The Reserve Bank of India (RBI) has issued a directive aimed at ensuring that banks and lending firms promptly release property documents to borrowers after they have repaid their loans in full. Here are some key points regarding these measures:
1. **Types of Loans Covered:** The RBI's directive covers various types of loans, including consumer durable loans, education loans, secured loans for immovable assets (such as home loans and vehicle loans), and secured personal loans.
2. **Timeline for Document Release:** Lenders are required to release all original property documents and remove charges registered with any registry within 30 days of the full repayment or settlement of the loan account. This means that once you have repaid your loan in full, the lender must return your property documents within this specified timeframe.
3. **Effective Date:** These measures are effective for all cases where the return of property documents falls due on or after December 1, 2023.
4. **Collection of Property Documents:** Borrowers can collect the original property documents either from the bank branch that serviced the loan account or from any other office of the lender where the documents are available, as per their preference. The bank will specify the timeline and place for document return in the loan sanction letters issued on or after the effective date of these measures.
5. **Procedure for Legal Heirs:** In the event of the demise of the sole borrower or joint borrowers, lenders have a laid-out procedure for returning property documents to the legal heirs. This procedure will be made available on the bank's website for customer information.
6. **Compensation for Delay:** If the lender fails to release the original property documents within 30 days of full loan repayment and the delay is attributable to the lender, they must compensate the borrower at the rate of Rs 5,000 for each day of delay. This penalty structure is in place to hold lenders accountable for any unjustified delays.
7. **Lost or Damaged Documents:** If the original property documents are lost or damaged (either in part or in full), the lender is responsible for helping borrowers obtain duplicate copies and bearing the associated costs. In addition to this, if there is a delay in providing duplicate copies, the lender must compensate the borrower at the rate of Rs 5,000 for each day of delay. In such cases, an additional 30 days are allowed to complete the procedure before calculating the delayed period penalty.
These measures are aimed at protecting the interests of genuine borrowers and ensuring that they are not subjected to unnecessary delays or harassment in obtaining their property documents after repaying their loans. Borrowers are encouraged to be aware of these guidelines and their rights in order to hold lenders accountable for any delays or issues in document release.