September 19, 2023
Shaik Musrath

RBI's New Guidelines: Faster Return of Property Papers or Face Fines

The Reserve Bank of India (RBI) has recently rolled out a set of guidelines aimed at ensuring the prompt return of property documents to borrowers upon full repayment of loans. This move comes as a response to various discrepancies in the practices followed by banks, which have often led to customer grievances and disputes. So, what does this mean for borrowers, and how does it impact the lending landscape

Addressing Customer Concerns

Borrowing money is a common practice, and millions of people take loans for various purposes, including buying homes, vehicles, or funding their businesses. However, one of the persistent issues borrowers face is the delay in receiving their original property documents after clearing their loans. The RBI's new guidelines aim to address this issue and bring about much-needed standardization and transparency in the process.

What are the Key Highlights of the RBI's Guidelines

Here are the key takeaways from the RBI's guidelines:

Timely Release of Documents: 

The RBI mandates that banks must release all original movable or immovable property documents and remove registered charges within 30 days after full loan repayment or settlement. This ensures that borrowers can access their documents promptly and without unnecessary delays.

Convenient Document Collection: 

Borrowers will have the flexibility to collect their original documents either from the bank's outlet or branch where the loan account was serviced or from any other bank office where the documents are available. This choice empowers borrowers to select a location that suits them best.

Clarity in Loan Sanction Letters: 

Loan sanction letters issued after the effective date will specify the timeline and location for returning the original documents, providing borrowers with clear and actionable information.

Handling Legal Heirs: 

Banks are required to have a defined procedure for returning original documents to the legal heirs in case of the sole borrower's or joint borrowers' demise. This procedure must be readily accessible on the bank's website to ensure transparency and ease of access for customers.

Compensation for Delays: 

Perhaps one of the most significant aspects of these guidelines is the provision for compensation in case of delays. If the bank is responsible for any delay in returning documents, it will compensate the borrower at a rate of Rs 5,000 for each day of delay. This acts as a powerful incentive for banks to adhere to the 30-day timeline diligently.

Handling Loss or Damage: 

In cases of loss or damage to original documents, either partially or entirely, banks are obligated to assist the borrower in obtaining duplicate or certified copies of the documents and bear the associated costs. An additional 30-day period is allowed for completing this process, with penalties for further delays.


These guidelines by the RBI signify a significant step towards fairness and transparency in dealings between banks and borrowers. They not only streamline the process of releasing property documents but also hold banks accountable for any undue delays or complications. For borrowers, this means more control over their financial documents and quicker access to their hard-earned properties. It's a win-win situation that promotes responsible lending conduct while safeguarding the interests of borrowers.


NREGA - National Rural Employment Guarantee Act 2005

No Immediate ITC Reversal for Non-filing of GSTR-3B by Suppliers

Time of Supply of Goods under GST Explained