Credai against linking of home loans to construction stages
RBI asked banks to link the disbursal of home loans to stages of construction to protect the interests of buyers and contain the fallout of "innovative" housing financing schemes
Sep 04, 2013
Source : The Economic Times

 

MUMBAI: Criticising the Reserve Bank's decision to link disbursal of home loans to stages of construction, real estate apex body Credai said the move will harm developer sentiment and disturb business plans.

RBI today asked banks to link the disbursal of home loans to stages of construction to protect the interests of buyers and contain the fallout of "innovative" housing financing schemes.

It has directed banks that upfront disbursal "should not be made in cases of incomplete/under-construction/ green field housing projects".

Confederation of Real Estate Developers' Associations chairman Lalit Kumar Jain said: "Housing finance institutions or banks normally safeguard their interest while devising such instruments. Abruptly issuing such circulars, advising bank against established practices only harm the sentiment and disrupts business plans. This will create setback for projects, affecting the end consumers."

The notification follows the introduction by some banks of "innovative housing loan schemes" in association with developers or builders, where upfront disbursal of housing loans is made to builders without being linked to the various stages of construction.

Also, under such schemes, the interest/EMI on the housing loan availed of by the individual borrower is serviced by the builder during the construction period. These loan products, the RBI said, are popularly known by names such as 80:20 and 75:25 schemes.

RBI said such home loan products are likely to expose banks and their borrowers to additional risks.

"RBI should have consulted stakeholders before issuing such circulars on disbanding current practices. In the past, the RBI circulars have resulted in reversal of good market sentiments affecting economy and concerning housing sector," he added.

 

Latest Realty News

AMC plans to build 10,000 additional houses
Sep 03, 2013
AHMADABAD: Urban local bodies across the state are now demanding faster turn-key systems and construction technologies to deliver affordable houses in bulk and in a time-bound manner over the next five years. A seminar on ‘New Construction technology for affodacle housing‘ was organized at the Ahmedabad Management Association (AMA). The seminar was hosted by Ahmedabad Municipal Corporation (AMC).
Govt reaches out to airport operators for highrises in Bangalore’s CBD
Sep 03, 2013
BANGALORE: In a bid to make Namma Bengaluru mirror the highrise culture of a Shanghai or Singapore, the state government is seeking the cooperation of Hindustan Aeronautics Limited (HAL), the operators of the city’s old HAL airport, to allow builders to go vertical. Situated in the heart of Bangalore, HAL airport issues no-objection certificates (NOCs) on height limits to developments situated approximately in a 5-kilometre radius around the airport. Until 2010, the Airports Authority of India w
New land bill may hit infra projects in Maharashtra
Sep 03, 2013
MUMBAI:Many infrastructure projects and development may come to a standstill in the state with the Lok Sabha clearing the Land Acquisition, Rehabilitation and Resettlement Bill, 2011.
Delhi Master Plan-2021 will unlock a new wave of urbanization
Sep 03, 2013
DELHI: Delhi may soon see a flurry of real estate activities. A path-breaking policy, which has been incorporated in Delhi Master Plan-2021, will make available around 21,000 hectares of land for residential purposes and around 2,073 hectare for commercial activities in the periphery of the existing city.
BDA day: CM lays stones for housing projects
Sep 03, 2013
BHUBANESWAR: In the occasion of Bhubaneswar Development Authority (BDA) Divas on Sunday, Chief Minister Naveen Patnaik laid foundation stones for three big-budget housing projects worth Rs 238 crore for the economically weaker sections (EWS) at different locations on the city outskirts.
Slowdown in real estate forces builders to cut prices
Sep 03, 2013
DELHI: There are no takers for close to 6 lakh homes in the country, forcing builders to cut prices and dole out freebies, which many hope will herald the much-awaited correction in the home market ahead of the festival season.
Seer Acquisitions global consultants unveils its India operation with Seer Realty
Sep 03, 2013
DELHI: One of the prominent boutique property investment consultancy firms in and around London ‘Seer Acquisitions’ unveils its India Operation with -“Seer Realty” today at Dome Hall, Vivanta by Taj Ambassador.
Land Bill to hit project timelines, hike cost estimates
Sep 03, 2013
DELHI: Rating agency Crisil on August 30 said Land Acquisition Bill, which was passed by Lok Sabha , will lead to an increase in the gestation time of projects and overall costs.
Paras Buildtech launches a new mixed-use project ‘Paras Square’
Sep 03, 2013
DELHI: After the successful execution of various magnificent projects in residential, retail and commercial segments, Paras Buildtech has now launched its landmark project ‘Paras Square’ today. This project is a mix of Studio Apartments, Retail and Commercial, located at Sector 63A, adjacent to Golf Course Extension Road in Gurgaon.
Land bill ignores urban concerns: Activists
Sep 03, 2013
PUNE: The land acquisition bill, passed in the Lok Sabha on August 29, has civic activists and urban planners raising concerns about it being rural-centric. They say the government has completely ignored urban land acquisition and infrastructure development concerns.

Latest Realty News Of State

Realty Talk's