Now after repaying the home loan, banks and financial institutions will have to return the property documents to the customers within 30 days. If this is not done, the customer will have to pay Rs 5000 per day as compensation.
The Reserve Bank issued a circular on Wednesday giving this information. The new instructions will be applicable to banks, NBFCs, housing finance institutions, asset reconstruction companies, regional banks and co-operative banks.
Usually, in exchange for the loan, banks keep the original documents of the property as collateral. In June, an RBI committee had said that if the bank loses the original papers of the borrowers, they will have to pay a penalty along with compensation.
Recently, the Reserve Bank had issued new guidelines to banks regarding loans. It was told that now the loan agreement will be in the customer's own language. In it, banks will have to write the rules of penalty and late fees in bold letters. These rules will come into effect from January 1 next year.
The loan agreement will be in the customer's own language. While doing this, banks will write the penalty and late fee on late payment in bold letters.
Housing finance companies will tell the customer taking home loan how much fee will be refunded if the loan is not disbursed on time. If the loan is to be changed from floating to fixed, what will be the fees? The situation regarding premature payment will also have to be clarified.
Housing finance companies will issue the sanction letter to the customer in the local language. In this, understandable information will have to be given about the process of determining the annual interest rate and the EMI structure.
Home loan customers will have to be told the interest rate on an annual basis, so that the customer can know how much interest he is paying in a year. Earlier, information about penal charges also had to be given, which is not necessary now.
A generally accepted procedure will be adopted to decide the penalty or loan charges. A board will be formed. Whatever he decides, everyone will have to accept it.
The penalty rate will be fixed. It has to be clarified which of the conditions mentioned earlier has been violated by the customer. There will be no discrimination against any customer in implementing these.
The sales team of financial companies will have to explain the terms and penalties in detail before giving the loan. Rates must be displayed on the site.
The penalty to be imposed on non-payment of EMI will be explained in detail in the reminder messages sent to customers.
Personal loan borrowers will not be charged any penalty higher than the rules for delay in repaying the loan sanctioned for business and other needs.
If you do not have money to buy a house. Then banking and non-banking finance companies give loans for long periods. It is taken at interest rate. Which has to be repaid within a fixed time in EMI i.e. monthly installment.