MRTPC probe banks on home loans

The Monopolies and Restrictive Trade Practices Commission (MRTPC) has ordered a probe into the procedure banks use when giving home loans, reports CNBC-TV18.

MRTPC probe into the procedure banks use when giving home loans. The investigation will focus on new home loan customers being offered lower rates while existing customers pay a higher rate of interest. It's something the MRTPC thinks is wrong. The commission also believes banks do not give customers the full benefit of a floating rate. When loan costs rise, banks hike interest rates, but a fall in costs is not passed on fully to the existing clients.

That's not all. The commission has also raised questions on how banks arrive at the rate of interest that customers are charged. It says, instead of the benchmark prime lending rate, banks should use an external benchmark to fix home loan rates. The investigative wing of the commission has been asked to submit its report on these issues within 60 days.