RBI to Banks: Return Property Papers to Borrowers Within 30 Days of Repayment

The Reserve Bank of India (RBI) has directed banks and other lenders to release all original movable or immovable property documents within 30 days of full repayment or settlement of loans by borrowers. The new directive, which is part of the RBI’s Responsible Lending Conduct framework, will be applicable to all cases where the release of original property documents is due on or after December 1, 2023.

The RBI’s move is a welcome step for borrowers, who have long faced delays and hassles in getting their property papers back after repaying their loans. In the past, banks and lenders have often cited various reasons for the delay, such as the need to verify the repayment or to remove their charges from the property records. However, these delays can cause significant inconvenience to borrowers, who may need to use their property papers for other purposes, such as selling the property or obtaining a new loan.

Under the new directive, banks and lenders will be required to compensate borrowers at a rate of Rs 5,000 for each day of delay in returning their property papers beyond the 30-day deadline. This is a significant penalty, which should incentivize banks and lenders to comply with the RBI’s directive.

The RBI’s directive is a positive step towards protecting the rights of borrowers and ensuring fair practices in the lending industry. Borrowers should be aware of their new rights and should take steps to ensure that their property papers are returned to them within the 30-day deadline.

## Tips for borrowers:

• Be aware of the RBI’s new directive on the return of property papers.
• Keep a copy of your loan repayment statement and all other relevant documentation.
• Contact your bank or lender immediately after repaying your loan to request the return of your property papers.
• If your bank or lender does not return your property papers within 30 days, you may be eligible for compensation.
• You can file a complaint with the RBI if you are not satisfied with the response from your bank or lender.

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