RBI Directs Regulated Entities to Release Property Documents Promptly

September 15, 2023

The Reserve Bank of India (RBI) has issued directives to all Regulated Entities (REs), including banks and non-banking financial companies (NBFCs), to release original movable or immovable property documents within 30 days of full loan repayment. Lenders must also remove any charges registered with registries within the same timeframe.

What prompted the RBI to issue these directives to Regulated Entities (REs)?

The RBI acted due to observed divergent practices among REs in releasing property documents, leading to customer grievances and disputes. The directives aim to standardize and improve this process.

What types of loans are affected by these directives?

These directives apply to personal loans, including consumer credit, education loans, loans for immovable assets (e.g., housing), and loans for investment in financial assets like shares and debentures.

How does the RBI plan to address delays in releasing property documents?

In cases of delay, attributable to the RE, the lender must compensate the borrower at a rate of Rs 5,000 per day for each day of delay and communicate the reasons for the delay.