Farmers’ association in Tiruppur to help out ryots struggling to secure pledged property documents from banks post loan closure

The Tamil Nadu Vivasayigal Padhukappu Sangam in Tiruppur has launched an initiative to help out farmers, who have not been able to secure their original documents from banks even after closure of loans, based on what it perceives to be a landmark directive issued by the Reserve Bank of India (RBI) to the lenders last September.

The RBI’s directive to the banks and non-banking finance companies requires them to release all original property documents which have been kept as collateral within 30 days of full payment of loan failing which they will face financial penalty.

Later this week, the farmers’ association has planned a protest in front of the Pethampatti branch of a nationalised bank at Udumalpet espousing the cause of a farmer who has not got back the original documents five years after loan closure.

The farmer, Narayanasamy, 65, of Kongalnagaram Pudur, it is learnt, has not able to get back the original document that was pledged with the bank by his late father Duraisamy Naidu during 1982, who had died the following year.

A decade later, the bank had initiated legal proceedings against Narayanasamy. During 2018, Narayanasamy had reportedly been issued a loan closure certificate, after the nationwide initiative for One-Time-Settlement. However, since the documents have not been returned so far, the Tamil Nadu Vivasayigal Padukattu Sangam has resolved to take up the cudgels for the farmer for retrieving the original document for the land measuring a little over three acres.

In its directive to the lenders, the RBI had also said that the lender has to inform the borrower about the reasons for the delay in returning the document.

Where the delay is attributable to the lender, it shall compensate the borrower at the rate of ₹5,000 for each day of delay, the directive states.

In case the original property documents are lost or damaged, either in part or in full, the lenders will help borrowers in obtaining duplicate copies and bear the associated costs, in addition to compensation of ₹5,000 for each day of delay, the directive states.