SBI offers up to two years repayment relief for home & retail loans – ET RealEstate

MUMBAI: State Bank of India will provide relief to home and retail loan borrowers impacted by Covid-19 in the form of either a moratorium of up to 24 months or by rescheduling instalments and extending the tenure by a period equivalent to the moratorium granted.

The moratorium period can be extended by a maximum of 2 years, India’s largest lender said Monday, setting the tone for other banks, specially PSU players.

In line with RBI’s one-time relief, the scheme is available to borrowers who had availed of a home loan before March 1, 2020 and were regular in repayments until the Covid-19 lockdown.

But the borrowers will have to demonstrate that their income has been hit because of the pandemic.

“For the purpose of restructuring, the bank will depend entirely on the customer’s assessment of when they expect their income to be normalised or to get employed,” said SBI managing director C S Setty said while announcing the scheme.

The country’s largest lender has been the first to roll out a protocol for restructuring loans of retail borrowers who were affected by Covid-19. Other lenders including HDFC and ICICI Bank are expected to follow suit before the end of the month.

To facilitate borrowers to understand their eligibility for restructuring, SBI has launched an online portal to enable borrowers check their eligibility for all retail loans. This includes home, education, auto, and other personal loans.

The restructuring will give breathing space for a borrower until their income is normalised or they get re-employed. Also, they will not be classified as defaulters or non-performing assets. The downside is that the bank will charge 35 basis points extra as interest since the RBI needs them to set aside additional provisions for these loans. This means that despite initial relief over the tenure of the loan, the borrower will end up paying more than on a regular loan without restructuring.
SBI offers up to two years repayment relief for home & retail loans“We have put in place a scheme for restructuring and it is available to borrowers through our internal portal. We have also intimated borrowers but don’t expect much of traction for restructuring given the inquiries,” said Rajkiran Rai, MD & CEO, Union Bank of India.

HDFC Bank has put in place a facility to submit online applications. The bank has said that it will report the loan to the credit bureau as ‘restructured’ and as per norms, all loans availed will be classified as restructured even if only one loan is being restructured.

“The dues for the moratorium period can be capitalised. Or else it will be very strenuous for the borrower to repay. Capitalising the dues will reduce the pressure on the borrower and we are also working on this by elongating the term of the loan,” said Siddhartha Mohanty, MD & CEO, LIC Housing Finance. He added that even if the loan term is extended, typically home loan borrowers end up pre-paying their loans by seven to ten years.

Borrowers who access SBI’s portal for restructuring will still have to visit the branch as a ‘wet signature’ is required for the loan document to be reworked. The portal will however take care of all the queries of the borrower. “It is not an end-to-end process but it will reduce the need for customers to visit branches especially during this time of Covid,” said Setty.



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Chennai: 1,000 buyers in fix as SBI puts clubhouse they paid for on the block – ET RealEstate

CHENNAI: Around 1,000 residents of an apartment complex in Thirumudivakkam in the southern suburbs are in a spot, with State Bank of India putting up a club house on the premises for auction over a mortgage default.

The residents paid Rs 1 lakh-Rs 1.5 lakh each for developing the club house as a common property, but, the fine-print of the agreement with the builder showed the property was owned by him. He later mortgaged it against a loan with the bank which decided to hold the auction on August 28 after he defaulted on payments.

A Moorthy, president of the residents association, said most flat owners were senior citizens who paid a sizeable sum for the ‘Royal Club’. “The builder took funds from us saying it was for construction of the club house, but we did not get ownership. We don’t know what to do now,” said the 62-year-old.

While the builder couldn’t be reached for comment, the association’s complaint to SBI hasn’t got a response. TOI also studied documents related to the case.

P Balaji, counsel for the residents, said the builder, while selling the flats, insisted on payment of membership fee for the club house. “They got an estimate sheet, promising 22sqft to each resident. But, the residents did not check the agreement which clearly mentioned the builder was owner of the clubhouse,” Balaji said.

Now, despite the property being auctioned, the residents can’t claim money from the auctioned sum. “We can only prefer a criminal complaint,” Balaji said.

Legal experts who vetted the documents said the residents could file individual suits for compensation, but that such cases could drag on for years.



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Buyers to move SC after penalty relief for builders in Noida – ET RealEstate

NOIDA: Homebuyers are all set to move the Supreme Court seeking refunds after it recently reduced the penalty imposed on builders by authorities in the twin cities for delayed payment from 20% to 7.3% as per the State Bank of India’s marginal cost of lending (MCLR).

Buyers claim that any money refunded by the authorities of Noida and Greater Noida to the builders should be passed on to them because they have paid all dues to the realtors on time. The Greater Noida Authority says it may now have to refund around Rs 1,000 crore to the city-based developers with respect to the penalties collected as per prior rules since 2010.

Abhishek Kumar, president of Noida Extension Flat Owners Welfare Association (Nefowa), said it would soon file a petition seeking a review of the SC’s July 12 order, on behalf of all homebuyers in the twin cities.

“We have already paid the dues on time to the developers. If they were charged a penalty by the authorities, it is because they have not forwarded the funds collected from investors. Even the penalties are our money, so if they get some relaxation on the same with retrospective effect from 2010, we should get monetary refunds. Just as farmers’ compensation was passed on to the buyers, refunds should be transferred to us,” he told TOI.

Kumar Mihir, a lawyer representing the buyers, said, “The buyers are hard pressed with rent and EMIs and most of them have paid as per the payment plan to the builders, so they now want that benefits extended to the builders be passed on to them.”

Commenting on the order, Narendra Bhooshan, the CEO of GNIDA, said, “By rough estimates, the amount comes to about Rs 1,000 crore. We are studying the order.”

Builders’ body Credai, claimed that though the order will reduce the burden on many developers, enabling them to clear their dues and get completion certificates from Noida and Greater authorities, they have not yet started applying for refunds. “Instead we are working on reconciliation of accounts with the authorities,” said Pankaj Bajaj, president of Credai-NCR.

As per the July 12 order, instead of penal interest that adds up to over 20% in various cases, developers can now pay much lower, and that too for a period of the past 10 years. Currently, SBI MCLR for three-year loans is pegged at 7.3%. However, builders will be required to pay 25% of all dues within three months and all dues need to be cleared within a year, the court ruled, giving the authorities in Noida and Greater Noida one month to settle the fees.



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SBI cuts MCLR by 5-10 bps for shorter tenors – ET RealEstate

MUMBAI: The country’s largest lender State Bank of India (SBI) on Wednesday said it has reduced its marginal cost of funds based lending rate (MCLR) by 5-10 basis points (bps) for shorter tenors from July 10.

The reduction in MCLR for shorter tenors – up to three months – is aimed to boost credit off take and revive demand, according to an SBI statement.

With this revision, the bank’s MCLR up to three months tenor has come down to 6.65 per cent per annum, which is at par with its external benchmark based lending rate (EBLR).

This is the 14th consecutive reduction in the bank’s MCLR, which continues to be the lowest in the market.

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