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Banks must return your documents within 30 days of loan repayment
September 15, 2023
The Reserve Bank of India (RBI) has asked all Regulated Entities (that is, banks and non-banking financial companies), to release the original documents of movable or immovable property within a month of the full repayment or settlement of loans by borrowers.
In case of delay, the lender will have to compensate the borrower at the rate of ₹5,000 per day of delay, the RBI said. The directives will come into effect on December 1, 2023.
The central bank on Wednesday directed all Regulated Entities (REs) that is banks, non-banking finance companies (NBFCs), housing finance companies, small finance banks (SFBs), regional rural banks (RRBs) and cooperative banks to release, as part of responsible lending conduct, the original movable or immovable property documents, and remove charges registered with any registry within a period of 30 days after full repayment or settlement of the loan account by a borrower.
The RBI said a borrower will have the option of collecting the original property documents either from the banking outlet or the branch where the loan account was serviced, or any other office of the RE where the documents are available, as per their preference.
The lender will have to mention the timeline and place of return of original property documents in the loan sanction letters issued on or after December 1, 2023.
Important Links:
- 4-IN-1 Professional Diploma in Banking, Financial Services & Insurance (PDBFSI): https://tscfm.org/courses/4-in-1-professional-diploma-in-banking-financial-services-insurance-pdbfsi/