RBI should direct banks to have nominee option for loan accounts, says consumer organisation in Coimbatore

Published - June 16, 2024 07:05 pm IST - COIMBATORE

The Coimbatore Consumer Cause has appealed to the Reserve Bank of India (RBI) to direct banks to have nominee facilities for gold, housing, and other loans that are linked to collateral security.

The consumer organisation stated that while there are nominee facilities for deposits, bank accounts, and lockers, there is no such option for loans. Therefore, if an individual who has pledged jewellery or property documents as collateral for a loan passes away, their legal heirs encounter difficulties in obtaining the pledged items. Additionally, if one of the legal heirs refuses to cooperate, the pledged items remain with the bank for an extended period.

“If the nomination facility was available for the loan accounts, on the death of the loanee, the title deeds / jewels could be easily handed over to the nominee – after closure of the loan account. The loan accounts may be closed by anybody but the documents / jewels could be handed over to the nominee alone by the banks as per the wishes of the owner of the property,” it said.

The gold ornaments or documents deposited as collateral security should be delivered to the nominee on the closure of loan accounts and production of the death certificate of the account holder. Anyone can be permitted to close the loans. But the ornaments and documents pledged should be handed over only to the nominee, the organisation said.

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