In a striking reprimand of India’s largest public sector bank, the District Consumer Disputes Redressal Forum in Jagdalpur has fined the State Bank of India (SBI) ₹2.5 lakh for its failure to return property documents after full repayment of a home loan, a case that legal experts say underscores persistent gaps in banking accountability.
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Timely Repayment, But No Closure
The complaint was filed by Saroj Devi Chauhan and her son Akhilesh Chauhan, who had availed of a home loan from SBI’s Collectorate Branch in Jagdalpur. According to advocate Sagar Devre, who represented the family, the loan was repaid in full with all EMIs cleared on time. As per Reserve Bank of India (RBI) guidelines, the bank is mandated to return all original property documents to the borrower within 30 days of loan closure and issuance of a No Objection Certificate (NOC).
However, the Chauhans alleged that despite several follow-ups, SBI delayed the return of their land documents by more than 50 days, 20 days past the permissible limit. Had the bank acted responsibly and returned the documents upon the initial hearing or even upon receipt of the forum’s notice, there would have been no need for litigation, as stated by Devre.
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RBI Guidelines Ignored, Forum Steps In
The forum noted that SBI did not respond to notices in time and made no attempt to resolve the issue, signalling what it described as a “clear instance of deficiency in service and non-compliance of RBI norms.” The forum concluded that the delay was not only unjustified but also amounted to mental harassment of the borrowers.
Ruling in favour of the complainants, the forum invoked RBI’s Master Circular on Customer Service in Banks and imposed a penalty of ₹5,000 per day of delay beyond the permissible 30-day window. The total came to ₹2.5 lakh, a penalty that legal experts say could influence future complaints regarding similar issues with financial institutions.
This case comes amid rising concerns about customer service standards in India’s banking sector, especially in rural and semi-urban areas. While most banks advertise their commitment to transparency and efficiency, customers continue to report procedural delays and a lack of accountability, particularly in post-loan services.
About the author – Prakriti Jha is a student at National Forensic Sciences University, Gandhinagar, currently pursuing B.Sc. LL.B (Hons.) with a keen interest in the intersection of law and data science. She is passionate about exploring how legal frameworks adapt to the evolving challenges of technology and justice.