The Reserve Bank of India (RBI) in a circular issued on 13 September 2023 has directed the banks and other regulated entities (RE) to return all original movable and immovable property documents within 30 days after the full repayment of a loan by the borrower.
RBI also said that if the banks and the regulated entities do not comply with the direction then they will have to pay a fine of Rs 5000/day for each day of delay.
According to the RBI , the borrower shall be given the option of collecting the original movable/ immovable property documents either from the banking outlet/branch where the loan account was serviced or any other office of the RE where the documents are available, as per her/his preference.
These directions of the RBI will be applicable to all cases where release of original movable/ immovable property documents falls due on or after December 1, 2023.
There are generally two types of properties Tangible and Intangible. Tangible property means which has physical existence . They are further classified as movable and Immovable properties.
Movable properties are those properties which can be moved from one place to another . It includes timber, gold, crops, jewelry, furniture, shares ,bonds etc .
Immovable properties are those properties which cannot be easily removed from one place to another. It includes lands or things which are permanently attached to lands like houses, factories ,real estate etc.
Intangible properties are those properties which have no physical existence . They include patents, copyrights,trademarks, service marks etc.
Under the Banking Regulation Act 1949,RBI has the power to regulate banks in India.
Here other regulated entities means Non Banking Finance Company (NBFC). Under the Reserve Bank of India Act 1934 , RBI regulates the NBFC which are in the business of providing loans.
Governor of RBI : Shaktikanta Das