Skip to main content

Release of Documents on Closure of Personal Loans

Reserve Bank of India (RBI) has issued directions for release of movable / immovable property documents on repayment / settlement of personal loans.

What is personal loan?

Personal loan refers to a loan given to individual and consists of –

  • Consumer credit
  • Education loan
  • Loan given for creation / enhancement of immovable assets (e.g., housing, etc.)
  • Loan given for investment in financial assets (shares, debentures, etc.)

What are the direction on release of movable / immovable property documents?

  • The Regulated Entities (REs) shall release all the original movable / immovable property documents and remove charges registered with any registry within 30 days after full repayment / settlement of the loan account.
  • 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 her / his preference.
  • The timeline and place of return of original movable / immovable property documents shall be mentioned in the loan sanction letters issued on or after December 01, 2023.
  • The REs shall have a well laid out procedure for return of original movable / immovable property documents to the legal heirs in the event of demise of the sole borrower or joint borrowers. 

What if documents are not retuned within specified timelines?

  • In case of delay in releasing of original movable / immovable property documents or failing to file charge satisfaction form with relevant registry beyond 30 days after full repayment / settlement of loan, the RE shall communicate to the borrower reasons for such delay. 
  • In case the delay is attributable to the RE, it shall compensate the borrower at the rate of ₹5,000/- for each day of delay.

What if original documents are lost / damaged? 

  • In case of loss / damage to original movable / immovable property documents, the REs shall assist the borrower in obtaining duplicate / certified copies of the movable / immovable property documents and shall bear the associated costs.
  • In such cases, an additional time of 30 days will be available to the REs to complete this procedure (i.e. total period of 60 days).
  • The RE shall also compensate the borrower at the rate of ₹5,000/- for each day of delay.

From when are the directions applicable?

The directions shall be applicable to all cases where release of original movable / immovable property documents falls due on or after December 01, 2023.


References

Reserve Bank of India. (2018, January 04). 'XBRL Returns - Harmonization of Banking Statistics'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11199&Mode=0

Reserve Bank of India. (2023, September 13). 'Responsible Lending Conduct – Release of Movable / Immovable Property Documents on Repayment/ Settlement of Personal Loans'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12535&Mode=0


Follow at - Telegram   Instagram   LinkedIn   Twitter   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Trade Receivables Discounting System (TReDS)

Reserve Bank of India (RBI) has issued the directions on Trade Receivables Discounting System (TReDS). What is TReDS? TReDS is a technology platform on a digital or electronic network for facilitating factoring of trade receivables through multiple financiers. What is a Factoring Unit? Factoring unit refers to trade receivable in the form of invoice / bill uploaded either by the seller (in the case of factoring) or by the buyer (in case of reverse factoring), as the case may be. Who are the participants in TReDS? Seller – Micro, Small and Medium Enterprise (MSME) Buyer – any person liable to the seller, whether under a contract or otherwise, against an invoice or bill of exchange, to pay any trade receivable Financier – all entities / institutions permitted to undertake factoring business under the Factoring Regulation Act, 2011 Insurance companies  Credit Guarantee Fund Trust notified by the Government of India Who can operate TReDS platforms? An entity shall seek authorisation fr...
Post a Comment
Read more

Payment of Agency Commission to Agency Banks (ABs) and Disbursement of Government Pension by ABs

Reserve Bank of India (RBI) has issued guidelines on the conduct of Government business by Agency Banks (ABs), payment of agency commission to ABs and disbursement of Government pension by ABs. Who are ABs? ABs mean all Public Sector Banks (PSBs), scheduled Private Sector Banks (PVBs), scheduled Payments Banks (PBs), and scheduled Small Finance Banks (SFBs) appointed by the RBI under Section 45 of the RBI Act, 1934, by mutual agreement, to carry out Government banking business of the Central Government (CG) / State Governments (SGs). What is agency commission? Agency commission means the remuneration paid by the RBI to an AB in consideration of it acting as an agent of the RBI in the conduct of general banking business of the CG and the SGs at the places and in the manner specified in the agreement between the RBI and the bank, with the exception of the functions relating to the management of the public debt. What are the guidelines on appointment of ABs? Any eligible bank which intend...
Post a Comment
Read more

Swap Facility for FCNR (B) Deposits, ECBs and OFCBs (updated as on June 23, 2026)

Reserve Bank of India (RBI) has introduced US Dollar-Rupee swap facility for Foreign Currency Non-Resident (Bank) [FCNR (B)] deposits, External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs). Swap facility for FCNR (B) deposits Swap facility for ECBs and OFCBs The swap facility has been introduced for fresh FCNR (B) deposits, including deposits that are renewed upon maturity, for a minimum tenor of 3 years and a maximum tenor of 5 years. The swap facility has been introduced for – ECBs of average maturity of 3 years and above, drawn on after June 8, 2026 till December 31, 2026 by – (a) Public Sector Undertakings (PSUs) whose majority ownership is held by the central and / or state government (other than banks), or (b) PSUs which are incorporated, established or registered under a Central or State Act and controlled by the central / state government. The facility will also be available for the undrawn portion of any exist...
Post a Comment
Read more

Kisan Credit Card (KCC) Scheme

Reserve Bank of India (RBI) has issued directions on Kisan Credit Card (KCC) Scheme. To whom are the directions applicable? The directions are applicable to the following entities – Commercial Banks (excluding overseas branches of Indian banks) Small Finance Banks (SFBs) Regional Rural Banks (RRBs) Rural Co-operative Banks – State Co-operative Banks (StCBs) Central Co-operative Banks (CCBs) To which loans shall the directions be applicable? The directions shall be applicable to loans sanctioned under the KCC Scheme with effect from January 01, 2027.  What are the crop seasons? Crop season means the period up to harvesting and marketing of the crops raised. Short duration crops shall mean crops with anticipated period from sowing to marketing up to 12 months. Long duration crops mean crops which are not short duration crops. The crop season for long duration crops i.e., anticipated period from sowing to marketing is more than 12 months and up to 18 months. For the purpose of the KCC...
Post a Comment
Read more

Lead Bank Scheme (LBS)

Reserve Bank of India (RBI) has issued guidelines on the Lead Bank Scheme (LBS). Who is a Lead Bank? RBI designates a commercial bank as Lead Bank in each district, to coordinate the efforts of the banks, Government, National Bank for Agriculture and Rural Development (NABARD) and other stakeholders at the district level to improve credit flow to the priority sectors and promote financial inclusion in the district. 12 public sector banks and 2 private sector banks (Jammu & Kashmir Bank and ICICI Bank) have been assigned lead bank responsibilities, covering 778 districts across the country. What appointments are made under the LBS? Every lead bank shall appoint a Lead District Manager (LDM) in each district where it has the lead bank responsibility, to exclusively oversee and coordinate the implementation of the LBS in the district. NABARD shall appoint a District Development Manager (DDM) for each district to act as a liaison between NABARD and the district-level banking and financ...
Post a Comment
Read more