In an important step, the Reserve Bank of India (RBI) has directed banks to release all movable/immovable property documents within 30 days of receiving full repayment of loan and closure of a loan account.

The Reserve Bank of India (File Photo)

If banks fail to return the papers within this period, and are responsible for the delay, they must compensate the borrower by paying 5000 for each day of delay, the central bank said in a notification on Wednesday.

Why the action?

The RBI said it had come to its notice that some REs (regulated entities) were following ‘divergent’ practices in releasing property documents. This, in turn, leads to customer grievances and disputes, it added.

Compensation for delay

The RBI noted that the borrower must be given the option to collect the original papers either from the branch where the loan account was serviced, or any other office of the RE where the papers were kept. It also held that the REs shall assist the borrower in obtaining duplicate copies of the originals, in case of loss or damage (partial/full), and also bear the assisted costs (in addition to the 5000 per day fine in case of delay).

In such cases, however, the REs will get 60 days to complete this procedure, the notification stated. The delayed period fine will come into effect after these 60 days.


These guidelines are for all such documents that are due to be released on or after December 1. These must be followed by:

(1.) Commercial Banks (including Small Finance Banks and Regional Rural Banks; excluding Payments Banks)

(2.) Local Area Banks

(3.) Primary (Urban) Co-operative Banks.

(4.) State Co-operative Banks, District Central Co-operative Banks

(5.) Non-Banking Financial Companies (excluding Housing Finance Companies)

(6.) Asset Reconstruction Companies.

Written By Radhika Madan

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