While tightening the housing finance process, RBI has issued fresh guidelines to commercial banks on especially dealing with building violations and illegal properties.
Henceforth, an affidavit-cum-undertaking has to be given by the property owner/borrower stating that he/she shall not violate the sanctioned plan and construction will be strictly as per the plan.
Also, it will be the responsibility of the owner to obtain completion certificate within three months of completion of construction. In case this undertaking is not fulfilled, then the bank can recall your loan. Banks has been directed to appoint an architect to monitor if the construction is as per plan or not.

Now, will these guidelines strengthen the process of home loan / construction loan disbursements, or the process will become complicated for the borrower, who will have to run all the time to get the documentation completed. And in Indian context, where corruption is touching heights everywhere, will this process be fruitful in actual?
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  • Our govt. seems to be in a process to strengthen the policies on real estate and real estate investment in India. These directives by RBI are clear indication of that. I think one is bound to follow these steps and affect has started coming forth.
    Although in a country like India, it is little difficult to move ahead maintaining the level of transparancy. But, people violating the policies are surely going to get the effect in future, and recent sealings and demolition of unauthorised structures is a good example to set by the govt. for such people.

    Although, headache of the construction's builder has been increased as he will have to be responsible for completion of all the formalities and documentation and only he will have to suffer in situation of any lackings.