eCircular

Department: CREDIT POLICY AND PROCEDURES

DEPARTMENT
Sl.No.: 696/2017 - 18
Circular No.: CCO/CPPD-ADV/70/2017 - 18
Date: Mon 25 Sep 2017

The Chief General Manager

State Bank of India
All LHOs /CAG/MCG/SME/SAMG/ABU/PBBU/REHBU

CPP/SGS/Cir/ 25/09/2017

Madam/Dear Sir,

SOP ON TITLE DEEDS & TITLE INVESTIGATION REPORT (TIR)

Please refer to the Master Circular on TIR issued vide e-Circular No.CCO/CPPD-
ADV/5/2013-14 dated 13/04/2013 containing detailed guidelines on the subject as well
as formats for seeking TIR from the Bank’s empanelled Lawyers.

2. Notwithstanding the instructions, in the recent past, a number of fraud cases in

respect of Title Deeds / TIR have been surfaced. In order to find out major reasons
attributed to Title Deeds / TIR and strengthening the process for seeking TIR, an
outside expert Law firm was engaged for conducting a study. The study revealed the
following as major reasons for occurrence of frauds in the area of Title Deeds:
i. Multiple title deeds.
ii. Vendor impersonation cases.
iii. Delay in creation of mortgage.
iv. Delay in registration of the mortgage.
v. Properties not in existence and vacant land.
vi. Creation of mortgage on lands acquired by the Government.
vii. Fake stamp documents.
viii. The property is tenanted (other than rent plus scheme) and is subject to any
proceedings and is vested with the Government.
 ix. The area of the immoveable property should be tallied with the schedule of the
title deed, site plan, sanctioned plan, parcha and actual measurement by the
surveyor;
x. Building has not been constructed as per the sanctioned plan confirmed by the
relevant local regulatory authority.
xi. In case of immoveable property offered as security is as part of a bigger
immoveable property, there are no clear demarcations of the various parcels of
land mortgaged to the Bank.
xii. The Bank should ensure that in the event mortgage is being created by any
company, then the provisions of the Companies Act, 2013 including in relation to
the corporate authorisations and restrictions as contained under section 185 are
adhered to and no mortgage is created in contravention or non compliance with
these provisions.
xiii. The inspection report is not made in the proper format and the route map to the
immoveable property is not properly recorded.
xiv. Photographs of the immoveable property are not taken and the Relationship
Manager should also go a positioning of the immoveable property by way of the
online GPS systems.

3. Since Master Circular on TIR was issued in April,2013, a need was felt to update the
same with the latest instructions and SOP also to be prepared for convenience of
operating units. Accordingly, SOP has been prepared and is placed as Annexure. The
mitigating measures for the concerns mentioned in para.2 above have been factored in
this SOP.

4. The SOP comprises of two parts:-

 Part-I: Discusses procedure for seeking TIR and creation of Equitable Mortgage
(Replaces the extant guidelines as mentioned in the Master Circular on TIR
issued on 12/04/2013 and subsequent circular instructions in this regard).

 Part-II deals with safekeeping/handling of Title Deeds.

5. The changes in instructions have been highlighted in bold in SOP. A synopsis of the
major changes and revised instructions are placed as Annexure-I to this Circular.
7. This modified circular instructions supersedes all earlier instructions issued in this
regard.

8. DGM & CCO, in consultation with Law Officers posted in Circles / Administrative
Offices / MCG / CAG / SAMG shall advise the latest changes in stamp duty /
registration of EM (state subject) / noting of lien on agricultural properties etc., if any, to
the branches under their control. They shall also advise CPPD for carrying out suitable
amendments in the next review.

9. Please advise branches/operating units under your control accordingly.

Rationale:- Updation of Master Circular on TIR and SOP to handle Title Deeds.

