Lenders must return all original property documents and remove registered charges within 30 days of loan closure, or pay the borrower ₹5,000 for every day of delay. (RBI/2023-24/60, dated September 13, 2023.) It applies to all commercial banks (incl. sfbs, rrbs; excl. payments banks) and local area banks. Effective: All cases where document release falls due on or after December 1, 2023.
This is the circular every LAP and home-loan operations team must get right, because the penalty is real money paid to the customer. RBI found lenders following divergent, often slow practices in handing back title deeds after a loan was repaid — a frequent source of grievances. It has now fixed a hard standard.
Within 30 days of full repayment or settlement, the lender must release all original movable and immovable property documents and remove any charge registered with a registry (CERSAI, sub-registrar, RoC as applicable). The borrower chooses where to collect — the servicing branch or any other office where the documents are held. The sanction letter itself, for loans issued on or after the effective date, must state the timeline and place of return up front.
The sharpest provision is compensation. If the lender delays beyond 30 days, or fails to file the charge-satisfaction form, and the delay is the lender's fault, it must pay the borrower ₹5,000 for each day of delay. If original documents are lost or damaged, the lender must help the borrower get certified duplicates and bear the cost — with an extra 30 days allowed (total 60) before the per-day penalty starts.
There is also a continuity rule: lenders must have a documented procedure to return documents to legal heirs if the sole or joint borrowers die, published on the website. The compensation here does not bar any other compensation the borrower may claim under law. It applies to banks, co-operative banks, NBFCs, HFCs and ARCs alike. For a LAP book, the practical work is the 30-day clock, charge-satisfaction filing discipline, and a tracked release process — because every slipped day is ₹5,000 out the door.
Yes — directly. LAP is secured by property, so the 30-day release rule and ₹5,000/day penalty apply to every closed LAP account from 1 December 2023.
After 30 days from full repayment/settlement, if the delay is attributable to the lender. For lost documents, after a total of 60 days.
The borrower. They can collect from the servicing branch or any other office of the lender where the documents are held.
The lender must have a published procedure to return original documents to the legal heirs, shown on its website alongside similar policies.
No. The ₹5,000/day compensation is without prejudice to any other compensation the borrower can claim under applicable law.