Home › Circulars › RBI/2009-10/191

UCBs Must Disclose Property Mortgage in Housing Project Ads

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2009-10/191 · issued FY 2009-10 · ~2 min read

Quick answerRBI mandates urban cooperative banks to include a clause in housing finance terms requiring builders to disclose the mortgagee bank's name in all brochures, ads, and pamphlets, and to provide NOC for sale of mortgaged property.

What changed

Following a Bombay High Court observation, RBI now requires urban cooperative banks to insert a specific clause in housing loan terms. This clause mandates builders to disclose the bank's mortgage in all promotional materials and advertisements, and to indicate they will provide a No Objection Certificate for property sales.

What it means for you

Banks must now enforce transparency in housing project financing by ensuring borrowers disclose mortgage details to property buyers. This reduces legal risks and protects banks' security interests. Non-compliance means funds cannot be released until the builder fulfills these disclosure requirements.

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 your housing loan sanction terms to include the mandatory disclosure clause as specified.
Verify that builders/developers disclose the mortgagee bank's name in all brochures, pamphlets, and advertisements before releasing funds.
Ensure builders commit to providing a No Objection Certificate (NOC) for sale of flats/property when required.
Do not disburse any loan tranche until the builder has complied with all disclosure requirements.

Who it affects

Primary (Urban) Cooperative Banks, Builders and developers of housing projects, Home buyers and property investors

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 08:31 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 03 Aug 2026, 04:00 IST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 information must builders disclose in their advertisements?

Builders must disclose the name(s) of the bank(s) to which the property is mortgaged in all pamphlets, brochures, and advertisements, including in newspapers and magazines.

When can a bank release funds for a housing project under this circular?

Funds can only be released after the builder/developer has fulfilled the disclosure requirements, including mentioning the mortgage and commitment to provide NOC.

Does this circular apply to all types of housing finance from urban cooperative banks?

Yes, it applies to all eligible housing schemes financed by urban cooperative banks, as referenced in the Master Circular on Housing Finance dated July 1, 2009.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #1804: UBD.BPD.No.16/09.22.010/2009-10 — "Finance for Housing Projects - Incorporating Clause in the terms and conditions to Disclose in Pamphlets / Brochures / Adve”

📜 Read the original circular — full text as issued by RBI

RBI/2009-10/191
 UBD.BPD.No.16 / 09.22.010/2009-10
 October 26 , 2009
 Chief Executive Officer
 Primary (Urban) Cooperative Banks
 Dear Sir / Madam, 
 Finance for Housing Projects – incorporating clause in the terms and conditions to disclose in pamphlets / brochures / advertisements – information regarding mortgage of property to the bank 
 Please refer to para 9 and Annex 1 of our circular UBD.PCB.MC.No. 2 / 09.22.010 / 2009-10 dated July 1, 2009 (Master circular on Housing Finance) regarding precautions to be taken by banks while extending finance for housing schemes.

 2.    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.

 3.  Keeping in view the above observations, while granting finance for eligible housing schemes, Urban Cooperative Banks are advised to stipulate as part of terms and conditions that:
 The builder / developer / company,  disclosed / would disclose in the pamphlets / brochures etc., the name(s) of the bank(s) to which the property is mortgaged

 The builder / developer / company would append the information relating to mortgage while publishing advertisement of a particular scheme in newspapers / magazines etc

 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. 4.  Banks 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.
 Yours faithfully
 (A.K. Khound)
 Chief General Manager-in-Charge

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/191 · issued FY 2009-10. The plain-English explanation above is BankPulse’s own independent summary.

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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=5327&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.