Yours faithfully

for Dy. Managing Director &

Chief Credit Officer
 Annexure-I
SOP – Part-I – Synopsis of major changes and revised instructions

Master Circular on Title Investigation Report – Revision

Extant Instructions Revised instructions

1.2.1 TIR is to be obtained only from the Bank’s
Modified instructions Empanelled Advocate [Advocate is to be identified
through the Vendor Management System (VMS)] which
has a Master Database of TPEs regarding centralised
monitoring, work order allotment, tracking the status of
work orders, performance tracking and evaluation of
services offered before payment/renewal of contract of
TPEs.
In House Legal Teams have also been formed at certain
places by the Bank.
Wherever, the word “Advocate” is used in this SOP, it
indicates “Empanelled Advocate / In House Legal
Team.
A satisfactory Title 1.2.2 Obtention of two TIRs
Investigation Report from two If our exposure is collaterally secured by the following types of
different empanelled properties, a satisfactory Title Investigation Report (TIR) from
two different empanelled advocates should be obtained,
advocates should also be
irrespective of amount in all segments (including Housing
obtained, irrespective of
Loans):-
Business Segments, for loans
i. Properties offered by third party guarantors whether
of Rs 1.00 crore & above,
individual or non-individual.
where collaterals are available.
ii. Properties acquired through Gift deed.
.
iii. Properties sold by Power of Attorney holders to our
borrower/guarantor.
1.2.3 In case of Housing Loans where properties do not fall
Extant Instructions Revised instructions
into the abovementioned categories, a satisfactory Title
Investigation Report (TIR) from two different empanelled
advocates (**) should be obtained in the following cases:
In respect of Housing Satisfactory TIR from
Loans where the RERA two different empanelled
registration is available advocates (**) should be
and Loan amount is obtained
above Rs.5 crores.
In respect of Housing Loans
where RERA registration is
not available and Loan
amount is Rs.1 crore and
above.
Second Sales and Loan
amount is Rs.1 crore and
above.
(**) Wherever In House Legal Team has been created one
TIR shall be obtained from them and one TIR shall be
obtained from the empanelled Advocate.
1.2.2 Branches have to collect all details of the property
including all the title documents from the customer under
proper acknowledgment (As per format enclosed) and
forward to the advocate from whom it has been decided to
obtain the Tile investigation Report (TIR).
Branches to correspond directly with the advocate and the
direct correspondence between the advocate and the
borrower/ mortgagor should be avoided.
Advocate has to submit the TIR in the prescribed format to
the Bank directly.
1.3 In respect of all cases where the loan amount is
less than Rs.1.00 crore, the advocate has to make
search of the title of the property for not less than 13
years if it establishes clear and marketable title.
Extant Instructions Revised instructions

However, if the flow of title is not clear or in the event

of any ambiguity about the title after search for 13
years, the Advocate may make search for not less than
30 years.

In respect of all cases where the loan amount is Rs.1.00

crore and above, the advocate has to make search of
the title of the property for not less than 30 years
irrespective of the fact that clear and marketable title is
established by a shorter search of 13 years.

In case of Builder Tie Ups (in case of Home Loans), for

approval of the project search of the title for not less
than 30 years is mandatory.
1.4. Where TIR is to be obtained from two different
Advocates and there is any divergence in opinion of
both the Advocates in TIR, regarding mortgage of a
property, matter has to be referred to Law Officer/ In
house Legal Team, at AO/LHO as the case may be, and
act accordingly as per their guidance before creation of
mortgage.

