In a relief to borrowers, Punjab Revenue department has decided not to charge mutation fee separately on different properties mortgaged by loan seekers to raise money from banks.
"Borrowers in Punjab will now not have to pay mutation fee separately on the loan amount of different properties which are to be mortgaged with banks for raising money," a bank official said here on Monday.
A clarification has been issued in this regard by Punjab Revenue Department during a meeting of sub-committee of State Level Bankers' Committee (Punjab) held recently, he said.
Bank borrowers in Punjab were paying more in order to seek loans as they were asked to pay mutation fee on different properties offered for mortgage separately instead of charging on the loan amount only, bank official said.
"There is no problem when mutation is entered on only one property. But Punjab Revenue department was charging mutation fee separately for each property mortgaged, thus borrower ended up paying more," bank official said.
Citing an example, bank official said if a loan is sanctioned for Rs. 50 lakh and four different properties are mortgaged, the mutation fee was being charged on all the four properties.
While banks secure their loans by mortgaging the property, the state revenue department charges fee for creating mutation in favour of bank in government records.
In the clarification issued, Punjab Revenue department found that it was not "appropriate" to charge mutation fee separately in respect of different properties located in more than one district, mortgaged with banks for one loan.
"Therefore, it has been decided if any borrower mortgages different properties located in more than one district, the mutation fee will be charged by the officials of that district where maximum number of borrower's properties are located.
"With regard to properties located in other districts, borrower will inform the official concerned about mutation fee already paid so no further charges are to be sought for creating mutation," as per clarification.
In another issue, it was also resolved that the fee charged by advocates from farmers while issuing Kisan Credit Cards (KCC) should be borne by banks as farmers had already mortgaged their lands with banks.
Farmers were reportedly being charged Rs. 1,500-2,000 in Punjab by advocates for KCC. These issues were discussed at the meeting of sub- committee of State Level Bankers' Committee (Punjab).