SBI Fined Rs 2.5 Lakh for Not Returning Property Documents After Home Loan Repayment

Bastar, Chhattisgarh: In an important decision, the District Consumer Commission in Jagdalpur has directed the State Bank of India (SBI), Collectorate Branch, to pay a fine of Rs 2.5 lakh along with ₹5,000 for mental harassment to two home loan customers.

The case was filed by Saroj Devi and Akhilesh Kumar Chauhan, residents of Jagdalpur, who had taken a home loan from the Collectorate Branch of SBI. The bank had kept the original documents of the applicants’ immovable property as collateral until the loan was repaid.

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The issue began when the applicants completed all home loan EMI payments, but even after repaying the full loan, the bank did not return their property documents within 30 days, which is required under banking regulations.

When repeated requests failed, Saroj Devi and Akhilesh Kumar filed a formal complaint with the District Consumer Commission. Only after filing the complaint, the bank finally handed over the documents.

The customers pursued the matter further through the consumer commission, seeking justice and compensation for the inconvenience and violation of their rights.

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After carefully hearing the case, the District Consumer Commission ruled that:

• State Bank of India is bound by the rules of the Banking Regulation Act, 1949 and the Reserve Bank of India (RBI) Act.
• As per regulations, the bank was supposed to return the property documents within 30 days after full repayment.
• The delay was unjustified and amounted to deficiency in service.

Therefore, the Commission directed SBI Collectorate Branch, Jagdalpur, to pay:

• ₹2,50,000 as compensation, and
• ₹5,000 for causing mental stress to the applicants.

This decision sends a clear message that banks must follow rules and return original documents promptly once loans are repaid. Delays without valid reasons can lead to penalties and legal action.

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It also highlights the importance of consumer rights and the role of Consumer Commissions in protecting those rights, especially in cases of negligence or poor service by financial institutions.

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