1.6 Certain instructions in this SOP have been modified

in respect of Home Loans. Therefore, in respect of
Home Loans in addition to the extant instructions,
instructions wherever modified for Housing Loans, as
per Annexure-V, should be complied with.
Selfie of the Inspecting Official 1.11.1 Selfie of the Inspecting Official at the site, with or
at the site, with or without the without the borrower should be taken as an integral
borrower should be taken as part of inspection and the same should be kept along
an integral part of inspection with the security documents. This exemption (with or
and the same should be kept without the borrower) will apply in respect of all Loans
Extant Instructions Revised instructions
along with the security (including Housing Loans), as the inspection is
documents. This exemption required to be conducted independently. Digital date
(with or without the should be imprinted on the photograph.
borrower) will apply only in
respect of Housing Loans.
For other properties offered as
Security, the extant
instructions of taking a
photograph along with the
owner of the property/borrower
remain unchanged.
At no circumstances, the No change.
advocate should submit a Title
Investigation Report (TIR) 1.15 Addition:
certifying clear and marketable Advocate has to submit the TIR in the prescribed format
title of the with only.
property
conditions or stipulations to be Similarly professional fees/expenses charged by the
complied. Further, the TIR advocate should be paid by the Bank directly to them
along with all the original and recovered from the concerned customer.
documents and certified copies
of documents are to be
submitted directly to the
operating unit concerned and
in no circumstances the same
to be handed over to the
borrower/guarantor or his/their
agent/representative.
Extant Instructions
Clarification in respect
extant instructions.
Clarification in respect
extant instructions.
Revised instructions
of 1.18 The procedure for creating EM of leased
properties such as MIDCO, CIDCO, HUDA, HSIDC and
DDA etc. should also be discussed in the TIR by the
Advocate. Law Department at respective LHO/MCG-
MCRO/CAG branch would give clear guidelines to
branches / operating units prevailing as on the date as
a onetime measure and keep them updated on an
ongoing basis.
A reference may be made to Law Department at LHO /
AO / BV concerned to clarify the position regarding
mortgageability of such type of properties before
accepting them as security.
1.19 Hindu Undivided Family (HUF)
Similarly, in view of the legal implications involved,
operating units should exercise greater care in
mortgaging properties of HUFs. Wherever considered
necessary, branches should consult the Law Officer in
the Circle/Business Vertical concerned, in this regard.
of 1.21 If the title deeds are in a vernacular language, full
particulars of the title deeds in English signed by the
Bank’s empanelled advocates/solicitors should be
obtained. A complete record must be kept of all such
investigations and searches carried out and the reports
received from the local advocates / Bank solicitors.
1.22 Wherever Cooperative Housing Society is yet to be
formed, an undertaking from borrower should be
obtained stating that he/she would inform Bank and
submit share certificate along with NOC as and when
the society is formed.
1.23 Branches / Operating units will adhere to
instructions/guidelines issued by respective business
units specifically with regard to delivery process
viz.SME Delivery model etc.
Extant Instructions Revised instructions
Annexure-B Annexure-B
Report of Investigation of Report of Investigation of Title in respect of immovable
Title in respect of immovable Property
Property No change.
5.a) Whether certified copy of Addition:-
all title documents are 5.b) i) Whether all pages in the certified copies of title
obtained from the relevant documents which are obtained directly from Sub-
sub-registrar office and Registrar’s office have been verified page by page with
compared with the documents the original documents submitted?
made available by the
proposed mortgagor? (Please 5.b) ii) Where the certified copies of the title documents
also enclose all such certified are not available, the copy provided should be
copies and relevant fee compared with the original to ascertain whether the
receipts along with the TIR.) total page numbers in the copy tally page by page with
the original produced.
(In case originals title deed is not produced for
comparing with the certified or ordinary copies should
be handled more diligently & cautiously).

Annexure-B No change.
Report of Investigation of Addition:
Title in respect of immovable 25. b) i) Whether the property (to be mortgaged) is
Property purchased by the above Company from any other

25 a) Whether the property Company or Limited Liability Partnership (LLP) firm ?

belongs to a Limited Company, Yes / No.
b) ii) If yes, whether the search of charges of the
check the Borrowing powers,
property (to be mortgaged) has been carried out with
Board resolution, authorisation
Registrar of Companies (RoC) in respect of such
to create mortgage/execution
vendor company / LLP (seller) and the vendee
of documents, Registration of
company (purchaser) ?
Extant Instructions Revised instructions
b) iii) Whether the above search of charges reveals any
prior charges/encumbrances, on the property
(proposed to be mortgaged) created by the vendor

any prior charges with the company (seller) ? Yes / No.

b) iv) If the search reveals encumbrances / charges,
Company Registrar (ROC),
whether such charges/encumbrances have been
Articles of Association
satisfied? Yes/No.
/provision
Annexure-B for common seal 47. Addition:-
Report of Investigation of 1) Whether the Real Estate Project comes under Real
Title in respect of immovable Estate (Regulation and Development) Act, 2016?
Property Yes/No.
2) Whether the project is registered with the Real
New certificates to be given Estate Regulatory Authority? If so, the details of such
by the Advocates as advised registration are to be furnished.
by Law Department Whether the registered agreement for sale as
prescribed in the above Act / Rules there under is
executed?
3) Whether the details of the apartment / plot in
question are verified with the list of number and types
of apartments or plots booked as uploaded by the
promoter in the website of Real Estate Regulatory
Authority?
New instructions.
Annexure-C Certificate of title
12. It is certified that the property is SARFAESI
compliant.
Extant Instructions Revised instructions

