This order of the Central Bank will provide great relief to the customers taking home loans. After repaying their loan amount, they will not have to visit the bank to get the property papers.
The Reserve Bank of India (RBI) has given orders regarding the property documents lying in the bank of home loan customers. The apex bank has said that the bank or NBFC will have to return the property documents to the customer within 30 days of repaying the entire home loan amount.
If the bank does not return the property documents of the customer who has paid the full amount of the home loan within three days, then a penalty can be imposed on him. A fine of up to Rs 5,000 per day can be imposed on the bank giving the loan.
The Fair Practices Code has been reminded in the instructions issued by the Reserve Bank to Regulated Entities (REs). It states that it is necessary to release all movable and immovable property documents on receiving full repayment and closing the loan account.
These instructions have been issued by the Central Bank under Sections 21, 35A and 56 of the Banking Regulation Act, 1949, Sections 45JA and 45L of the Reserve Bank of India Act 1934 and Section 30A of the National Housing Bank Act 1987.
Let us tell you that for some time, the apex bank was receiving complaints against the banks giving home loans that even after paying the loan amount, people were not having to visit the bank to get the property papers. After this, this strict decision was taken by the Reserve Bank.