{"id":371688,"date":"2023-09-18T14:50:02","date_gmt":"2023-09-18T09:20:02","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=371688"},"modified":"2024-02-19T15:18:54","modified_gmt":"2024-02-19T09:48:54","slug":"rbis-new-rules-ensure-faster-release-of-property-documents-for-borrowers","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/varsity\/rbis-new-rules-ensure-faster-release-of-property-documents-for-borrowers","title":{"rendered":"RBI\u2019s new rules ensure faster release of property documents for borrowers"},"content":{"rendered":"

If you have a home loan or a loan against any property\/security, then you have a reason to smile.<\/p>\n

RBI, on September 13, 2023, came out with a notification stating that banks and NBFCs (non-banking financial company) must release all the movable or immovable property documents given as collateral within 30 days from the day the borrower fully repays or settles the loan.<\/p>\n

In this story, let\u2019s delve into what this is all about.<\/p>\n

 <\/p>\n

Disputes in the past<\/b><\/p>\n

When you take a home loan, the security is typically the property itself by way of depositing the title deeds.\u00a0For other personal loans, banks also accept life insurance policies (which have a surrender value), shares\/securities and investments like NSC (National Savings Certificate) etc. as collateral.<\/p>\n

When a loan is settled by the borrower, different banks have been following different practices of releasing such documents and there were customer grievances and disputes.\u00a0Imagine settling a loan with the bank\/NBFC but property still under mortgage.<\/p>\n

RBI wants to streamline the process of releasing documents that are due from December 1, 2023.<\/p>\n

Here\u2019s what the RBI says<\/b>\u2013<\/p>\n

    \n
  1. The documents must be released by the lender within 30 days of loan closure. No encumbrance after that.<\/li>\n<\/ol>\n
      \n
    1. Borrowers will have an option to collect those documents either from the branch office where the loan was sanctioned or any other office where the documents are available.<\/p>\n<\/li>\n
    2. \n

      The timeline and place of return of such documents has to be mentioned by the lender in the loan sanction letters.<\/p>\n<\/li>\n

    3. \n

      Lenders must have a standard procedure on how to return the documents to legal heirs, when the borrower or joint borrowers die.<\/p>\n<\/li>\n

    4. \n

      In case of delay in releasing documents, the bank\/NBFC has to pay a fee to the\u00a0 borrower \u2013 \u20b95,000 for each day of delay.<\/p>\n<\/li>\n

    5. \n

      If there is a loss\/damage to documents, the lender must assist you in getting the duplicate\/certified copies by covering the extra charges. In this case, the 30 days limit will be extended by another 30 days. If there is a delay even after 60 days, the lender will be liable to pay Rs 5,000 per day until the documents are returned to the borrower.<\/p>\n<\/li>\n<\/ol>\n

      Note that NBFCs also include housing finance companies (HFCs).\u00a0With RBI rules coming into effect from December 2023, you are expected to have a smooth experience in getting your property\/security released from mortgage.<\/p>\n","protected":false},"excerpt":{"rendered":"

      If you have a home loan or a loan against any property\/security, then you have a reason to smile. RBI, on September 13, 2023, came out with a notification stating that banks and NBFCs (non-banking financial company) must release all the movable or immovable property documents given as collateral within 30 days from the day […]<\/p>\n","protected":false},"author":242540,"featured_media":371692,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[477],"tags":[509],"class_list":["post-371688","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-varsity","tag-personal-finance"],"yoast_head":"\nRBI\u2019s new rules ensure faster release of property documents for borrowers – Z-Connect by Zerodha<\/title>\n<meta name=\"description\" content=\"If you have a home loan or a loan against any property\/security, then you have a reason to smile. 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