Clipped from: https://timesofindia.indiatimes.com
MUMBAI: In the season of salary cuts and job losses, builders and people who booked flats in their projects now have to deal with another challenge.
Flat buyers whose loans were sanctioned by banks have been asked to resubmit their new salary slips, before fresh disbursement, to prove they are capable of paying their EMIs. Due to salary cuts and large-scale retrenchment across businesses, banks want to ensure that homebuyers can service their loans in future.
A leading Mumbai-based builder said many of his clients have complained that banks have stopped disbursing loans for the past two months. “There are cases where the bank had already released 20% of the home loan of a flat buyer but has now stopped following the lockdown,’’ he said.
Lenders say that their norms require them to ascertain at the time of disbursement whether the borrower is in a position to repay the loan. “If at the time of disbursement, the borrower finds that his income is not enough to pay the monthly instalment, it would be in his interest to exit the transaction. If he subsequently defaults at an early stage of the loan (before he can take possession), he will have neither a home nor the access to credit to buy a cheaper house,” said an official in a private bank.
“Banks are revalidating home loans of their clients because of salary corrections. Further disbursements have been kept on hold. This has affected many builders because banks are delaying payments to them,’’ said Ajay Ashar, Maharrashtra Chamber of Housing Industry (Thane) president. Ashar said he has sold 1,000 under-construction apartments, booked by people who have taken home loans. “We were getting regular payments from the banks but this stopped after the lockdown,’’ he said.
Developer and president of CREDAI-MCHI Nayan Shah, said, “Every home loan of more than Rs 50 lakh is being taken up for re-assessment even when two to three disbursements have already been made. Banks neither want to lend nor want to support the economy. They want us to pay double interest so that they cover up the loss in revenue on the money that they don’t lend and sit on liquidity to park with RBI.’’
A default on a home loan results in a fall in the credit bureau score which makes future borrowing difficult. A spokesperson for HDFC, the largest private home loan lender in the country, said: “It is not something new that we are doing. We do look at the latest income statements as part of our normal appraisal process.’’
Another private sector banker said it has asked clients to resubmit their financial details for loans that were sanctioned pre-lockdown but not disbursed, or for under-construction loans where a substantial portion is yet to be disbursed.
There are also instances where home buyers have asked banks for a three-month moratorium on their EMIs. In such cases, the bank stopped disbursing money. “Once the moratorium’s over, we will be assessing these cases separately,’’ said a private bank official.
State Bank chairman Rajnish Kumar, on the other hand, has said SBI had already applied stringent eligibility criteria in terms of credit score while sanctioning loans. There was therefore no need to be any stricter in disbursing loans, he said. “Most of our borrowers are salaried and we do not see any stress in the home loan portfolio,” Kumar added.
According to RBI data, the home loan book of banks shrunk by Rs 8,255 crore between March 27 and April 24 (when it stood at Rs 13.3 lakh crore). Bankers said that while they are still receiving loan repayments, fresh sanctions have dried up and only some disbursals of loans cleared earlier have taken place during the lockdown.