News Karnataka
Friday, February 23 2024
Business News

RBI: Banks that lose borrowers’ property docs to pay penalties

India's forex reserves rise by $2.6 billion
Photo Credit : IANS

New Delhi: Banks may have to compensate borrowers and also pay a penalty if they lose the original property documents of loan seekers.

This could soon become a possibility if the RBI accepts the recommendations of a high-level committee, which it had formed in May last year to review customer service standards in banks and other lending institutions.

The panel led by former deputy RBI governor B P Kanungo, presented its report to the central bank in April this year, and this suggestion is a part of a slew of recommendations made in it.

The RBI has invited comments from stakeholders by July 7 on the committee’s recommendations.

The panel has suggested that the RBI may consider stipulating a time limit for banks to return the property documents to the borrower from the date of closure of the loan account, failing which a penalty or compensation linked to the extent of delay should automatically be paid by the banks to the borrower.

“In case of loss of property documents, the bank should not only be obligated to assist in obtaining certified registered copies of documents at their cost but also compensate the customer adequately, keeping in view the time taken to arrange the alternate copies of the documents,” the panel has suggested.

Normally banks request original property documents and keep them until the loans are fully repaid.

However, these recommendations have come as the RBI has received several complaints that banks take a lot of time to return property documents even when the loan has been repaid on time.

Original property documents are essential, as they help in establishing ownership and preventing disputes.

In addition to this, these documents are also useful in facilitating future transactions and in other property-related matters.

Ownership documents like title deeds, serve as legal validation of one’s property ownership.

Holding these documents in their original form also reduces the risk of potential disputes or fraud in the future.

Read more:

RBI issues draft directions on digital payment security controls

RBI Surplus transfer and Rs 2000 note withdrawal boost liquidity

RBI emphasizes structural reforms for India’s growth

RBI authorizes KBL to collect taxes payable to CBDT/CBIC

FM addresses central board of RBI, reviews economic situation

 

Share this:
MANY DROPS MAKE AN OCEAN
Support NewsKarnataka's quality independent journalism with a small contribution.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Find the best odds at 10Cric and IPL Betting 2023! Signup today and get up to a 100% deposit bonus.

To get the latest news on WhatsApp