I have availed HL of Rs.23 lakhs from LICHFL in January. ROI was @ 8.25% p.a. fixed for 5 years. Now, I have received an email from the Area Manager, Thane that my ROI is reset at 10% Floating from January. Since I was getting a better ROI from another Bank, I decided to switch over my HL account from LICHFL to that Bank. I asked for foreclosure letter from LICHFL. There they have indicated prepayment charges @ 2% on the outstanding liability which works out to Rs.44000. Plus they have added service tax on this amount @ 10.30%. My contention is that since switchover is because of the fact that the higher ROI stipulated on reset is not acceptable to me therefore I should not be charged any prepayment charges.
Please guide me on my stand.
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