RBI to Banks: Rs 5,000 Per Day Fine for Delay in Release of Property Papers

Through its recent directive, the Reserve Bank of India (RBI) has asked Regulated Entities (REs) to release all the original movable and immovable property documents and remove charges registered with any registry after full repayment or settlement of the loan account.

A bank or lending firm will be required to release all the original property documents and remove charges registered with a registry within a span of 30 days of making the full repayment or settlement of a particular loan account. This would come into effect from December 1, 2023 onwards.

However, in case the return of the original property documents is delayed more than 30 days of the full repayment or settlement of a loan, the lender is mandated to inform the borrower of reasons related to the delay. In a scenario where the delay is attributable to the lender, it shall pay the borrower at the rate of Rs 5,000 for each day of delay.

Also, when the original property documents are lost or damaged (part or full), the lenders will be required to help borrowers procure duplicate copies and pay for the associated costs. This is apart from the compensation of Rs 5,000 for each day of delay.

However, an additional time of 30 days will be provided to complete this procedure, and the delayed period penalty will be calculated thereafter – after 60 days in such a scenario.

The move aims to end the arbitrary procedures that various banks or lending firms are stated to adopt when it comes to returning property documents against loans.

The apex bank’s directive will apply to REs, comprising commercial banks, including small finance and regional rural banks, primary (urban) cooperative banks, state cooperative banks and district central cooperative banks, NBFCs, and asset reconstruction companies.

The types of loans that the central bank will cover include consumer durable loans, education loans, secured loans for immovable assets, such as home loans, vehicle loans, secured personal loans, etc.

You May Also Like

Save Your Tax By Claiming Medical Expenditure Under Section 80D

The current financial year is near to end on 31st March. You…

Senior Citizens: PMVVY or SCSS investment scheme, which one is best?

Due to a fall in the interest rates offered on fixed deposits…

Know All About Moonlighting in India

The term ‘Moonlighting’ has become popular nowadays. Companies are framing strict policies…