., [W.P. (C) No. 531/2025] came down heavily on the manner of operation of universities and issued a series of stringent directions requiring greater disclosure by universities, including with respect to their finances, admissions, staffing, grievance redressal and regulatory compliance
IndiaFinance and Banking
LexCounsel
LexCounsel
Article

Overview Of The Consumer Protection (E-Commerce) (Amendment) Rules, 2026

Argus Partners maintains offices in Mumbai, New Delhi, and Bengaluru, providing legal services across India's major business centers. The firm operates under strict Bar Council of India regulations that prohibit solicitation and advertising, with this website serving purely informational purposes. Users must acknowledge that no attorney-client relationship is created through website access and should seek independent legal advice for specific matters.
IndiaCorporate/Commercial Law
Argus Partners
Argus Partners
Article

Revision to EPF Wage Ceiling: Coverage, Contributions and the September Transition

The Indian government has raised the EPF wage ceiling from Rs. 15,000 to Rs. 25,000 per month, effective mid-September 2026, creating immediate compliance questions for employers. How should contributions be calculated for the transition month when the change takes effect partway through the wage period, and what treatment applies to employees who become newly covered versus those already enrolled?
IndiaEmployment and HR
Argus Partners
Argus Partners
Article

Cracking The Code II: The New Central Labour Rules At A Glance

India's Ministry of Labour and Employment has formally notified the central rules under four Labour Codes, introducing significant changes to wage computation, social security benefits, industrial relations frameworks, and occupational safety standards. These rules operationalise India's consolidated labour law framework with digital-first compliance, inclusive welfare infrastructure, and enhanced protections for women, transgender persons, and contract workers.
IndiaEmployment and HR
Argus Partners
Argus Partners
Article

GOBARdhan: India's National Unified Scheme For Compressed Biogas

India's compressed biogas (CBG) sector is poised for significant expansion through the GOBARdhan Scheme, a Rs. 237 billion initiative spanning 2026-2036. The scheme introduces six strategic components including assured offtake mechanisms, stable pricing frameworks, capital assistance, pipeline infrastructure development, credit guarantees, and ecosystem support funds. What opportunities does this comprehensive policy framework create for domestic and international investors seeking to participate in India's
IndiaEnergy and Natural Resources
Argus Partners
Argus Partners
Article

Supreme Court Clarifies Exceptional Scope Of Relief Under Section 9 Pending Challenge To Arbitral Award

Argus Partners maintains offices in three major Indian cities - Mumbai, New Delhi, and Bengaluru - providing legal services across the country. The firm's strategic presence in these key metropolitan areas enables comprehensive coverage of India's primary business and commercial centers. Contact information and physical addresses are provided for each location to facilitate client engagement.
IndiaLitigation, Mediation & Arbitration
Argus Partners
Argus Partners