The Reserve Bank of India (RBI) has stopped banks from offering home loan products such as the 80:20 or 75:25 schemes that make upfront payment to builders for under construction projects. It has advised them to closely link stages of construction of a housing project with home loan disbursal.
RBI feels such loans pose to be risky to the buyer as well as the lending banks. Buyers run a risk of completion delays in the project once their money has been locked. And under the current financial crunch, banks stand a risk of their funds getting stuck due to delay in construction and the matters getting into a dispute zone where the funds eventually end up being locked for a significant amount of time.
While many developers have not taken this decision very positively and feel this will further aggravate the liquidity crunch and in turn affect the buyers, most lenders are feeling this brings down the risk element for them. Industry goers also feel that this move may lead to price correction in the market.
As a leading developer in the real estate space, SARE Homes understands the implications of this decision but completely respects the RBI guidelines. We have always strived to ensure that our investors and customers feel secured and well invested in us.
While many developers have not taken this decision very positively and feel this will further aggravate the liquidity crunch and in turn affect the buyers, most lenders are feeling this brings down the risk element for them. Industry goers also feel that this move may lead to price correction in the market.
As a leading developer in the real estate space, SARE Homes understands the implications of this decision but completely respects the RBI guidelines. We have always strived to ensure that our investors and customers feel secured and well invested in us.
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