NHB directs housing finance firms to pay interest on advance EMIs
The National Housing Bank (NHB) has instructed housing finance companies to provide interest on advance payments made by borrowers that have not been immediately applied to their Equated Monthly Instalments (EMIs) and are instead held in sundry or suspense accounts, according to sources familiar with the situation. The interest should be paid at the same rate applicable to the customer’s home loan. This initiative aims to ensure fair lending practices and prevent borrowers from incurring excessive interest costs when their advance payments are not applied promptly. “NHB is fundamentally ensuring that housing finance companies cannot profit from holding onto customers’…