SBI Home Loan property insurance mandatory?

[harsha1]

Hi Team, I have taken SBI home loan 2 years back and while taking loan that bank person insisted to take property insurance but I have denied that as it was not required to me.

Now when Final 100% disbursement demand letter came from builder , I have provided required documents to bank person, but he responded below points to disburse final amount,

========
Final disbursement

1) collect orginal receipt
2) collect demand letter
3) collect completion certificate
4) meet XXXX person and get done property insurance

5) final disbursement will happen after submitting all documents including insurance

6) submit at Vimanagar Racpc ground floor

7) No prior appointment
======

So here point 4 and 5 he is mentioning its mandatory to have property insurance which I didn't think we need as customer.

Can anyone enlight if it's mandatory to take Property Insurance and does SBI Home Loans mentioned in somewhere its compulsory to take?


Note: I have LIC INSURANCE for my self so if anything happens amount can be recovered from it as loan amount is small.

Thanks

 

[Desu Sarath]

It is not Mandatory, but some RACPC will push for it. If your RACPC is pushing for it, take it. otherwise they will make your work difficult.

I completed my 100% disbursement done and registration done with out property insurance, Deputy manager of my RACPC never asked for it.

 

[shu_sha]

No it's not mandatory also it's not a ask from RACP just the agents will ask you to take it which you can deny them upfront.

 

[anujdit]

No it's not mandatory also it's not a ask from RACP just the agents will ask you to take it which you can deny them upfront.

You can take home insurance from any general insurance company for 1 yr and show to SBI. Home Insurance is very cheap 10lacs -> 1000/-
I submitted such proof for 2-3 years and then they didn't ask after that.

 

[shu_sha]

You can take home insurance from any general insurance company for 1 yr and show to SBI. Home Insurance is very cheap 10lacs -> 1000/-
I submitted such proof for 2-3 years and then they didn't ask after that.

It's basically on your negotiation skills. In my sanction letter it was mentioned to take home insurance mandatorily but during the disbursement I pushed it back and didn't took the Home Insurance.

 

[aam.aadmi]

So here point 4 and 5 he is mentioning its mandatory to have property insurance which I didn't think we need as customer.
Can anyone enlight if it's mandatory to take Property Insurance and does SBI Home Loans mentioned in somewhere its compulsory to take?
Note: I have LIC INSURANCE for my self so if anything happens amount can be recovered from it as loan amount is small.

If you have it in writing, lodge a complaint with the RBI Ombudsman and attach the correspondence + LIC insurance copy. Also, you can drop an email to chairman@sbi.co.in with the BM in CC citing violation of the RBI directive

 

[Hemang]

Hi Team, I have taken SBI home loan 2 years back and while taking loan that bank person insisted to take property insurance but I have denied that as it was not required to me.

Now when Final 100% disbursement demand letter came from builder , I have provided required documents to bank person, but he responded below points to disburse final amount,

========
Final disbursement

1) collect orginal receipt
2) collect demand letter
3) collect completion certificate
4) meet XXXX person and get done property insurance

5) final disbursement will happen after submitting all documents including insurance

6) submit at Vimanagar Racpc ground floor

7) No prior appointment
======

So here point 4 and 5 he is mentioning its mandatory to have property insurance which I didn't think we need as customer.

Can anyone enlight if it's mandatory to take Property Insurance and does SBI Home Loans mentioned in somewhere its compulsory to take?


Note: I have LIC INSURANCE for my self so if anything happens amount can be recovered from it as loan amount is small.

Thanks

Below is the answer I got from RBI regarding the same query.

Madam/Dear Sir



Please refer to your mail below seeking information regarding requirement of buying insurance while seeking loans. In this connection, it is advised that credit related issues are mostly deregulated. The Reserve Bank of India has advised banks to have documents of investment policy, loan policy, loan recovery policy etc. prepared and duly vetted by their Boards of Directors. Banks are required to take credit related decisions based on board approved policies and extant regulatory framework as well as statutory provisions. You may refer to the Master Circular dated April 02, 2024 on ‘Housing Finance’ and Master Circular on ‘Loans and Advances – Statutory and Other Restrictions’ dated July 1, 2015, for detailed guidelines.



