Curation Team
The Karnataka Home Buyers Forum (KHBF) has appealed to the Reserve Bank of India (RBI) to investigate complaints against nationalised and private banks and take appropriate action to protect home buyers’ interests in the state.
KHBF convener Dhananjaya Padmanabhachar compiled observations on banks and submitted them to the RBI, urging it to issue suitable guidelines to safeguard homebuyers’ interests.
The KHBF pointed out that some banks are not thoroughly verifying project titles and have highlighted irregularities in the approval of certain real estate projects.
“Few banks are releasing the full money to the promoters without following slab-wise payment through Ponzi schemes, and home buyers are forced to pay equal monthly installments (EMIs) without getting the possession of the flats,’’ the KHBF note read.
Padmanabhachar said that some banks are not insisting that the promoters comply with Section 17 of RERA in ensuring the title of the project gets transferred to the registered association of allottees within 3 months of obtaining the Occupancy Certificate. “Many banks in Karnataka are not taking Certificate of Registration, Bye-law registered with the competent authority as proof of association registration, even though it is mandatory as per banking regulations. Because of these irregularities, home buyers are in trouble,” he said.
It is said that a few banks are sanctioning mortgage loans to promoters even after the sale deed has been executed to home buyers. “The banks are not checking the EC (Encumbrance Certificate) and are not doing physical validation before granting hundreds of crores as a mortgage loan. Many banks are not validating whether or not the Occupancy Certificate is issued by the competent authority. Banks also do not bother whether the land khata is transferred to the residents’ association,’’ he said.
Expressing a similar opinion, Ameya Usagaonkar, a home buyer, said the banks are not verifying the credentials of residents’ associations during the opening of bank accounts. “Bank employees will not verify whether or not the residents’ association is registered with the competent authority. The RBI is also keeping quiet on this issue as the money transaction involved by builders and residents’ associations is huge,’’ said Ameya Usagaonkar.
