Banks Withhold Home Loan Disbursement

In the current crisis, due to salary cuts and large-scale retrenchment across businesses, banks want to ensure that homebuyers can service their loans in future. Flat buyers whose loans were sanctioned by banks have been asked to resubmit their new salary slips, before fresh disbursement to prove they are capable of paying their EMIs. There are also instances where home buyers have asked banks for a three-month moratorium on their EMIs. In such cases, the bank stopped disbursing money. “We were getting regular payments from the banks but this stopped after the lockdown”, complained developers. Lenders say that their norms require them to ascertain at the time of disbursement whether the borrower is in a position to repay 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 transaction. “Banks are revalidating home loans of their clients because of salary corrections. Further disbursements have been kept on hold. This has affected many builders because banks are delaying payments to them,’’ said Ajay Ashar, Maharrashtra Chamber of Housing Industry (Thane) president. Developer and president of CREDAI-MCHI Nayan Shah said, “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 cover up the loss in revenue on the money that they don’t lend and sit on liquidity to park with RBI.’’