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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Guidelines for Responsible Lending Conduct: Release of Property Documents

13-Sep-2023 | RBI/2023-24/60 DoR.MCS.REC.38/01.01.001/2023-24

Reserve Bank of India (RBI) has issued a Notification outlining responsible lending conduct in relation to the release of movable and immovable property documents upon repayment or settlement of personal loans. These guidelines are applicable to all cases where the release of original property documents is due on or after December 1, 2023.

Key Points:

1. Release of Property Documents: Lending institutions (REs) are mandated to release all original movable and immovable property documents and clear any associated charges registered with relevant registries within 30 days following the full repayment or settlement of the loan account.

2. Borrower's Option for Collection: Borrowers are granted the flexibility to collect their original property documents either from the bank branch where the loan was serviced or from any other office of the RE where the documents are available, based on their preference.

3. Compensation for Delay: In cases where there is a delay in releasing the original property documents or in filing the charge satisfaction form with the relevant registry beyond the stipulated 30-day period after full repayment or settlement of the loan, the RE is required to communicate the reasons for the delay to the borrower. If the delay is attributable to the RE, it is obligated to compensate the borrower at a rate of ?5,000 per day of delay.

For detailed guidelines and further information, please refer to the attached document.

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