Stamp duty on consortium agreements.

Querist : Anonymous (Querist) 19 December 2020 This query is : Resolved
Dear Sir,

On the advise of RBI the IBA has prepared and suggested draft if working capital consortium agreement for consortium lending. While suggesting this they have not noticed that for the loans which are based on equitable mortgage banks execute deposit of title deed ( article 6 ) and unattested hypothecation ( exempted thru notification since English time ). In the IBA suggested document i.e Working capital consortium agreement contains loan details as well as security details. Because of this it may fall under article 37(b) / mortgage deed. Article 37(b) or mortgage deed without possession attracts at least 10 times higher stamp duty then article 6 meant for deposit of title deed. This query is presently related to Rajasthan but may affect other states in future. Pl help us and suggest how to deal this situation.

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Isaac Gabriel (Expert) 19 December 2020
Report to the banking ombudsman about the exhorbitant cost than the normal course.

P. Venu (Expert) 20 December 2020
The matter could be taken up with the RBI as well as the IBA with a request to revisit the decision.

Rajendra K Goyal (Expert) 21 December 2020
This is a matter of policy, if RBI directed, has to be followed till amended by RBI. Matter may be taken with RBI at Bank level.

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