RBI Panel BP Kanungo Committee: The BP Kanungo Committee, constituted by the Reserve Bank of India, has proposed a proposal, under which it has been said that if a bank damages the property document of any loan borrower or loses it carelessly, then the Should be fined. Usually banks or lenders ask for property documents in lieu of loan and the documents are kept till the loan is repaid.
In May 2022, the RBI constituted a six-member committee headed by BP Kanungo with the objective of examining and reviewing customer services in regulated entities to protect the interests of customers. In the report of the committee released on June 5, several suggestions have been underlined to increase the service standard of the customers.
Why the committee had to be formed
Many such cases had come to the notice of the Reserve Bank of India, in which there was information about the disappearance of the loan documents of the customers from the bank or the borrowers or there was a complaint about their loss. In such a situation, RBI formed this committee under the chairmanship of BP Kanungo to protect the interests of the customers. Now the RBI panel has proposed to impose fine regarding this. Along with this, after repaying the loan, a proposal has been presented to close the account and return the documents.
Penalty for delay in return of documents
It has also been suggested by the committee that delay in returning the documents to the institutions may be fined. It is proposed to assist the client in getting certified copies and providing adequate compensation in case of lost documents, says advocate Ankit Rajgarhia, reports Moneycontrol. RBI has sought comments on the recommendations of the committee by July 7.
document return deadline
The Reserve Bank may give a time limit to the lenders to return the documents on the recommendations of the panel. If the documents are not given to the customers within this time limit then penalty can be imposed. The Reserve Bank’s panel said that it is the responsibility of the banks or lenders to keep the documents of the customers safe. If they fail to do so, then they are eligible for action.
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