Majority Home Buyers Facing Tough Time in Getting Loans Sanctioned
Buyers pay 3–5% or bribes as banks delay loan approvals
Vijayawada: Home buyers in Andhra Pradesh are facing a tough time in getting loans from banks. As a result, they are going through commission agents, who take their cut before the loans are cleared by bankers.
For purchasing houses, a majority of buyers approach various nationalised banks, where the rate of interest is relatively low. However, to submit their proposals, they have to visit the banks repeatedly, as bank personnel ask them to submit a plethora of documents for sanction of loans. Thus, most home buyers go through commission agents.
Bankers ask for an engineer’s evaluation and legal opinion on the proposed home or flat to be purchased. The buyer has to pay for the service. To avoid this, buyers submit proposals to banks for sanction of home loans through commission agents, who demand a percentage ranging from three to five or above per cent of the total loan amount sanctioned. More the complexities involved in sanction of the loan, more is the cut demanded by agents.
Some bankers allegedly delay sanction of loans on various grounds till the deal for payment of a bribe is settled. Resorting to such fraudulent practices in sanctioning of home loans even led to an employee losing his job. However, he continued to dupe people even after losing his job.
The employee has been identified as Earnest Kumar, who worked with LIC Housing Finance Limited’s sister concern HFL Financial Services Limited. Through commission agents, he collected huge amounts for sanction of loans. He even collected advance money from home buyers for depositing the loan amounts into their bank accounts. He also misappropriated EMIs. This way, he collected from customers several lakhs of rupees, before authorities terminated him from the service.
LIC HFL Financial Services Limited manager Rama Rao said, “We have terminated Earnest Kumar from service after finding that he is involved in fraudulent activities.”
A retired employee of SBI said, “It used to be very tough to get home loans, as bank managers rejected applications on trivial grounds. Conditions for sanction of home loans have been relaxed a bit only now.”
AP CREDAI vice president G. Sai Ram Reddy said, “I have heard about fraudulent practices in sanctioning of home loans. I take up projects with clean titles. I never bribed any banker to get loans. I have got loans as per norms based on the merit of my projects.”
Home buyers are appealing to the RBI to streamline the loan sanctioning procedure, so that customers get loans without approaching commission agents and bribing bank officials.
