Shares of Sunteck Realty surged 6.2 per cent to Rs 450.15 on the BSE on Thursday after the real estate developer entered into a memorandum of understanding (MoU) with State Bank of India (SBI) to safeguard home buyers financially under Residential Builder Finance with Buyer Guarantee programme.
Under the scheme, SBI will issue guarantee for completion of projects to customers availing SBI Home Loans. The programme -- Residential Builder Finance with Buyer Guarantee (RBBG) -- focuses on house segments with home price of upto Rs. 2.50 crores in seven Indian geographies.
"Under this product, all reputed builders fulfilling the prescribed criteria, including meeting Star rating and CIBIL score, by the bank can avail loan between Rs 50 crores to Rs 400 crores," the company said in a statement. READ HERE
Under the MoU, the state lender would 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". This time-period cut-off is based on the timeline submitted to RERA (Real Estate Regulation and Development Authority), mnaking it an additional cover over and above RERA.
"This product is yet another effort by SBI to make affordable housing conveniently accessible to the individuals with dreams of owning their desired home. Based on the response from both builders and customers, we may consider extending this product to other parts of the country," Rajnish Kumar, chairman, SBI said in a statement.
At 9:44 am, the stock of the realty developer was trading 5 per cent higher at Rs 445 apiece, while SBI was 1.74 per cent higher at Rs 325.4. The public lender had hit a high of Rs 328 (up 2.5 per cent) in the early deals. In comparison, the benchmark S&P BSE Sensex was at 41,224.32 level, up 406 points or 1 per cent.
The MoU follows the government's Rs 25,000 crore stimulus package for the ailing real estate sector announced last year. Under it, the government plans to revive over 1600 stalled housing projects covering 4.58 lakh units.
Announcing the decision, Finance Minister Nirmala Sitharaman had said the government will put in Rs 10,000 crore in this alternative investment fund (AIF) while SBI and LIC would provide Rs 15,000 crore, taking the total size to Rs 25,000 crore.