...Pre-payment charge is a very clear banking canon. Because I will be suffering a loss as a result of money coming back into my system before time, I am charging the customer. It is not a penalty but a charge. Suppose you decide to pre-pay the home loan, the bank will accept the offer. But still I am going to have an opportunity loss of the money coming back to me. Hence, I am levying some charge to only offset the loss and nothing more....
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