If you are shocked to read the State Bank of India'a compensation policy, I can understand. The bank can "lose" original title deeds of your dream home, your biggest investment, and in return will only have to pay "out of pocket expenses" for obtaining duplicate title deeds and a lump sum compensation of Rs. 5000. There are no guidelines from Reserve Bank of India in this regard. Consumer Courts, however, take a different view sometimes. (Read more below...) Link to full SBI Compensation policy: https://www.sbi.co.in/user.htm?action=viewsection&lang=0&id=0,453,661
In November 2012, New Delhi District Consumer Disputes Redressal Forum directed IDBI Bank to pay Rs 3.50 Lakh lakh as compensation to a home loan borrower for losing the title deeds of his flat. The forum also ordered IDBI to issue a certificate stating that it had received various documents pertaining to the borrower's flat at Pitampura in North Delhi but had lost the same later. The forum said that "the opposite party (IDBI Bank) was negligent in taking proper care of the documents. Once it was aware of the nature of documents of title, it should have sent it to its own office in Bombay by a official messenger or an officer personally rather than through a courier. It had to exercise the same prudence and care as it would do in case of its own property in handling such documents. The case discloses utter deficiency on its part resulting in incalculable loss to the complainant (borrower)". The Forum also directed IDBI Bank to get the lost documents reissued and duly certified by the DDA and the cooperative group housing society and to take all necessary steps to safeguard the borrower's interests. The forum's order came on the plea of Delhi resident Mr. Narinder Kainth, who had alleged that IDBI Bank had lost the title documents from its custody. IDBI Bank while admitting that the documents were lost, had contended that loss of documents was not intentional and they were lost by the courier company in transit. The forum, however, rejected the bank's contention saying the Forum cannot split liability between the bank and the courier service and directed the bank to pay compensation of Rs. Three Lakh for harassment and Rs 50,000 as litigation expenses.
I am still worried for all the home loan borrowers in India.