Regulatory Alerts2023-08-28
Added · Updated
Is Prepayment of Periodic Working Capital Loans Permissible?
The banking regulatory authority confirms that periodic working capital loans may be prepaid by borrowers. Financial institutions are explicitly barred from levying prepayment charges or fees on such early settlements. This directive eliminates previous compliance ambiguities and guarantees cost-free early repayment for eligible corporate obligations.
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Is it permissible to prepay periodic loans of a working capital nature, or is it not?
It is permissible to prepay periodic loans of a working capital nature, and there is a provision that banks and financial institutions cannot charge prepayment fees for this.
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