SBI To Refund Homebuyers’ Deposit If Developers Fail To Complete Project

SBI To Refund Homebuyers’ Deposit If Developers Fail To Complete Project
Dipen Pradhan - 09 January 2020

New Delhi, January 9: In a bid to make affordable housing conveniently accessible to buyers, State Bank of India (SBI) has launched a home buyer finance guarantee scheme under which the lender will refund the principal sum of upto Rs 2.50 crores if the developer fails to complete the project on time.

India’s largest lender confirms that the scheme, titled ‘Residential Builder Finance with Buyer Guarantee (RBBG)’, will be initially implemented in seven India cities, and based on the response from both builders and customers, it may consider extending this product to other parts of the country.

Under the guaranteed scheme, all reputed builders upon fulfilling the prescribed criteria by the bank can avail loan between Rs 50 crore and Rs 400 crore. Rajnish Kumar, Chairperson, SBI believes that RBBG will also boost under-stress real estate sector, while providing assurance to homebuyers opting for loans.

Anuj Puri, Chairman of Anarock Property Consultants opines that SBI’s latest home loan scheme is an extremely good move and positive for the residential real estate sector. “The underlying provision of this scheme is that the bank commits to refund the principal loan amount if a developer fails to complete the project, which will ensure that SBI remains highly selective in its approach and work only with the most reliable and trustworthy developers.”

“To mitigate the risk of having to issue refunds, it will also keep a regular check on the progress of the project and see to it that it is completed on time. This will eventually give major assurance to all homebuyers who will opt for loans under this scheme from the SBI, and help in boosting their confidence. The unique scheme has all the hallmarks of becoming a major success,” Puri adds.