How to Get Your Property Documents Back After Loan Repayment.

Whenever we take a secured loan from a bank, we have to deposit the original papers of our property with the bank as security. The bank takes the original papers from us so that we cannot do any transaction related to that property until the loan is completed.

The rule is that when our loan is completed, the bank should issue us a no dues letter and return our property papers which we had kept with the bank, but many times the bank takes a lot of time to issue a no dues letter and return the property papers.

Practically, there are two-three reasons for such delay. One is that the bank works very actively at the time of giving the loan, but when the loan is completed, the bank is not very interested.

Secondly, at the time of loan formalities, the process of loan of more than a limit amount is done at the regional office level and not at the branch level of the bank. And many times the property papers etc. are also kept not at the branch level of the bank but in a regional office or an office made separately for this, due to which there is a lot of delay in getting them back.

But it is not proper practice that when a loan has to be taken, the bank also charges interest and we get all the facilities at the branch level, but when we have to get our documents back, the branch office people only say that the documents will come from the regional or head office and it will take time.

Neither are they able to tell how much time it will take nor do we get any proper answer about the process from the branch, then the loan taker starts feeling helpless.

Sensing all these circumstances, the Reserve Bank of India issued a circular. Today we will try to understand the main points of that circular. Reserve Bank of India Official Website Circular Link. If you want to use it, then you can use it by downloading it from the official website Reserve Bank of India. This circular was dated 13 September 2023.

Which was applicable to all commercial banks, rural banks, local area banks, cooperative banks and asset reconstruction companies. In this circular, it has been arranged that the loan amount will be refunded within 30 days of full payment of any loan or settlement of the loan account.

Within 30 days, the bank or finance company will return the original documents of the property and if any document creating a charge on such property is registered, then that charge will be removed from the property.

To obtain the documents, the loan taker will be given the option to get back the original property documents from the branch office or any other office. In this also, the bank cannot ask the borrower to go to any particular office, rather it will be at the will of the borrower.

What To Do If Property Documents Are Delayed After Loan Closure

This time limit of 30 days and the place to get the documents back will also be mentioned in the loan sanction letter. Regarding the delay in returning the property documents, the Reserve Bank of India had made this provision.

That if a bank or finance company does not return the documents within 30 days from the settlement of the loan account or full repayment of the loan, then the bank or finance company will tell the borrower the reason for the delay and if the delay is due to the bank, then the bank will pay a penalty of Rs 1,000 per day to the borrower.

If the documents of a borrower are lost from the bank. If the documents are lost or damaged, the bank will help the borrower to obtain certified copies of those documents etc. and all expenses for such copies will have to be borne by the bank.

And in such a situation also the bank will be responsible for compensation. So in any such situation, if the bank does not return the documents on time even after the loan is completed, then you can complain against the bank.

And you can claim compensation from the bank and for this you can also file a complaint in the consumer court. The consumer court will also order to get you compensation as per this circular.

Before Collect Property Documents After Loan Repayment

Confirm Loan Closure	Obtain a No Objection Certificate (NOC) and a loan closure letter from the bank
Request for Property Documents	Submit a written request to the bank for the return of original property documents
Verify Document List	Ask for a detailed checklist of documents held by the bank (sale deed, title deed, etc.
Schedule Collection	Arrange an appointment with the bank to collect documents and verify their condition
Obtain Document Release Letter	Request a document release letter as proof that all original documents have been returned
Update Property Records	Update local property records and remove any lien or charge against the property