2. Further, you may refer to para 18(d)(v) of Master Direction- Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 (updated as on August 10, 2021) dated May 26, 2016 which states that banks shall not follow any restrictive practices of forcing a customer to either opt for products of a specific insurance company or link sale of such products to any banking product and that it shall be prominently stated in all publicity material distributed by the bank that the purchase by a bank’s customer of any insurance products is purely voluntary, and is not linked to availment of any other facility from the bank.



3. It is also advised that in case of grievance and to lodge a complaint related to deficiency in service against an entity regulated by Reserve Bank of India i.e. a Regulated Entity (RE), the RE is the first focal point for redressal of customer complaints. If the grievance is not redressed / no reply is given by the RE concerned within a period of 30 days (or) if the complainant is not satisfied with the reply received / given by the RE, the complainant can lodge the complaint against the RE involving ‘deficiency in service’ with the Reserve Bank of India Ombudsmen (RBIO) / Consumer Education and Protection Cells (as applicable), online on the Reserve Bank of India's (RBI’s) Complaint Management System website https://cms.rbi.org.in for immediate generation of the registration number and issue of acknowledgement to the complainant.



4. The Master Circulars and the Master Direction mentioned above are available on our website www.rbi.org.in under the head 'Notifications'.

Direct links:

Master Circular on Housing Finance- https://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=12656

Master Circular on Loans and Advances- https://www.rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=9902

Master Direction on Financial Services provided by banks- https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10425



सादर /Regards
पंजीकरण एंड प्राधिकरण समूह / Registration and Authorization Group
विनियमन विभाग/ Department of Regulation
भारतीय रिज़र्व बैंक, केंद्रीय कार्यालय/ Reserve Bank of India, Central Office

मुंबई/ Mumbai 400001

 

[GotoVishal]

I have MaxGain home loan from SBI. SBI, without even informing me, took out a insurance policy for my home, from SBI General Insurance, several months after disbursal. It looks like they did this so to meet an audit objection.
Despite I making huge noise, saying I will report this to RBI, Insurance ombudsman, nothing happened and SBI misused access to my account to deduct the premium for a policy from their sister concern SBI General Insurance.

 

[Hemang]

I have MaxGain home loan from SBI. SBI, without even informing me, took out a insurance policy for my home, from SBI General Insurance, several months after disbursal. It looks like they did this so to meet an audit objection.
Despite I making huge noise, saying I will report this to RBI, Insurance ombudsman, nothing happened and SBI misused access to my account to deduct the premium for a policy from their sister concern SBI General Insurance.

bhai aap kar do complaint RBI me, ye sab iss liye harkate karte hain because we don't complaint to RBI. I am pasting the reply i received from RBI for the same query i sent them months ago.

autdor@rbi.org.in

This is the official mail through which i got the reply. Kindly go through it. I sent the mail on 10th May and got the reply on 19th July 2024.

Madam/Dear Sir



Please refer to your mail below seeking information regarding requirement of buying insurance while seeking loans. In this connection, it is advised that credit related issues are mostly deregulated. The Reserve Bank of India has advised banks to have documents of investment policy, loan policy, loan recovery policy etc. prepared and duly vetted by their Boards of Directors. Banks are required to take credit related decisions based on board approved policies and extant regulatory framework as well as statutory provisions. You may refer to the Master Circular dated April 02, 2024 on ‘Housing Finance’ and Master Circular on ‘Loans and Advances – Statutory and Other Restrictions’ dated July 1, 2015, for detailed guidelines.



2. Further, you may refer to para 18(d)(v) of Master Direction- Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 (updated as on August 10, 2021) dated May 26, 2016 which states that banks shall not follow any restrictive practices of forcing a customer to either opt for products of a specific insurance company or link sale of such products to any banking product and that it shall be prominently stated in all publicity material distributed by the bank that the purchase by a bank’s customer of any insurance products is purely voluntary, and is not linked to availment of any other facility from the bank.



