SBI launches a scheme where it shall be safeguarding home buyers. The underlying provision of this scheme – that the bank commits to refund the principal loan amount if a developer fails to complete the project.
By Varun Singh
Now India’s leading bank State Bank of India (SBI) shall be safeguarding home buyers financially. The bank has come up with a scheme named Residential Builder Finance with Buyer Guarantee (RBBG). Where the bank shall guarantee safeguards for completion of projects to customers availing SBI Home Loans. Housing experts says 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.
Home buyers will be able to secure their investment in the ongoing home projects financed by the bank itself. RBBG will focus on affordable housing segment with home price of upto Rs. 2.50 crores in seven Indian geographies initially. Under this product, all reputed builders fulfilling the prescribed criteria by the bank can avail loan between Rs. 50 crores to Rs. 400 crores. Criteria includes Star rating and CIBIL score.
Rajnish Kumar, Chairman, SBI said, “We believe that 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. This product is yet another effort by SBI to make affordable housing conveniently accessible to the individuals with dreams of owning their desired home. Based on the response from both builders and customers, we may consider extending this product to other parts of the country.”
Realty experts have hailed this scheme.
Anuj Puri, Chairman – ANAROCK Property Consultants says, “SBI’s scheme is an extremely good move and positive for the residential real estate sector as a whole. It will certainly help attract homebuyers. The underlying provision of this scheme – that the bank commits to refund the principal loan amount if a developer fails to complete the project – 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.
“The scheme can be availed for projects where the maximum home price is up to INR 2.5 crore, and this will ensure that a large number of projects across all budget segments will get covered under it,” says Puri.
Developers Happy Too
State Bank of India (SBI) has already entered into Memorandum of Understanding with Sunteck Realty Limited (SRL) under the Bank’s “Sapna Aapka – Bharosa SBI Ka” scheme with Bank Guarantee to Home Buyers under the Builder Finance scheme.
Kamal Khetan, CMD, Sunteck Realty Ltd. said, “We are humbled to be the first partner of the biggest bank of India. This is an endorsement of our strong brand and product offerings, our track record of timely delivery, our pristine balance sheet and adherence to compliance. This MoU is a win-win for our customers who would get the best value proposition for the best quality homes.”
Launched with a tag line “Sapna Aapka Bharosa SBI Ka”, Residential Builder Finance with Buyer Guarantee will offer home buyers to choose their dream home from SBI approved projects in 10 cities with complete trust and transparency.