Coronavirus Impact: Homebuyers, builders in tizzy as banks reassess loans amid salary cuts and job losses
New Delhi | Jagran Business Desk: At a time when the coronavirus pandemic has brought the economy to a virtual standstill and people suffering from salary cuts and job losses, home buyers who have booked flats are set to face another challenge.
According to a Times of India report, flat buyers whose loans were approved by the banks have been asked to resubmit their new salary slips to prove that they are capable of paying their loan installments.
Amid salary cuts and companies laying off employees at large scales, banks want to ensure before fresh disbursement that homebuyers can repay their loan EMIs in future.
The development doesn’t come as a challenge for flat buyers, but builders too. The report quoted a Mumbai-based builder saying that many of his clients had complained that banks have stopped disbursing loans for the past two months.
On the other hand, banks said that as per regulations, they need to ascertain at the time of disbursement whether the borrower is capable of repaying 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 transactiin. If he subsequently defaults at an early stage of the loan (before he can take possession of the flat), he will neither have a home nor the access to credit to buy a cheaper house,” a private bank official was quoted by Times of India as saying.
The report further quoted Maharashtra Chamber of Housing Industry (Thane) president Ajay Ashar saying that banks were revalidating home loans because of salary corrections. He added that this was affecting several builders as banks were delaying payments.
“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 can cover up the loss in revenue on the money that they don’t lend and sit on liquidity to park with RBI,” Nayan Shah, development and president of CREDAI-MCHI told Times of India.
Posted By: Abhinav Gupta