My client had taken term loan from HDFC Bank in January 2010 towards funding of their expansion of existing weaving unit amounting to Rs. lac ; Out of term loan now approx 86lac Principal amount remaining due to HDFC Bank.

Since there is no requirement of funds now, The Company approached to HDFC Bank requesting to allow repayment of remaining balance premature, the banker given letter in which they have charged prepayment charges @4.41% but the same were not mentioned in terms of loan agreement.

Kindly advise rules, policy & laws upon subject in light of RBI guidelines, if any with other laws prevailing in justification of premature charges upon term loan.

Thanks
CA Pramod Khemka