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The Reserve Bank on Wednesday directed banks and financial institutions to release all original movable or immovable property documents and remove charges registered with any registry within 30 days after full repayment of a loan by the borrower.
The borrower shall be given the option of collecting the original movable/ immovable property documents either from the banking outlet/branch where the loan account was serviced or any other office of the RE where the documents are available, as per the statement
Failing to comply with the direction, Regulated Entities (REs) would compensate the borrower at the rate of Rs 5,000 for each day of delay, RBI said in a notification.
As part of Fair Practices Code and to make things uniform, RBI asked "REs to release all the original movable/immovable property documents and remove charges registered with any registry within a period of 30 days after full repayment/settlement of the loan account."
The move comes into effect on December 1, 2023, and is aimed at safeguarding the rights of borrowers and streamline the lending process.