The new directions provide that no pre-payment charges can be levied on floating rate loans granted to individuals for non-business purposes. For floating rate loans given to individuals and MSEs for business purposes, most commercial banks, certain urban co-operative banks, NBFCs, and All India Financial Institutions are prohibited from levying such charges. Smaller financial institutions like Small Finance Banks and Regional Rural Banks are exempt from levying pre-payment charges on business loans up to ₹50 lakh. For other loan types, pre-payment charges must align with the regulated entity’s approved policy and be clearly disclosed in loan documents.