At a time when millennials are not buying real estate and the willing home buyers are a bit cautious because of unnecessary delays in project completion and slowdown in the economy, SBI has offered to refund the buyer’s amount (principal paid by the home buyer) invested in an under-construction project if the builder fails to handover the occupancy certificate within the agreed time period.
After the government announced a Rs 25,000-crore special liquidity fund to help unfinished housing projects, the State Bank of India (SBI) has come out with a unique ‘guarantee’ cover for residential home buyers across ten cities of the country.
SBI’s move is a good sentiment booster as people currently don’t have the confidence to buy houses because of the prevalent volatile economic environment, and the track record of builders delaying projects. The job losses in IT, auto, telecom and many other sectors are also creating an environment of uncertainty in the job market. The bank’s scheme will cover only affordable houses that cost up to Rs 2.5 crore in seven to ten cities to start with. The logic of covering such a high number of homes with a price up to Rs 2.5 crore shows that the scheme would initially be rolled out in top cities. SBI is also providing a loan of Rs 50 crore to Rs 400 crore to reputed builders.
While such a guarantee by the biggest bank in India is a nice move, the success of measures like these comes from their scale.