Subvention Scheme: Greater Noida, Yeida give details to CBI for probe

The apex court had directed the CBI to undertake a probe to unearth a possible nexus between builders and banks in sanctioning amounts under the scheme

The Noida, Greater Noida, and Yamuna Expressway authorities have begun preparing and handing over documents to the Central Bureau of Investigation (CBI) in connection with a Supreme Court-ordered probe into alleged collusion between real estate developers and banks in so-called subvention schemes.

Following the apex court’s directive, the authorities have identified 24 housing projects—11 in Greater Noida, nine in Noida, and four in Yamuna City—that are under scrutiny. (Sunil Ghosh/HT archives)

The apex court, on April 29, directed the CBI to undertake a probe to unearth a possible nexus between builders and banks in sanctioning huge amounts under the scheme without following any due diligence.

Following the apex court’s directive, the authorities have identified 24 housing projects—11 in Greater Noida, nine in Noida, and four in Yamuna City—that are under scrutiny.

These schemes were initially promoted by builders, promising to pay EMIs on home loans until possession was handed over. But many builders defaulted, and the projects were either stalled or abandoned, leaving buyers saddled with debt and no homes. The court’s intervention came after receiving over 170 petitions from more than 1,200 homebuyers across the country.

Subvention schemes involve a tripartite agreement between the buyer, banker, and developer. Under these, buyers typically pay between 5% and 20% up-front, while the bank loans the rest to the developer in instalments. The developer pays the interest on a loan for a certain fixed period, usually two to four years, until the buyer takes possession. The buyer starts paying back the loan in equated monthly instalments after this.

In Greater Noida, the authority’s additional CEO Saumya Srivastava said they have submitted records for 11 projects, including Supertech’s Ecovillage 2 and 3, AVJ Heights, Earthcon, and Future World. “We will continue to support the CBI in the probe,” he said.

The Noida authority, meanwhile, is yet to provide its documentation. CEO Lokesh M said they have received a request from the CBI and appointed a nodal officer, but will submit files once formally asked. Projects under the scanner in Noida include Supertech Capetown, Blossom Zest, Mahagun Mezzaria, and Jaypee Green Orchard.

The CBI has asked the authorities for comprehensive records—land allotments, lease deeds, approved building plans, payment histories, and official correspondence with developers. The court-mandated probe follows allegations that banks sanctioned full loans without due diligence, violating Reserve Bank of India and National Housing Bank norms. Buyers say banks are now pursuing them for recovery despite incomplete construction.

“The sad part is that the banks are taking action against innocent buyers. The builders misused the funds, and the buyers are suffering,” said Arun Kumar, a buyer from Supertech Capetown.

The Supreme Court has also approved seven preliminary enquiries—one specific to Supertech, five regional (covering Noida, Greater Noida, Yamuna City, Gurugram, and Ghaziabad), and one for other metro cities. The court has ordered the appointment of nodal officers from the RBI, state RERAs, and housing ministries, and deputation of police officers from UP and Haryana. Three chartered accountants will assist with forensic audits.