Return property papers within 30 days of loan repayment: RBI
New Delhi, September 13
The Reserve Bank of India, in a slew of instructions to banks and financial bodies on closure of loan accounts, has asked them to release all the original property documents and remove charges registered with any registry within 30 days after full repayment of the loan amount.
Fresh guidelines to banks
- If the banks fail to release the original property documents within 30 days after full repayment of loan, they will have to compensate the borrowers at the rate of Rs 5,000 for each day of delay
- The lender will also have to communicate to the borrower the reasons for the delay
Failing to comply with the direction, Regulated Entities (REs) would compensate the borrower at the rate of Rs 5,000 for each day of delay, RBI said in a notification. The lender will also have to communicate to the borrower the reasons for the delay. However, in such cases, an additional time of 30 days will be available to the REs to complete this procedure and the delayed period penalty will be calculated thereafter (i.e., after a total period of 60 days).
The RBI has also asked the REs to give borrower the option of collecting the original property documents either from the branch where the loan account was serviced or any other office of the RE where the documents are available, as per the borrowers’ preference.
