New: Penalty of Rs. 5000/- daily for failing to return the original property deed within 30 days once the debts are repaid!
Posted on: 14/Sep/2023 11:24:47 AM
The Reserve Bank of India has issued an order to banks regarding the return of the original property sale deed to customers who have fully paid their housing loans. Failure to comply with this directive will result in a penalty of Rs. 5000 per day, payable to the affected customer.
Traditionally, banks and financial agencies have retained the original property sale deed and related documents from customers who obtained loans for property purchases. However, many of these institutions take an extended amount of time to return the original property sale deed documents and provide a `No Objection` Certificate as well as cancel the mortgage documents.
In response to this situation, the Reserve Bank of India has released a notification specifying the following:
1. All banks and financial agencies must return the original property sale deed document to customers who have fully repaid their housing loans within 30 days of the loan repayment completion. If there are any mortgages or related documents involved in the property transaction, they must also be returned after the full loan amount has been repaid and all closing procedures have been completed.
2. In the event that banks and financial agencies fail to adhere to the above condition, they will be subject to a penalty of Rs. 5000 per day for each day of delay in releasing the property sale deed document.
3. Customers should not be compelled to obtain the original property sale deed document exclusively from the branch where they initially applied for the loan. Instead, institutions must assist the customer in obtaining their original property sale deed document from their preferred branch. These details should be clearly outlined in the letter issued when releasing the housing loan.
4. In the unfortunate event of the customer`s demise, the original property sale deed and related documents must be transferred to the legal heir of the property. This information must be communicated to the customer during the housing loan application process.
5. In cases of incidents such as damage to the original property sale deed document or its loss or misplacement, banks are obligated to provide full assistance to the affected customer in obtaining a new document. This process can take up to 60 days.
Please note that the above information is a summary of the RBI`s notification, and it is essential for banks and financial institutions to adhere to these guidelines to ensure a smooth and fair process for customers.
