RBI to banks: Give property papers back within 30 days of loan closure

RBI directed banks and other lenders, including non-banking financial companies (NBFCs), housing finance companies and cooperative banks, to release all original movable or immovable property documents within 30 days of full repayment or settlement of personal loans by borrowers.

In case of delay, the lenders will have to compensate the borrowers by paying Rs 5,000 for each day of delay, the RBI said. The directions, released as part of responsible lending conduct, will be applicable to all cases where release of original property documents is due on or after December 1 this year.

Personal loans refer to loans given to individuals and include consumer credit, education loan, loans given for creation or enhancement of immovable assets (such as housing), and loans given for investment in financial assets like shares and debentures. The new directives will be applicable to all these loan categories.