The draft would apply the same stressed-asset recovery and resolution discipline to banks and NBFCs alike, removing the current split in how enforcement is run depending on who holds the security.
What this changes for a title check
RBI's draft would apply one uniform recovery rulebook to banks and NBFCs alike, effective from 1 July 2026 once finalised. It requires a written recovery policy, IIBF certification for recovery agents, a publicly displayed list of empanelled agents with names and engagement dates, and a rule that legal action to enforce security cannot be the first resort, some structured recovery step has to come first. Loan agreements must also spell out a proper repossession process, including how a borrower gets the asset restored and how any eventual sale or auction is run.
For a property currently under a lender's possession, this gives a title checker a real checklist. Is the agent who took possession on the lender's published empanelled list, was legal action skipped as the first move, and is there a documented restoration or auction trail. A possession that fails these markers is a weaker position for the lender to be relying on when the property later changes hands. This is still a draft, not yet in force, so treat it as forward guidance rather than settled practice.