Reserve Bank of India (RBI) has issued a directive to all financial institutions, instructing them to return all original documents related to movable or immovable property to their customers within 30 days of home loan repayment or settlement. Failure to comply will require financial institutions to provide daily compensation to their customers.
Late Returns Incur a Daily Penalty of ₹5,000
Indeed, RBI has explicitly stated that in cases of delay, financial institutions will compensate borrowers with ₹5,000 per day. These directives will be effective from December 1, 2023.
Mandatory Release of All Documents Within 30 Days
In this regard, the Reserve Bank of India has mandated all banks and financial institutions to release all movable and immovable property documents within 30 days of complete repayment and closure of individual loan accounts.
Guidelines for Addressing Customer Concerns
The RBI has found that financial institutions follow various procedures in issuing these movable and immovable property documents. These guidelines have been issued by the bank to address the problems faced by borrowers.
Compensation provided under these guidelines will not adversely affect the rights of borrowers to receive any other compensation under any applicable law.
In cases of loss or damage to property documents, financial institutions will assist borrowers in obtaining duplicate/certified copies.
Financial institutions will have an additional 30 days to complete this process, and the calculation of penalties for delays will occur after that, meaning a total period of 60 days will be considered.
Furthermore, the compensation provided under these guidelines will not adversely affect the rights of borrowers to receive any other compensation under any applicable law.