SBI Scans Jaypee Infratech, Amrapali Home Loan Exposures in Unfinished Projects

SBI has begun review of loans to buy home in unfinished projects

 

Turning cautious about the two real estate companies facing insolvency proceedings, the State Bank of India, country’s largest lender, has begun review of loans to buy home in unfinished projects by Jaypee Infratech and Amrapali. 

SBI also indicated that as a prudent step, it would prefer to extend loans to buy residences in finished projects.

Rajnish Kumar, Managing Director (National Banking Group) SBI said they are assessing the number of home buyers who have been affected by the beleaguered projects in Jaypee Infratech and Amrapali.  

At present people are paying equated monthly installments (EMIs) and “We are collating the number of such buyers who have taken loans from us,” he said. “We are not saying that we would not give loans for ongoing projects but our advice to home buyers would be to always go for the ready to move in projects. Earlier the returns were high in ongoing projects now it’s not the case,” he added.

Jaypee Infratech is one of the large ticket for bad loans, and banks have referred this to National Company Law Tribunal for insolvency resolution (NCLT).  In June 2017, the Reserve Bank of India had asked banks to take 12 large non-performing assets to NCLT. SBI’s home loan book rose by 13.9 per cent to Rs 2,83,331 crore at end of June 2017. The share of home loans in SBI’s total domestic credit was 17.62 per cent.

Reference - http://www.business-standard.com/article/companies/sbi-scans-jaypee-infratech-amrapali-home-loan-exposures-in-unfinished-projects-117082900037_1.html