Now, SBI Home Loans Come With Guarantee Of Refund Of Homebuyers' Money If Project Is Delayed
New Delhi: In first offering of its kind by any bank, State Bank of India (SBI) has come out with Residential Builder Finance with Buyer Guarantee (RBBG) to home loan takers under which they will get refund of their principal amount paid if the real estate company fails to hand over the property within a stipulated time.
RBBG is applicable for those housing projects where SBI is the only lender to the builder of the project. The bank will give loans of Rs 50-400 crore to the builders if they fulfill certain criteria.
RBBG will be available only for affordable housing project where the homes are priced up to Rs 2.5 crore.
“RBBG will build confidence among home buyers by securing their hard-earned money and at the same time will boost under-stress real estate sector,” said SBI Chairman Rajnish Kumar.
The scheme has been rolled put in seven cities initially and the bank has signed a Memorandum of Understanding (MoU) with Mumbai-based developer Sunteck Realty for three of its ongoing projects for this offering. The scheme can be considered for a roll out in other cities in later phases, said Kumar.
“This MoU is a win-win for our customers who would get the best value proposition for the best quality homes,” said Kamal Khetan, CMD, Sunteck Realty Ltd in a statement.
Such a product may lift the sentiments of the residential real estate sector in the country and comes at a time when there is severe trust deficit in the industry on the back of several builders defaulting in completion of projects and some of them even running away with the homebuyers’ money.
“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,” said Anuj Puri, Chairman, ANAROCK Property Consultants.