Annexure-C1 Annexure-C1

Certificate of Title on the Certificate of Title on the Basis of Certified copies of

Basis of Certified copies of the Title Deeds
the Title Deeds 5. There are no prior Mortgage/ Charges/ encumbrances
5. There are no prior whatsoever, as could be seen from the Encumbrance
Mortgage/ Charges/ Certificate for the period from _________ to __________
encumbrances whatsoever, as pertaining to the Immovable Property/(ies) covered by
could be seen from the above said Certified copies Title Deeds. The property is
Encumbrance Certificate for free from all Encumbrances.
the period from _________ to
__________ pertaining to the
Immovable Property/(ies)
covered by above said
Certified copies Title Deeds.
The property appears to be
free from all Encumbrances.
Annexure-E Annexure-E
Checklist on scrutiny of TIR Checklist on scrutiny of TIR by the Branches
by the Branches 6) a) No change.
6) a) As per the TIR, whether Addition:-
the property offered as security b) Whether the Advocate who has issued TIR has taken
to the Bank is unencumbered/ search in the Registrar of Companies where the
unattached? borrower is a company. In case the borrower has
purchased the property (which is to be mortgaged)
from another company, the Advocate has to make
search in the ROC for both the companies.
What are the observations/comments of the advocate
on item No.25 of Annexure-B as well as item Nos. 5 (b)
and 25 (b) i to iv.

Annexure-F Annexure-F
Checklist on identification Checklist on identification and physical verification of
Extant Instructions Revised instructions
and physical verification of the properties
the properties Certificate
Certificate We confirm that we have personally visited the property to
We confirm that we have be accepted as Mortgage on ------------ and
personally visited the property certify that the details given in the TIR / property
to be accepted as Mortgage on documents conform to our finding.
and certify that the details
given in the TIR conform to our
finding.
Annexure-G Procedure and Annexure-G Procedure and Precautions
Precautions
To safeguard the interest of 2.13 To safeguard the interest of the Bank, a letter
the Bank, a letter confirming (contents printed in an Inland Letter) confirming the
the deposit of the title deeds deposit of the title deeds with intent to create the
with intent to create the mortgage in favour of the Bank as security for the
mortgage in favour of the Bank advances should be obtained from the mortgagor(s) [by
as security for the advances post].
should be obtained from the
mortgagor(s).
Annexure-G Procedure and 2.15 When the mortgagor who has already created an
Precautions equitable mortgage in favour of the Bank as security for
When the mortgagor who has existing advance, is granted additional/fresh advance
already created an equitable sought to be secured by extension of the existing mortgage,
mortgage in favour of the Bank the following procedure should be followed:
as security for existing i. a supplementary recital on the lines of the
advance, is granted Bank’s standard format should be recorded in the
additional / fresh advance title deeds register; and
sought to be secured by ii. supplementary confirmatory letter should be
extension of the existing obtained from the mortgagor confirming the deposit
mortgage, the following of title deeds pertaining to the properties made
procedure should be followed: earlier which shall continue as security for the
(a) a modified recital on the enhanced/ additional/ fresh loan granted to the
Extant Instructions Revised instructions
lines of the Bank’s standard borrower
format should be recorded in
the title deeds register; and
(b) a modified confirmatory
letter should be obtained from
the mortgagor following the
recording of the recital.
Annexure-G Procedure and
Precautions
4.1 Demarcation 4.1 No change.
Demarcation of the property is Addition:-
important for its identification The property should be legally accessible through
and possible enforcement, if normal carriers to transport goods to factories /
required on a later date. houses, as the case may be.
Hence, no property should be
accepted as primary security/
collateral security if the
property cannot be
demarcated. The advocates/
Valuers should also be
sensitised in this regard.
Annexure-G Procedure and 7. In no case photocopy / laminated photocopy of the title
Precautions deed is to be accepted. Laminated original documents
In no case photocopy / should also receive a more cautious approach. Where the
laminated photocopy of the laminated original title deeds are considered in
title deed is to be accepted. exceptional cases, such cases should be treated at par
Laminated original documents with lost Title Deeds cases and the process laid down
should also receive a more for the lost Title Deeds should be followed.
cautious approach
Annexure-H-1 Memorandum Annexure-H-1 Memorandum of Understanding with
of Understanding with Panel Panel Advocate
Advocate
The Advocate / Solicitor /Law The Advocate / Solicitor /Law Firm shall within 10 days
Extant Instructions Revised instructions
Firm shall within two working (except in case of Housing Loans) furnish to the Bank
days (excluding the date of the title certificate and search verification report after
pick up) furnish to the Bank receipt of the entire papers in respect of property.
the title certificate and search
verification report after receipt
of the entire papers in respect
of property.
Registration of EM with ROC 12. Registration of EM with ROC / CERSAI
/ CERSAI Particulars of Equitable Mortgage created by
Particulars of Equitable companies/LLPs must be registered with the Registrar of
Mortgage created by Companies within 30 days of their creation as prescribed by
companies must be registered the Companies Act. This should be supported by
with the Registrar of appropriate resolutions of the corporate.
Companies within 30 days of
their creation as prescribed by
the Companies Act.

