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National Housing Bank considering penalty for switching loans in first 2 years

The National Housing Bank is considering allowing lenders to levy pre-payment penalty on housing loan customers who transfer the outstanding amount to another lender in the first two years of the loan tenure, a dampener for borrowers wanting to make the most of falling interest rates. 

Sriram Kalyanaraman, chairman of National Housing Bank, the regulator for housing finance companies (HFCs), believes that home loan 'shopping' could lead to risks building up in the system as banks and HFCs are vying for the same customers to expand their market share. 

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