RBI tightens housing project funding norm

RBI tightens housing project funding norm
Business Standard, August 28, 2009, Section II, Page 3

BS Reporter, Mumbai

The Reserve Bank of India (RBI) has extended the terms and conditions for banks to provide funds to housing /development projects following a recent judgment of the Bombay High Court.

As per the revised norm, the terms and conditions on which a loan for a housing project may be sanctioned should include the name of the bank to which the property is mortgaged. The developer should also indicate in their brochures that a no objection certificate/ permission of the mortgagee bank for sale of flats/ property could be furnished to the bank if required. The RBI has also directed that money should not be released by banks unless these terms and conditions were met by the developer.