The present information has been filed under section 19(1)(a) of Competition Act, 2002 (‘the Act’) by informant Neeraj Malhotra, against banking and non-banking financial companies for the levying of prepayment charges on the prepayment of amount of home loan taken. The opposite parties are private and public sector banking and non-banking financial institutions, engaged in the business of offering different types of loans including retail home loans, to the general public. Before examining the various elements of the alleged violation of the provisions of the Act, the findings of the Director General during investigation and the contentions of the Opposite Parties, it is necessary to look at the overall environment prevailing in the retail home loan market.

Background

Retail home loan market in India

1.1 Housing market in India took off mainly since the year 2001, as evidenced by the growth in bank exposure to the sector. The rapid growth in housing loan market has been supported by the growth in the middle class population, favourable demographic structure, rising job opportunities in the metropolitan centers, emergence of a number of second tier cities as upcoming business ce