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RBI directs banks to release property documents within 30 days of loan repayment

Posted Date : 14-Sep-2023 , 08:06:48 am | Posted By CASANSAAR print Print
The Reserve Bank of India (RBI) has directed banks and other financial institutions to release all the movable and immovable property documents within 30 days of the full repayment of loans. Besides that, it has also stated that lenders will need to compensate borrowers in case of any delay in releasing the original property documents.

The lenders will be liable to pay Rs 5,000 per day to the borrower for delay in releasing the property documents beyond the stipulated period.

In its latest circular released on Wednesday, September 13, the central bank also observed that financial institutions follow divergent practices in releasing property documents, which has caused a lot of problems for the borrowers.

While the announcement has been made in connection with all the existing and new personal loans, it will include anything that involves collateral, like home loans, car loans, or gold loans.

"In terms of the guidelines on Fair Practices Code issued to various Regulated Entities (REs) since 2003, REs are required to release all movable and immovable property documents upon receiving full repayment and closure of loan accounts. However, it has been observed that the REs follow divergent practices in the release of such movable and immovable property documents, leading to customer grievances and disputes," the circular read.

The directions will be applicable from December 1, 2023. Let's know how the RBI move will benefit borrowers. (www.casansaar.com)

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