New Delhi, Sept. 24 -- Paying off the last EMI of a home loan does not mean the paperwork is over. The loan closure process is complete only when the original property documents are returned and the lender's charge on the property is removed.

To prevent delays in this process, the Reserve Bank of India (RBI) has set a time-bound framework for lenders. The rule, applicable to cases from December 1, 2023, requires regulated entities such as banks and NBFCs to complete the loan closure formalities within 30 days of full repayment.

If the lender fails to meet this deadline, it can be liable to compensate the borrower for the delay, according to RBI's September 13, 2023 directions.

The RBI directions treat loan closure as more than just rep...