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In new scheme, SBI offers to refund home loan borrowers if builder delays project
If builders fail to finish a project within the deadline, SBI will refund the entire principal amount paid to the developer. The new scheme is expected to boost the real estate sector in India.
State Bank of India (SBI) has launched a scheme for homebuyers under which the country’s largest public lender is offering guarantee scheme of completion of a residential project within a deadline.
If builders fail to finish a project within the deadline, SBI will refund the entire principal amount paid to the developer. The new scheme is expected to boost the real estate sector in India.
The ‘Residential Builder Finance with Buyer Guarantee’ scheme by the SBI will be applicable for real estate projects where the maximum home price is up to Rs 2.5 crore.
The scheme will be applicable for only those housing projects that are solely being funded by SBI and where the homebuyers have taken loan from the lender.
Under the scheme, reputed real estate builders or developers meeting the criteria, including CIBIL score and star ratings, can avail a loan from Rs 50 crore to Rs 400 crore.
Chairman of SBI Rajnish Kumar said the lender has come to an arrangement with select builders. “SBI is committing that till OC (occupation certificate) is given, there will be a guarantee, which will be offered to the buyers who take home loans from SBI,” Kumar said.
The scheme will also provide a financial shield to homebuyers whose money gets stuck in the projects that are stalled. The issue has been pertinent in the real estate sector lately as the developers are often exposed to liquidity crunch.
Initially, the scheme will be rolled out in seven cities and will be later unveiled to a total of 10 places.
Under the scheme, SBI has signed its maiden agreement with Mumbai-based Sunteck Realty Ltd for three projects to be constructed in the Mumbai Metropolitan Region (MMR).
SBI had recently lowered home loans rates, the first time the rates have gone below 8 per cent. The bank offered homebuyers loans at an interest rate starting from 7.9 per cent from the earlier 8.15 per cent.
