Country’s largest lender State Bank of India will provide guarantee to home buyers for project completion to push demand for residential units. Thw scheme also aims to complete stalled housing projects.
This cover – Residential Builder Finance with Buyer Guarantee (RBBG) – will apply to SBI-funded residential projects and those availing home loans from SBI. The guarantee will be available till a project gets Occupation Certificate. The fees for such guarantee will be borne by developer.
SBI chairman Rajnish Kumar said RBBG would focus on affordable housing segment with home price of upto Rs 2.50 crores in 10 Indian cities initially. The bank may consider extending the cover to other parts of the country.
Under this guarantee, all reputed builders fulfilling the criteria prescribed by the bank can avail loans of Rs 50 crore to Rs 400 crore. The criteria for selecting projects includes Star rating and CIBIL score. SBI has signed agreement with Sunteck Realty for three existing projects in the Mumbai Metropolitan Region (MMR) for such cover.
RBBG will build confidence among home buyers by securing their hard-earned money and at the same time will boost the stressed real estate sector.
Meanwhile, the bank posted 17 per cent growth in home loan portfolio in 12 months ended December 2019. SBI maintained it’s market share of 22 per cent in housing finance ( by banks and housing finance companies) market in the country, Kumar said.
The outstanding home loan portfolio of the bank rose by 18.03 per cent ( year-on-year basis) to Rs 4.24 trillion at the end of September, 2019. The domestic Credit expanded by 8.43 per cent (y-o-y), mainly driven by Retail-Personal Advances (18.90 per cent) in September 2019.