State Bank of India (SBI) will provide a guarantee of project completion to homebuyers with the objective of pushing up demand for residential units. The scheme also aims to complete housing projects that are stalled.
The Residential Builder Finance with Buyer Guarantee (RBBG) will be for SBI-funded residential projects and those availing home loans from SBI. The guarantee will be available till the project gets an occupation certificate. The fees for such a guarantee will be borne by the developer.
SBI Chairman Rajnish Kumar said the RBBG will focus on the affordable housing segment with home prices of up to Rs 2.5 crore, in 10 cities initially. It may then consider extending this product to other parts of the country.
Under this product, all reputed builders fulfilling the prescribed criteria by the bank can avail of loans of Rs 50-400 crore. The criteria for selecting projects includes star rating and CIBIL score. SBI has signed an agreement with Sunteck Realty for three existing projects in Mumbai Metropolitan Region.
The RBBG will build confidence among homebuyers by securing their hard-earned money and, at the same time, will boost the under-stress real estate sector.
Meanwhile, the bank posted 17 per cent growth in its home loan portfolio for the December quarter. It has maintained its 22 per cent market share in the housing finance market (by banks and housing finance companies) in the country, Kumar said.
The outstanding home loan portfolio had risen to 18.03 per cent year-on-year (YoY) to Rs 4.24 trillion at the end of September. Domestic credit expanded by 8.43 per cent YoY, driven by retail-personal advances (18.9 per cent) in the September quarter.