Home loan repayers in Karnataka in fix over lack of communication between banks and dept officials

Hubballi: Home loan repayers in Karnataka are in a fix over the lack of official communication between the department of stamps and registration and banks on providing one-time passwords (OTPs) to customers while executing deeds of reconveyance.

The department’s Kaveri 2.0 software makes OTP-based Aadhaar verification compulsory for both property owners and bank officials to process applications.

However, several branch managers are hesitant to provide the OTP, which is sent to their personal phone numbers, as they fear it could lead to fraud and long-term legal liability in the absence of any communication from either the RBI or state government.

A reconveyance deed is a crucial legal document required to remove the bank’s charge on a property once a loan is fully repaid. Without this deed, property owners may face complications during resale, registration or mutation of records.

Till a month ago, nationalised bank officials were exempt from either personally visiting sub-registrar offices for authentication or providing OTPs for executing reconveyance deeds.

Banks earlier provided the branch’s TIN number along with an official’s Aadhaar details.

Officials at the department of stamps and registration and sub-registrars say OTP-based verification was introduced to minimise fraud and bring in transparency.

Inspector General of Registration and Commissioner of Stamps Mullai Muhilan M P said section 7 of Aadhaar Act, 2016, has been legalized now, making sure that both property owners and bank officials prove their identity while executing the deed. “We have not complicated the process, but only enforcing the law,” he says.

Sources in the sub-registrar office told DH that this was done to minimize fraud, as earlier people used to apply for reconveyance deeds without repaying the loans.

The senior officer said as applications are generated through the citizen login, there is no need for the government to issue any orders to banks in this regard.

However, multiple property owners complained that the process of applying through Kaveri 2 was too complicated and that, without the help of ‘agents’, it was impossible to apply.

Mullai refuted charges that the process was currently complicated. “We are trying to ensure that the public do not go to touts and agents to get their work done”.

Meanwhile, bankers are hesitant to provide OTP details to agents and third parties.

“We bankers propagate that OTPs and other sensitive details should not be shared with strangers online. Now, the sub-registrar office wants us to give OTPs received on personal numbers. Who will be liable if something goes wrong?” said Maruti, assistant manager at the RACPC State Bank of India branch in Hubballi.

Another branch manager from Dharwad said she recently received a call from the Lokayukta seeking clarification on multiple property transactions linked to her Aadhaar number, after she had given 10 OTPs to customers in a day. Bank officials said that in the absence of official communication from their senior officials, the state government or RBI, it was risky to provide OTPs.

M Bhaskara Chakravarthy, convenor of Karnataka State Level Bankers’ Committee (SLBC) and general manager, Canara Bank, said the issue of OTP resistance from branch managers had come to SLBC’s notice.

“While officially we have not received any communication from the government or sub-registrars, keeping in mind the hardship customers may face, we have orally asked officers to cooperate with property owners,” he said.