RBI Implements Strict & Tedious Rules for Banks Lending to Property Sector

Reserve Bank of India has directed all banks to strictly verify the genuineness of documents before releasing loans to real estate borrowers. The reason for issuing such guidelines is to ensure safety and avoid case of forgery. It is seen that so much fraud have been done on the basis of certified documents therefore banks have become very strict before sanctioning lone against the security of land. It is made compulsory to verify all the documents at every level to ensure is legitimateness. The bank present action is a part of the series of scandals that took place few months back. The Central Bureau of Investigation has arrested big executives taking bribe. Bank took this seriously and issued guidelines to check the authenticity of all documents at all levels. This may delay loan sanctioning to borrowers but bank called it as a part of legal process.

The reason for increasing fraud on part of failure of document verification duo to lack of trained staff. In the new guide bank will be having right to directly communicate with the concerned person who is the issuer of certificate. If is found that the issuer is fraud, Indian Bank association will issue a caution list to be given to all banks regarding illegal certifier. This is to prevent increasing frauds by real estate borrowers.