For covered personal loans, the RBI has set a timeline for returning original property documents and removing a registered charge after full repayment or settlement. Compensation may apply if the delay is attributable to the lender.
Understand the Law and Process
The relevant directions generally require documents to be returned and action taken to satisfy the charge within thirty days. If the delay is attributable to the lender, compensation of ₹5,000 per day is provided for, but applicability, the closure date and the actual reason for the delay must be considered. If documents are lost or damaged, the question of assistance with duplicate/certified copies and the associated costs may arise; the directions also allow additional time in such cases. Therefore, do not apply the same calculation from the first day to every kind of delay. A loan repayment receipt, a no-dues certificate and the removal of a charge from the registry are separate records.
In Detail: What Could Affect the Outcome?
Obtain the documents from the bank after checking them against the list. Do not assume that all original papers have been returned merely because you received one file. Ask in writing about any missing document, the collection location and the status of the charge release. If there are joint borrowers or the borrower has died, the process for establishing entitlement and providing the claimant’s required documents may also need to be considered.
What Should You Do?
- Submit a return request with the closure date and a list of the originals previously deposited.
- If the delay exceeds thirty days, ask in writing for the reason, any pending documents and the compensation calculation.
- If the branch does not resolve the issue, use the bank’s grievance process and the applicable RBI complaint mechanism.
Which Documents Should You Keep?
Keep proof of loan closure, the list of original documents, correspondence, registry charge details and the collection receipt.
Hypothetical Example
A family received the sale deed, but the bank did not release the charge in the registry. This came to light when they applied for a new loan. In a complaint, it may be useful to record the separate dates on which the documents were received and the charge was removed.
Does This Rule Also Apply to Loans Taken from Any Private Individual?
No. The applicability to relevant RBI-regulated lenders and covered loans must be considered; loans from private lenders may raise a separate question.
Sources and Related Rules
- RBI release of property documents, 13 September 2023
- RBI — Commercial Banks: Responsible Business Conduct Directions, 2025, current consolidated source
Editorial review: 26 October 2026. This is general legal information. The outcome may vary depending on the facts of the case, applicable state law and subsequent amendments.