RBI/2006-07/182
DBOD. Dir. BC. No. 43 /08.12.01/2006-07
November 17, 2006
The Chairmen and Managing Directors/
Chief Executive Officers of all Commercial Banks
Dear Sirs
Housing Loans – Orders of the Delhi High Court-
Writ Petition by Kalyan Sanstha Welfare Organisation against
Union of India and Others- Implementation of Directions
Please refer to our Master Circular DBOD.No.DIR.(Exp).BC.04/08.12.01/2006-07
dated July 1, 2006 on Housing Finance.
2. During the hearing in the captioned
Writ Petition, the Hon'ble High Court of Delhi has directed as under:
' We hereby direct that henceforth Banks will
check whether the loan sought for is for authorized structure or an unauthorized
structure and the Banks will obtain an undertaking on an affidavit from the
parties seeking such loans that the building is constructed as per sanctioned
building plans. Banks shall also ensure that the sanctioned building plans are
attached with the undertaking. Let necessary directions be issued in this regard
either by the concerned Ministry of Banking or the Reserve Bank of India'.
3. In this context, the Monitoring Committee
constituted by the Hon'ble High Court of Delhi regarding Unauthorised Construction,
Misuse of Properties and Encroachment on Public Land, has issued the following
directions for immediate compliance by the banks/Financial Institutions:
A. Housing Loan for building construction
i) In cases where the applicant owns
a plot/land and approaches the banks/FIs for a credit facility to construct
a house, a copy of the sanctioned plan by competent authority in the name of
a person applying for such credit facility must be obtained by the Banks/FIs
before sanctioning the home loan.
ii) An affidavit-cum-undertaking must
be obtained from the person applying for such credit facility that he shall
not violate the sanctioned plan, construction shall be strictly as per the sanctioned
plan and it shall be the sole responsibility of the executant to obtain completion
certificate within 3 months of completion of construction, failing which the
bank shall have the power and the authority to recall the entire loan with interest,
costs and other usual bank charges.
iii) An Architect appointed by the bank
must also certify at various stages of construction of building that the construction
of the building is strictly as per sanctioned plan and shall also certify at
a particular point of time that the completion certificate of the building issued
by the competent authority has been obtained.
B. Housing Loan for purchase of constructed
property/built up property
i) In cases where the applicant approaches
the bank/FIs for a credit facility to purchase the built up house/flat, it should
be mandatory for him to declare by way of an affidavit-cum-undertaking that
the built up property has been constructed as per the sanctioned plan and/or
building bye-laws and as far as possible has a completion certificate also.
ii) An Architect appointed by the bank
must also certify before disbursement of the loan that the built up property
is strictly as per sanctioned plan and/or building bye-laws.
C. No loan should be given in respect
of those properties which fall in the category of unauthorized colonies unless
and until they have been regularized and development and other charges paid.
D. No loan should also be given in respect
of properties meant for residential use but which the applicant intends to use
for commercial purposes and declares so while applying for loan.
4. Banks are advised to strictly comply with the above
directions with immediate effect.
Yours faithfully,
(Prashant Saran)
Chief General Manager-in-Charge