After loan repayment, deliver title documents to borrowers: RBI

NEW DELHI: All banks, non-banking financial institutions, housing financing businesses, asset reconstruction organizations, and others have been ordered by the Reserve Bank of India (RBI) to produce property documentation within 30 days after repayment.

“Upon receiving full repayment and closing of the loan account, regulated enterprises (REs) are required to release all documentation pertaining to moveable and immovable property. However, it has been noticed that REs use different procedures when releasing these documents for mobile and immovable property, which leads to complaints and conflicts from customers, according to RBI.

After the loan account has been fully repaid or settled, the REs have been instructed to release any original papers pertaining to moveable and immovable property and eliminate any charges that have been registered with any registry within a 30-day window.

The option for the borrower to pick up the original moveable or immovable property documents from the banking outlet/branch where the loan account was serviced or from any other RE office where the documents are available, depending on her or his desire, is to be provided.

The loan sanction letters issued on or after the effective date shall include information on the time frame and location for returning the original moveable and immovable property documents.

The REs must have a clear process in place for returning original movable/immovable property documents to the lawful heirs in the event of the death of the sole borrower or joint borrower. Such a procedure must be made available to customers on the REs’ website together with other similar rules and procedures.

When original moveable or immovable property documents are not released within 30 days of loan repayment or settlement or when a charge satisfaction form is not submitted to the appropriate registrar, the RE is required to explain the delay to the borrower. If the RE is to blame for the delay, it must pay the borrower Rs 5,000 each day of the delay in compensation.

In addition to compensating the borrower, the REs must help the borrower in acquiring duplicate/certified copies of the original movable/immovable property documents in the event of loss or damage to those documents, whether in whole or in part.

In these circumstances, however, the REs will have an additional 30 days to finish this procedure before the delayed period penalty is assessed (i.e., after a total of 60 days).

These guidelines are relevant in all situations where the original release of papers pertaining to real estate is required on or after December 1, 2023.