Banks Vs. Home Loan Borrowers Vs. Return of original documents after loan is fully paid = Hardship & Inconvenience

 Salutary decision dated 13.9.2023 of RBI – Release property documents in 30 days on settlement of home loan or other loans.

Huge relief and solace to lakhs and crores of home loan and other borrowers of the Banks – It is common experience that even after repayment of entire home loan the borrowers are required to visit the bank for release of original documents.

Now under the stringent Guidelines effective from 1.12.2023 to streamline varying practices adopted by the different Banks causing inconvenience and hardship to the borrowers.

1. The Banks are required to release the original documents in 30 days
2. Failing to do so requires the Banks to pay Rs.5000 per day

iii.      The documents are made available at the loan branch or at nother office of the Bank on the preference of the borrower.

1. In future, Banks should specify the place in the sanction letter where original documents will be given.
2. To lay down clear procedure for return of original documents to the legal heirs after borrowers’ demise, to publish the same alongwith other relevant policies on the website of Banks.
3. The Banks should assist the borrower at its costs in obtaining duplicate or certified copies in case original documents are fully or partially damaged

Reserve Bank of India – Notifications (rbi.org.in)

Banks must release property documents within 30 days or pay Rs 5000 per day compensation: RBI (msn.com)