MUMBAI: The Reserve Bank of India on Wednesday asked banks and other regulated entities to release all original movable and immovable properties ownership documents and remove fees charged to personal loan borrowers within a period of 30 days of full repayment or settlement of loans.
This comes after the central bank noted that the regulated entities are following “divergent practices”, leading to customer complaints and disputes.
To address the issues facing borrowers and promote responsible lending behavior, RBI issued a series of directions today.
Under it, the borrower will be given the opportunity to collect the original documents on movable or immovable property either from the bank office or branch where the loan account was managed, or from any other office of the entity where the documents are available, according to the provisions of the law. preference of the borrower.
In the event of the death of the sole borrower or joint borrowers, entities must have a clear procedure for the return of original movable or immovable property documents to the legal heirs.
“Such procedure will be displayed on the website of the REs along with other similar policies and procedures for customer information,” RBI said.
The RBI also proposed as part of its directions to provide compensation for delay in releasing such documents.
In cases where the delay is due to the regulated entity, RBI said it will compensate the borrower with Rs 5,000 for each day of delay.
“In case of loss/damage to original movable/immovable property documents, in whole or in part, the REs shall assist the borrower in obtaining duplicate/certified copies of the movable/immovable property documents and shall bear the associated costs, in addition to to pay damages…’ RBI said.
However, in such cases, an additional 30 days will be available for the REs to complete this procedure, and the penalty for the deferred period will be calculated thereafter – after a total period of 60 days.
This comes after the central bank noted that the regulated entities are following “divergent practices”, leading to customer complaints and disputes.
To address the issues facing borrowers and promote responsible lending behavior, RBI issued a series of directions today.
Under it, the borrower will be given the opportunity to collect the original documents on movable or immovable property either from the bank office or branch where the loan account was managed, or from any other office of the entity where the documents are available, according to the provisions of the law. preference of the borrower.
In the event of the death of the sole borrower or joint borrowers, entities must have a clear procedure for the return of original movable or immovable property documents to the legal heirs.
“Such procedure will be displayed on the website of the REs along with other similar policies and procedures for customer information,” RBI said.
The RBI also proposed as part of its directions to provide compensation for delay in releasing such documents.
In cases where the delay is due to the regulated entity, RBI said it will compensate the borrower with Rs 5,000 for each day of delay.
“In case of loss/damage to original movable/immovable property documents, in whole or in part, the REs shall assist the borrower in obtaining duplicate/certified copies of the movable/immovable property documents and shall bear the associated costs, in addition to to pay damages…’ RBI said.
However, in such cases, an additional 30 days will be available for the REs to complete this procedure, and the penalty for the deferred period will be calculated thereafter – after a total period of 60 days.
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