In a recent development, CREDAI has asked the National Housing Bank to revoke the ban on subvention scheme.
Jaxay Shah, Chairman, CREDAI said that NHB’s decision to ban lending by housing finance companies under subvention scheme was impulsive and should be rolled back to boost sales.
Satish Magar, CREDAI President has demanded that the interest rate on home loan should be lowered to 7.5 percent to boost housing demand. He also demanded that the additional deduction of Rs 1.5 lakh on home loan interest, announced in the Budget, should be provided to all borrowers and not only to the homebuyers whose housing unit is upto Rs. 45 lakh apartment price.
In the last month, the National Housing Board asked the housing finance companies (HFCs) to desist from offering loans under subvention scheme, whereas the real estate developers pay home loan interest on behalf of homebuyers for a certain period.
The National Housing Board issued these directives after receiving several complaints of frauds allegedly committed by certain builders using subvention schemes.
At the national conference NATCON, Jaxay Shah said that the restriction on subvention scheme was an impulsive decision of the government. He also termed this decision as immature and said that it was taken without any consultations with stakeholders. Shah also demanded that the ban on the subvention scheme be withdrawn to offer as it was for the benefit of homebuyers.
Shah said that proper monitoring and regulations of loans disbursed under this scheme should be introduced on the concern raised by NHB after several complaints were received.
The subvention scheme was introduced to boost sales of apartments as the homebuyers did not have to bear house rent and interest on home loan under this scheme.
Pankaj Goel, Secretary, CREDAI said that presently, liquidity crunch is the biggest issue with banks and non-banking financial companies (NBFCs) not lending to developers. He further said that real estate regulators established under RERA should be the first point for redressal of homebuyers’ grievances.
However, the real estate regulators could refer the matter to the National Company Law Tribunal (NCLT) for insolvency process or any courts, if matters remain unresolved, Goel added.
In its circular, NHB had said, Based on a review of the matter, HFCs are advised to desist from offering loan products involving servicing of the loan dues by builders/developers etc. on behalf of the borrowers. The National Housing Boars clearly said that the stipulation related to the subvention scheme would also be effected in cases wherein the HFC is yet to commence disbursements under the sanctioned case.