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Home loans process to go paperless soon

By Rishabh Chamoli | 2022-12-09

Have you ever imagined to follow a paperless process to acquire home loans? If not, then this can become a possibility now. With digitisation, several important documents, such as credit score and borrowers data, have made the system transparent. Further digitalisation of documents could pave way for hundred percent paperless lending for home loans.

A recent communication from Ministry of Electronics and Information Technology has made it possible to digitise new contracts and property documents. The Ministry of Electronics and Information Technology has activated mortgage loans in the category of digital documentation.
Debajyoti Ray Chaudhuri, MD and CEO of National E Governance Services (NESL), recently shared, We are still working on it, but now its a definite possibility. With multiple vendors and vendor agreements, the possibilities are endless.

What are the existing digital processes?
NESL offers complete digital document execution services for banks, enabling electronic contact creation. Contracts of various kinds could be available in Demat format in the future. Bank CEOs can now expect a significant increase in direct or digital lending. Dinesh Khara, Chairman of SBI, shared that the lender has built a large loan portfolio by allowing customers to borrow with a few clicks on Yono, the banks mobile app.

What can all processes be digitised?
Digital title deeds or sale agreements can be maintained as valid land records
The online verification system will make the loans disbursable easier and quicker
The loan recovery suits can also be filed digitally

What is pushing the growth for digitalisation of home loan processes?
In addition to digital documentation, the availability of structured and unstructured data has enabled online lending for banks to use technology to use unstructured data, including data from social media, to create credit profiles.

Online banking is helping to address a banking paradox in which those who pay smaller loans are paying record higher prices due to operational costs. Counterfeiting of bank statements and identity documents has decreased due to digitization. Banks used to monitor the loan portfolio on a monthly basis, but now they can do it anytime, anywhere.

Apart from the other benefits, collections are easy because customers use UPI or online features. At each stage, the ecosystem changes dramatically.