Have you recently closed your home loan? Beware of potential delays in receiving your property documents. The Reserve Bank of India (RBI) has established clear guidelines to protect borrowers from undue delays in the release of these crucial documents, and banks could face a penalty of ₹5,000 per day for failing to adhere to these rules.

According to the RBI's directives, all regulated entities (REs), including banks and financial institutions, are mandated to return all original movable and immovable property documents within 30 days after the full repayment or settlement of a loan account. This timeline also includes removing charges registered with any registry.

What Happens if Your Bank Delays?

If your bank delays releasing your property documents or filing the charge satisfaction form beyond the stipulated 30 days, they are required to communicate the reasons for the delay to you. Should the delay be attributable to the bank, they are liable to compensate you at a rate of ₹5,000 for each day of delay. An additional 30 days is granted to REs to complete this procedure, after which the delayed period penalty will be calculated.

Your Rights as a Borrower

As a borrower, you have the right to:

• Timely Release of Documents: Expect your original property documents to be returned within 30 days of loan closure.
• Clear Communication: Receive clear and prompt communication from the bank regarding any delays in the process.
• Compensation for Delay: Be compensated at ₹5,000 per day if the delay is due to the bank's fault.
• Grievance Redressal: File a complaint with the Banking Ombudsman if you believe the bank is not following fair practices.

RBI Guidelines on Loan Closure

The RBI's guidelines emphasize transparency and fairness in the loan closure process. Key points to remember include:

• No Foreclosure Charges on Floating Rate Loans: The RBI has prohibited foreclosure charges on floating-rate home loans.
• Fair Practices Code: Banks must adhere to a Fair Practices Code, ensuring borrowers receive all necessary information in a language they understand.
• Grievance Redressal Mechanism: The RBI has established a robust grievance redressal mechanism, including the Banking Ombudsman, to address borrower complaints.

Required Documents After Loan Closure

After closing your home loan, ensure you collect the following essential documents from your lender:

• No Objection Certificate (NOC) / No Due Certificate (NDC): This certificate confirms that you have paid off your loan in full and there are no outstanding dues.
• Loan Closure Statement: This statement records all transactions related to your loan, including the final payment.
• Original Property Documents: These documents prove your ownership of the property.

What to Do If Documents are Lost or Damaged

In cases of loss or damage to your original property documents, the REs are required to assist you in obtaining duplicate or certified copies of the documents and bear the associated costs.

By being aware of your rights and the RBI's guidelines, you can ensure a smooth and transparent home loan closure process. Don't hesitate to contact your bank or the Banking Ombudsman if you encounter any issues or delays.