SBI<\/a>\u2019s latest home loan scheme offering insurance to homebuyers against delivery delay will not only provide more comfort to customers but may also be a shot in the arm for at least a section of the struggling real estate sector. India\u2019s largest PSU bank SBI this week launched a home buyer finance guarantee scheme under which the homebuyers will get the entire principal amount, in refund, if the project is not delivered within the stipulated deadline. However, the scheme may not cover all the projects, as SBI is expected to remain selective, Anuj Puri, Chairman, ANAROCK Property Consultants, told Financial Express Online. The bank will consider only the most reliable and trustworthy builders, Anuj Puri said.<\/p>\n\u201cTo 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,\u201d Anuj Puri said. The maximum price of the home has been fixed up to Rs 2.5 crore for availing loans under the residential builder finance with a buyer guarantee scheme. A loan can also be availed between Rs 50 crore to Rs 400 crore by the builders fulfilling diligence by the SBI.<\/p>\n
\u201cIn a market scenario where home buyer sentiment has been negatively impacted by various factors including the tsunamis of economic reforms, this home loan product comes with the right ingredient: it reflects confidence on part of SBI as a home loan provider as regards time-bound possession in the selected under-construction project. Even when one factors in the aspect of it being valid in just seven cities and only for select projects, I see this as a move aimed at returning customer confidence and trust,\u201d Niranjan Hiranandani, National President, NARDECO said.<\/p>\n
SBI may not cover all the projects under the scheme and cherry-pick only some of the good projects to cut down on risk, a banking analyst told Financial Express Online requesting anonymity. Nevertheless, the scheme looks good to revive investor confidence in the current scenario when the realty sector is seeing a slowdown, he added. Meanwhile, SBI Chairman Rajnish Kumar on Wednesday said that the latest product holds huge implications for the real estate sector and homebuyers, who are consistently stuck with undelivered projects. In December 2019, the SBI slashed the lending rates linked to the RBI<\/a>\u2019s repo rate by 25 bps to 7.8 per cent, bringing down the borrowing costs for small businesses and homebuyers.<\/p>\n
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