The Central Bureau of Investigation (CBI) has registered 22 new cases in the already ongoing investigation into nexus between banks and builders.
The homebuyers have been completely devastated. They are forced to repay loan and have not yet received their property from builder.
The investigation was started on the orders of the Supreme Court of India. Several home buyers reported that a big Nexus is ongoing between banks and builders. Banks are crediting the loan amount directly to builders.
Thousands of homebuyers had filed petitions, claiming that banks were forcing them to pay EMIs despite long delays in project completion. Many buyers had booked flats under subvention schemes, where banks directly disbursed the loan amount to builders, and the builders were responsible for paying the EMIs until possession. However, when builders defaulted, banks started demanding payments from homebuyers, citing the Tripartite Agreement.
What is subvention scheme?
In a subvention scheme, there is an agreement between the buyer, bank, and developer. The buyer pays a small upfront amount, usually 5–20%, while the bank provides the remaining loan amount directly to the developer.
For a fixed period, typically two to four years or until possession, the developer pays the interest on the loan. After the property is handed over, the buyer then starts repaying the loan through regular EMIs.
Raids by CBI and Proceedings
CBI conducted raids at 77 locations in eight states on Tuesday. CBI has, so far, registered a total of 50 cases in the matter. Last year, 28 cases were filed against various real estate companies and financial institutions.
Based on the 28 FIRs registered by the CBI last year, the Enforcement Directorate had also initiated a parallel money laundering probe into the matter and is now likely to take up the fresh 22 cases as well.
People invested their hard-earned money, but poor homebuyers have been taken to ransom. Supreme Court had ordered to form an SIT to investigate the case.
In July 2023, the Supreme Court had ruled in favor of homebuyers, directing that banks and builders could not take coercive action against them regarding EMI payments. It also prohibited legal action against them in cases of cheque bounces related to these loans.
