SBI to refund homebuyers if builder delays project

State Bank of India (SBI) on January 7 announced the Residential Builder Finance with Buyer Guarantee (RBBG) scheme, which will issue a guarantee of completion for select residential projects to its home loan customers, PTI reported.

“This product will improve the confidence of the home buyers and increase the velocity of sales of residential units,” SBI Chairman Rajnish Kumar said.

The scheme which will begin from 10 cities, and include affordable housing projects priced up to Rs 2.50 crore. It also includes RERA registered projects, which once past the RERA deadline would be considered “stuck”.

"We are committing that till the time a project receives an occupation certificate (OC), there will be a guarantee which the bank will offer buyers who take loans from it. This will be a win-win situation for home buyers, builders and the bank," Kumar added.

Explaining the workings, Kumar said: "Suppose a buyer has booked a flat in a project for Rs 2 crore and has paid Rs 1 crore, and if the project gets stuck then we will refund Rs 1 crore. The term of the guaranteed will be linked till OC.”

To begin with, SBI has tied up with Sunteck Realty for its three ongoing projects in Mumbai Metropolitan Region (MMR).

"All reputed builders fulfilling the prescribed criteria by the bank can avail loan between Rs 50 crore to Rs 400 crore," Kumar added.

Commenting on the tie-up, Sunteck's chairman and managing director Kamal Khetan said, "This memorandum of understanding is a win-win for our customers who would get the best value proposition for the best quality homes.