RESERVE BANK OF INDIA (PRE-PAYMENT CHARGES ON LOANS) DIRECTIONS, 2025SR. NO.CIRCULAR NO.DATESUBJECT1.JUNE 5, 20122.JUNE 15, 20123.JUNE 18, 20124.JUNE 26, 20125.MAY 7, 20146.MAY 26, 20147.MAY 27, 20148.AUGUST 2, 20199.FEBRUARY 17, 2021 (AS AMENDED FROM TIME TO TIME)10.OCTOBER 19, 2023 (AS AMENDED FROM TIME TO TIME)

MUMBAI, India, July 2 -- Reserve Bank of India issued the following notification:

RBI/2025-26/64

DoR.MCS.REC.38/01.01.001/2025-26

July 2, 2025

Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025

Availability of easy and affordable financing to Micro and Small Enterprises (MSEs)1 is of paramount importance. However, Reserve Bank's supervisory reviews have indicated divergent practices amongst Regulated Entities (REs) with regard to levy of pre-payment charges in case of loans sanctioned to MSEs which lead to customer grievances and disputes. Further, certain REs have been found to include restrictive clauses in loan contracts/ agreements to deter borrowers from switching over to another lender, either for availing lowe...