3. It is also advised that in case of grievance and to lodge a complaint related to deficiency in service against an entity regulated by Reserve Bank of India i.e. a Regulated Entity (RE), the RE is the first focal point for redressal of customer complaints. If the grievance is not redressed / no reply is given by the RE concerned within a period of 30 days (or) if the complainant is not satisfied with the reply received / given by the RE, the complainant can lodge the complaint against the RE involving ‘deficiency in service’ with the Reserve Bank of India Ombudsmen (RBIO) / Consumer Education and Protection Cells (as applicable), online on the Reserve Bank of India's (RBI’s) Complaint Management System website https://cms.rbi.org.in for immediate generation of the registration number and issue of acknowledgement to the complainant.



4. The Master Circulars and the Master Direction mentioned above are available on our website www.rbi.org.in under the head 'Notifications'.

Direct links:

Master Circular on Housing Finance- https://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=12656

Master Circular on Loans and Advances- https://www.rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=9902

Master Direction on Financial Services provided by banks- https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10425



सादर /Regards
पंजीकरण एंड प्राधिकरण समूह / Registration and Authorization Group
विनियमन विभाग/ Department of Regulation
भारतीय रिज़र्व बैंक, केंद्रीय कार्यालय/ Reserve Bank of India, Central Office

मुंबई/ Mumbai 400001

 

[GotoVishal]

bhai aap kar do complaint RBI me, ye sab iss liye harkate karte hain because we don't complaint to RBI. I am pasting the reply i received from RBI for the same query i sent them months ago.

autdor@rbi.org.in

This is the official mail through which i got the reply. Kindly go through it. I sent the mail on 10th May and got the reply on 19th July 2024.

Madam/Dear Sir



Please refer to your mail below seeking information regarding requirement of buying insurance while seeking loans. In this connection, it is advised that credit related issues are mostly deregulated. The Reserve Bank of India has advised banks to have documents of investment policy, loan policy, loan recovery policy etc. prepared and duly vetted by their Boards of Directors. Banks are required to take credit related decisions based on board approved policies and extant regulatory framework as well as statutory provisions. You may refer to the Master Circular dated April 02, 2024 on ‘Housing Finance’ and Master Circular on ‘Loans and Advances – Statutory and Other Restrictions’ dated July 1, 2015, for detailed guidelines.



2. Further, you may refer to para 18(d)(v) of Master Direction- Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 (updated as on August 10, 2021) dated May 26, 2016 which states that banks shall not follow any restrictive practices of forcing a customer to either opt for products of a specific insurance company or link sale of such products to any banking product and that it shall be prominently stated in all publicity material distributed by the bank that the purchase by a bank’s customer of any insurance products is purely voluntary, and is not linked to availment of any other facility from the bank.



3. It is also advised that in case of grievance and to lodge a complaint related to deficiency in service against an entity regulated by Reserve Bank of India i.e. a Regulated Entity (RE), the RE is the first focal point for redressal of customer complaints. If the grievance is not redressed / no reply is given by the RE concerned within a period of 30 days (or) if the complainant is not satisfied with the reply received / given by the RE, the complainant can lodge the complaint against the RE involving ‘deficiency in service’ with the Reserve Bank of India Ombudsmen (RBIO) / Consumer Education and Protection Cells (as applicable), online on the Reserve Bank of India's (RBI’s) Complaint Management System website https://cms.rbi.org.in for immediate generation of the registration number and issue of acknowledgement to the complainant.



4. The Master Circulars and the Master Direction mentioned above are available on our website www.rbi.org.in under the head 'Notifications'.

Direct links:

Master Circular on Housing Finance- https://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=12656

Master Circular on Loans and Advances- https://www.rbi.org.in/Scripts/BS_ViewMasCirculardetails.aspx?id=9902

Master Direction on Financial Services provided by banks- https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10425



सादर /Regards
पंजीकरण एंड प्राधिकरण समूह / Registration and Authorization Group
विनियमन विभाग/ Department of Regulation
भारतीय रिज़र्व बैंक, केंद्रीय कार्यालय/ Reserve Bank of India, Central Office

मुंबई/ Mumbai 400001

Thanks, but mine is now some years old incident. After initial noise, with SBI not relenting any bit, I just moved on.