SOP-Part-II

Safekeeping / handling of Title Deeds – Synopsis of major changes and revised

instructions

Extant instructions Revised instructions

1. Custody of documents
1.1 All title deeds and No change.
mortgage documents held Addition:-
against advances must be kept Title deeds along with related mortgage
in the fire proof cabinet by documents to be kept separately from other
Authorised Official in Single documents.
Custody after being recorded Valuation Report shall not be kept along with
in the miscellaneous securities the title deeds. However, TIR has to be kept
register or in the title deeds along with the Title deeds.
register.
New instructions. 1.5 Operating staff are advised not to deface the
Extant instructions
New instructions.
New instructions.
Returning of original In exceptional circumstances, wherever
documents after the loan is Holders are not present for valid and genuine
repaid in full
Revised instructions
title deeds, write with pen/pencil, punch/pin,
etc. on the original documents to maintain the
sanctity of the title deeds.
2.1 Obtention of Encumbrance Certificate /
online search of CERSAI in case of existing
properties mortgaged (EM) to the Bank
In respect of properties already mortgaged to
the Bank, Encumbrance Certificate (EC) has to
be obtained (in states/UTs where available)
every year at the time of renewal of limits,
irrespective of the exposure. If the account is
reviewed (continuation of limits is permitted),
then also EC has to be obtained invariably.
In states / UTs where issuance of EC is not in
vogue, fresh TIR has to obtained every three
years similar to obtention of Valuation Reports.
However, this is not applicable in case of
Housing Loans / P-segment loans.
2.2 In case of properties already mortgaged
with us and registered under CERSAI, online
search has to be done yearly at the time of
renewal at www.cersai.org.in and report kept
with the relevant documents.
However, this is not applicable in case of
Housing Loans / P-segment loans.
Title
reasons, current and valid Power of Attorney
(POA) should be obtained and kept on record. In no
case, the Title Deeds should be handed over to any
third party, other than the valid POA holder.
Extant instructions Revised instructions
New instructions. 4.5 Henceforth, a letter, would be sent to all the
borrowers/guarantors, who had mortgaged their
properties with the Bank, stating that the
borrower/guarantor has to collect the original
title deeds within 60 days of full and final
payment of Bank’s dues (Loan). In case they do
not collect the original title deeds within the
prescribed time limit, applicable Safe Custody
Charges would be levied. Waiver of these
charges on a case to case basis shall be vested
with the Branch Managers not below Scale-IV
incumbency / AGM (Controller).
New instructions SOP-Part-II

1.2 The envelope / cover containing title Deeds shall be numbered in the following
manner before the same are kept inside the fire proof cabinet:

For BPR outfits

Branch Segmen Yea EM Folio Cabine Docket No (To be
Name t r Register No t No serially numbered and
No entered on the face of
the document)
A B C D E F ABCDEF

For others
Segmen Year EM Folio Cabinet No Docket No (To be serially
t Register No numbered and entered on
No the face of the document)
A B C D E ABCDE