The State Bank of India (SBI) on January 8th launched a scheme guaranteeing the refund of the principal amount if a builder fails to complete the project within the stipulated time to its home loan customers.
Crux of the Matter
The scheme primarily focusses on the affordable housing segment, with the price of the house up to ₹2.5 cr in seven cities at present
The scheme will be applicable for projects, where the SBI is the sole lender.
This scheme is expected to boost the stressed real estate sector and will give confidence to buyers as well.
SBI has already tied up with Sunteck Realty Ltd and will be expanding it to other builders who fulfil the criteria set by the bank for loans between Rs.50 crore to Rs.400 crore.
Rajnish Kuma SBI Chairman said, “the loans will be at the same rate as its existing home loans and borrowers can seek a refund if the builder fails to meet the deadline under the Real Estate (Regulation and Development) Act.
In December SBI also cut its lending rates by 25 basis points (bps) to 7.8%, lowering borrowing costs for small businesses and homebuyers.
It had also announced a 10bps reduction in its one-year marginal cost of funds-based lending rate (MCLR) to 7.9%.
Curiopedia
The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Real Estate Act makes it mandatory for all commercial and residential real estate projects where the land is over 500 square metres, or eight apartments, to register with the Real Estate Regulatory (RERA) for launching a project, in order to provide greater transparency in project-marketing and execution. The Act prohibits unaccounted money from being pumped into the sector and as of now 70 per cent of the money has to be deposited in bank accounts through cheques is now compulsory. More Info
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