RRBs Must Mandate Mortgage Disclosure in Housing Project Ads
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2009-10/155 · issued 14 Sep 2009 · ~2 min read
Quick answerRRBs must now include a clause in housing loan terms requiring builders to disclose mortgage details in brochures and ads, including the bank's name and NOC availability, before fund release.
What changed
RBI has directed RRBs to add a specific clause in loan terms for housing projects, mandating builders to disclose mortgage information in promotional materials. This follows a Bombay High Court observation on transparency. Funds cannot be released until the builder complies with these disclosure requirements.
What it means for you
RRBs must enforce stricter transparency in housing finance, reducing buyer risk from undisclosed mortgages. This adds compliance steps for lenders, requiring verification of builder disclosures before disbursement. It may slow loan processing but protects banks from legal disputes and enhances borrower trust.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Update loan sanction terms for housing projects to include mandatory mortgage disclosure clauses.
Verify that builders disclose the mortgagee bank's name in all brochures, pamphlets, and advertisements.
Ensure builders provide NOC or permission from the mortgagee bank for property sales, as required.
Do not release funds until the builder fulfills all disclosure requirements.
Train loan officers on the new clause and compliance checks.
Who it affects
Regional Rural Banks (RRBs), Builders and developers of housing projects, Homebuyers and property purchasers
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 08:47 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What specific disclosures must builders make under this RBI directive?
Builders must disclose the name of the bank(s) to which the property is mortgaged in pamphlets, brochures, and advertisements. They must also indicate that a No Objection Certificate (NOC) from the mortgagee bank will be provided for property sales if required.
When can RRBs release funds for a housing project under this rule?
Funds should not be released until the builder or developer fully complies with the disclosure requirements, including mentioning the mortgage details and NOC availability in promotional materials.
Why did RBI issue this directive to RRBs?
The directive follows a Bombay High Court observation in a case, emphasizing that banks should ensure disclosure of property charges or liabilities to protect homebuyers from hidden mortgages.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1817: RPCD.CO.RRB.BC.No.21/03.05.33/2009-10 — "Finance for Housing Projects - Incorporating Clause in the Terms and Conditions to disclose in Pamphlets / Brochures ”
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/155
RPCD.CO.RRB.BC.No. 21 /03.05.33/2009-10
September 14, 2009
Chairman
All Regional Rural Banks
Dear Sir,
Finance for Housing Projects – Incorporating clause in the terms and conditions to disclose in Pamphlets/Brochures/advertisements information regarding mortgage of property to Regional Rural Banks (RRBs)
We advise that in a case which came up before the Hon’ble High Court of Judicature at Bombay, the Hon’ble Court observed that the bank granting finance to housing / development projects should insist on disclosure of the charge / or any other liability on the plot, in the brochure, pamphlets etc., which may be published by developer / owner inviting public at large to purchase flats and properties. The Court also added that this obviously would be part of the terms and conditions on which the loan may be sanctioned by the bank.
2. Keeping in view the above, while granting finance to specific housing / development projects, RRBs are advised to stipulate as a part of the terms and conditions that:
(i) the builder / developer / company would disclose in the Pamphlets / Brochures etc., the name(s) of the bank(s) to which the property is mortgaged.
(ii) the builder / developer / company would append the information relating to mortgage while publishing advertisement of a particular scheme in newspapers / magazines etc.
(iii) the builder / developer / company would indicate in their pamphlets / brochures, that they would provide No Objection Certificate (NOC) / permission of the mortgagee bank for sale of flats / property, if required.
3. RRBs are also advised to ensure compliance of the above terms and conditions and funds should not be released unless the builder/developer/company fulfils the above requirements.
4. Please acknowledge receipt to our Regional Office concerned
Yours faithfully,
(C.K.Shah)
Deputy General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/155 · issued 14 Sep 2009. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5269&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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