“In case of delay in releasing of original movable / immovable property documents or failing to file charge satisfaction form with relevant registry beyond 30 days after full repayment/ settlement of loan, the regulated entity (RE) shall communicate to the borrower reasons for such delay. In case where the delay is attributable to the RE, it shall compensate the borrower at the rate of Rs 5,000 for each day of delay,” RBI said. The new directions are effective from December 1.
Further in case of loss or damage to the original property documents, either in part or in full, the REs shall assist the borrower in obtaining duplicate/certified copies of the movable / immovable property documents and shall bear the associated costs, in addition to paying compensation for the delay, the RBI said. “However, in such cases, an additional time of 30 days will be available to the REs to complete this procedure and the delayed period penalty will be calculated thereafter (i.e., after a total period of 60 days),” RBI said.
Borrowers will have to be given the option of collecting the original property documents either from the banking branch where the loan account was serviced or any other office of the RE where the documents are available, as per their preference.
Banks and NBFCs will also have to mention the timeline and place of return of original documents in the loan sanction letters issued. RE’s will also put out a laid out procedure for return of original documents to the legal heirs in case of the demise of the sole borrower or joint borrowers.