RBI has taken another big decision to stop the arbitrariness of banks. Now after repaying the loan, banks will not be able to retain the documents deposited by the customers for long. If they do so, they will also be fined heavily.
New Delhi. Most of the customers taking home loan have to face one or two problems. Banks charge huge fees for returning the property documents kept with them in lieu of loan. This arbitrariness is now going to be curbed, because the Reserve Bank has set a deadline for all banks and non-banking financial companies. RBI has said that banks and NBFCs will have to return all the documents of the customers within 30 days of loan repayment. For not doing so after December 1, 2023, banks will have to pay a fine of Rs 5,000 per day.
According to RBI, banks and NBFCs will have to return the documents of the movable and immovable property which were pledged to the customer within 30 days of repayment of the loan. Till now, what used to happen was that every bank and NBFC used to return the documents to the borrowers in their own way and time. This was causing a lot of dissatisfaction among the customers. Keeping this in mind, RBI has come up with new rules. Often the house itself is mortgaged for a home loan. At the same time, for personal loan, banks pledge insurance policies, shares or securities.
What else will change?
According to RBI instructions, if the lender does not return the documents to the borrower within 30 days, a fine of Rs 5000 per day will be imposed on the bank. This money will go directly to the borrower. Customers will have the option to collect the documents from the branch where the loan is passed or from any other branch where the documents are available. If the borrower dies, banks will ensure that the documents reach the hands of the legal heirs without any hassle.
You will get benefit like this also
The timeline and place for returning the documents should be mentioned in the loan section letter. If there is any damage to the documents, the lender will ensure that certified-duplicate documents are provided to the customer without any additional fees. However, in this case the deadline will be extended by another 30 days. This means that now banks and NBFCs will have 60 days to return the documents, after which a fine of Rs 5000 per day will start being imposed on them.
