alexa

Search in Indianmoney's WealthPedia

Home Articles Why SBI RBBG Scheme Benefits Few People?

Why SBI RBBG Scheme Benefits Few People?

IndianMoney.com Research Team | Posted On Wednesday, January 22,2020, 12:38 PM

5.0 / 5 based on 1 User Reviews

Why SBI RBBG Scheme Benefits Few People?

 

 

The State Bank of India had introduced the Residential Builder Finance with Buyer Guarantee Scheme or RBBG Scheme to protect home buyers against non-completion of projects. This is a big problem for the real estate industry in India. If you are buying a house and are not sure of getting it, why would you put hard earned money in a house? To solve this problem, SBI launched the RBBG Scheme.

SBI launched the Residential Builder Finance with Buyer Guarantee Scheme to issue a guarantee on the completion of select residential projects for SBI Home Loan customers. The RBBG Scheme would be launched in 10 cities and include only affordable housing projects which are priced up to Rs 2.5 Crores. Even if it’s a RERA registered project, once past the RERA deadline, it’s considered stuck. SBI offers the guarantee till the project gets the occupancy certificate (OC) if you avail an SBI Home Loan. This promises to be a win-win for buyers, builders and the bank. Sadly, the RBBG Scheme has its share of flaws and let’s take a look at some of them.

Want to know more on Tax Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

Why SBI RBBG Scheme Benefits Few People? 

Existing Home Buyers Can’t Use RBBG Scheme:

If you have already availed an SBI Home Loan then you cannot get the benefits of SBI RBBG Scheme. If your project is not associated with the bank, you can’t get the benefits of SBI RBBG Scheme. There are other problems like builders risk, project quality and so on.

See Also: What are the Steps Involved in Tax Planning?

SBI RBBG Scheme Will Be Launched Only in 7 Cities

The SBI RBBG Scheme doesn’t apply to all the real estate projects which are financed by SBI. You get to choose projects only in SBI approved projects at 7 cities. These cities are Hyderabad, Bengaluru, Pune, Kolkata, NCR, Mumbai Metropolitan Region and Chennai. The scheme is available only at select branches of the SBI at its Corporate Client Group (CCG).

There’s Just a Single Project

The SBI RTTG Scheme currently has just one developer on board. This is the Sunteck Realty pilot project. (A Mumbai-based real estate development Company). So to get the benefits of SBI RTTG Scheme you would have to get a SBI approved project in just 7 cities and currently there’s just one project.

SBI RBBG Scheme Only for SBI-Approved Under-Construction Projects

The SBI RBBG Scheme is only for under-construction housing projects. The entire project must be financed by the State Bank of India. You don’t get the SBI RBBG benefit on buying projects financed by multiple lenders. So, you don’t get the benefit of SBI RBBG Scheme even for the SBI-approved projects in these 7 cities, if the project is only partially financed by SBI.

See Also: Last Minute Tax Planning: What You Should Do?

SBI RBBG Scheme Only for Refund of Loan Principal Not for Interest

Buying an apartment entails charges like stamp duty, registration fees, down-payment, GST and interest availed on home loans. The SBI RBBG scheme comes into play only if the project gets stuck. SBI only provides the principal amounts you have paid and not the other charges. You also don’t get home loan interest refunded. You also have a 6-month grace period till the guarantee clause kicks into action. You would have to continue paying home loan interest till this time. (This is for the grace period till the completion date).

See Also: Tax Exemptions To Invest Wisely

Take a Look at Project Delay Clause Under SBI RBBG Scheme

Before you sign the final agreement when buying the flat, understand the Project Delay Clause. Take a look at the compensation the builder has agreed to pay. The penalty on delay would be less than home loan interest payable. You would have to pay home loan interest and the penalty the builder pays would not be enough to meet this expense. If you are paying pre-EMI on under-construction apartment and construction gets delayed, the bank could convert pre-EMI to EMIs, increasing the home loan burden.

You May Also Watch

Iframe Content

Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.

Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.

Be Wise, Get Rich

What is your Credit Score? Get FREE Credit Score in 1 Minute!

Get Start Now!
CIBIL Meter
Get It now!
Attention!

This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.