Public sector lender Central Bank of India has announced the waiver of prepayment penalty on its floating rate home loan schemes.

"In deference to Reserve Bank of India's suggestions, the bank has decided to waive penalty on pre payment of all floating rate housing loans irrespective of the source of funds of the borrowers," said the bank.

CMD of the bank, Mr M V Tanksale said that the waiver of this penalty would apply both to new as well as existing borrowers of the bank.

Major lenders like State Bank of India and ICICI Bank have already waived off prepayment penalty on this cadre of home loans.

National Housing Bank (NHB), the umbrella body governing all housing finance companies (HFCs) has directed them to waive off prepayment penalty from their floating rate home loan offerings.