Reserve Bank orders, if banks delay in giving this document, they will have to pay damages along with it.

In the case of loans against property, the Reserve Bank has taken a major decision in favor of consumers. Now, if banks, NBFCs or housing finance companies delay in returning the property documents after disbursement of the loan, they have to pay compensation to the customers. The Reserve Bank has issued a new order in this regard on Wednesday morning.

The Reserve Bank was receiving complaints.

The Reserve Bank has sent this order to all commercial banks including small finance banks, regional rural banks, cooperative banks, NBFCs, housing finance companies and asset reconstruction companies. In fact, the Reserve Bank was receiving complaints that banks and NBFCs etc. were delaying submission of property documents, even after customers had fully paid or settled the loan. The Reserve Bank said that this delay is leading to disputes and litigation.

What does the Fair Practice Code say?

The central bank has reminded all concerned financial institutions of responsible lending practices in the latest order. RBI’s Code of Fair Practice gives clear instructions that if the customer pays all the installments of the property loan or settles the loan, then he should get the property documents immediately.

The Reserve Bank gave so much time.

The latest order of the central bank states that all regulated institutions (commercial banks, regional rural banks, cooperative banks, NBFCs and asset reconstruction companies etc.) shall provide customers with all original documents within 30 days of receipt or settlement. Provide inside. Loan installments have to be repaid. Customers will be given the option to collect either from the branch concerned or from the branch or office where the document is currently kept as per their convenience.

Banks will have to do this.

All banks are also directed to mention the date and place of return of all documents in the loan sanction letter. In case the borrower dies, in such a case the banks have to lay down a clear procedure for returning all the documents to the legal heirs and also display the information regarding this process on their website.

5 thousand rupees daily compensation

If the bank or other concerned institutions are unable to return the documents within the stipulated time i.e. within 30 days of the payment of the loan, then they have to pay compensation to the customers. Banks and institutions must first inform customers about the delay. If there is a delay due to them, customers will have to pay a compensation of Rs 5000 for each day of delay. In case of any loss of the document, it shall be the responsibility of the banks and concerned institutions to assist the customer in reissuing the document.

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