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Cancel home loan, get EMI refunded for late possession: SBI

The SBI chairman said after a lot of change, demonetisation of RERA & GST, the bank realised this was the way to give homebuyers a timely home

Editorials

In India

The State Bank of India (SBI), the country’s largest state-run bank, has launched a unique scheme to revive the real estate sector, which is reeling under heavy depression. Under this scheme, if the homebuyers are unable to get possession of the house at the scheduled time, then the bank will return the entire principal amount to the customer. This refund scheme will be valid till the builder gets the Occupation Certificate.

Under this scheme called ‘Residential Builder Finance with Buyer Guarantee Scheme’, a home loan from the bank can be available for a house worth a maximum of Rs 2.5 crore. In this, builders who follow the conditions of the bank can also get loans ranging from Rs 50 crore to Rs 400 crore. SBI Chairman Rajneesh Kumar said, “The scheme that we have launched will have a big impact on the real estate sector as well as those landlords who get into trouble due to lack of possession of the house.”

The SBI chairman said, “After a lot of change and demonetisation of RERA, Goods and Services Tax (GST), we realised that this is a great way to give homebuyers a timely home and save their money from getting stuck.”

In the first phase of this scheme, SBI has entered into an agreement with Suntec Developers of Mumbai for three projects. These projects will be made in the Metropolitan Region of Mumbai.

Various efforts are being made to boost the sluggish real estate sector. The central government has created a Rs 25,000-crore Alternative Investment Fund (AIF) to provide relief to developers with unfinished projects.

In December 2019, SBI, Bank of India and private sector HDFC Bank had cut the marginal cost-based interest rate of funds of various duration funds by 0.20%. This will make all types of loans cheap.

SBI, while reducing the marginal cost-based lending rate (MCLR) by 0.10%, had said that now the new one-year rate will be 7.90%. It is now 8%. On the other hand, HDFC Bank sources said that the bank has reduced the MCLR by 0.15%. According to the bank’s website, the MCLR has now come down to 8.15% for a period of one year.

On the same day, Bank of India had cut the MCLR-based interest rate by 0.20% for a day, while by 0.10% over the longer term. The new SBI rates will be applicable from 10 December, while HDFC Bank implemented them from 7 December.

Auto loans linked to MCLR became cheaper. However, its benefits were not available immediately. SBI cut its MCLR for the eighth consecutive time in this financial year. Now its one-year MCLR rate stands reduced from 8 to 7.9%. SBI claims that it is the cheapest loan lending bank in the country.

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