Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:
- Mr. Manoj Sharma, CEO, Exuberant Systems Pvt Ltd
- Mr. Ravi Virwani, Chief Business Officer. Capital India Home Loans Ltd
- Mr. Dhanender Chandna, Managing Director, Viren Business Solutions Pvt Ltd.
- Mr. Rakesh Watal, Head Liability Operations Western Region, HDFC Bank
- Mr. Narayanan S, General Manager Business Solutions, Associate Director, Principal Consultant, Cognizant
- Mr. Narayan Rao, Chief Services Officer, Suryoday Small Finance Bank
- Mr. Saurabh Sharma, Head-Consumer Banking, India, DOHA Bank
- Mr. Abhishek Arun, Chief Operating Officer, Paytm Payments Bank
- Mr. Maunil Gajjar, former Manager Projects, Aurionpro
- Mr. C V Ramana Rao, Sr Manager, Punjab National Bank
- Mr. Raghu Veer Dendukuri, Founder, Ideal Nation and Solution Architect at Invincible Tech Systems Inc.
- Mr. Fareed Jawad, VP-Product Development, Spreedly
- Mr. Rajkumar S, Manager, Paytm
- Mr. Subbiaa Olimuthu, former Product Manager – RuPay Product
- Mr. Kamonasish Aayush Mazumdar, Founder & CEO at Foodieverse
- Mr. Hemal Shah, former Technical Product Manager, Mastercard
- Mr. Prasad Likhite, Director Sales, ACI Worldwide
- Mr. Dayanand Nalamutt, Product Manager Direct Banking, IndusInd Bank
- Mr. Shreejith Menon, Senior Director, IDFC FIRST Bank
- Mr. Amit Sukhija, Senior VP, AU Small Finance Bank
- Mr. Sharad Goklani, former CTO at Equitas Small Finance Bank
- Mr. Anil Kumar Gupta, Partner, MSC
- Mr. Rakesh Shetty, Product Head Micro Loans, Fortune Credit Capital Ltd
- Mr. Hitesh Thakkar, Fintech Consultant, Self-Service Automation
- Mr. Abhishek Mody, former Associate Director-Payment & Digital Initiatives, IDFC FIRST Bank
- Mr. Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
- Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous
One of the FIAKS community members brings in this point for community discussions – the biggest mis-selling by banks is on Home Loan. The customer is given an impression by the sales team that if the bank is approving a home loan then it means the following:
- Bank will ensure timely completion and possession.
- The builder has all the necessary approvals.
- Property title is clear …etc.
While in reality none of the above responsibility is owned by banks. Banks are offering home loan basis creditworthiness/income of the home buyer. Isn’t it?
- Banks/NBFC’s go for what they generally call as APF-Advance Processing Facility and while approving a project under APF banks do look for and vet all necessary approvals as well as the title of the property. And till the project is complete a TPA is being executed between bank, builder, and customer. T&C of TPA are favorable for customers. But some scrupulous builders do allocate single units to multiple customers and try to dupe both customers as well as banks. Though banks cannot ensure timely completion and possession they do ensure necessary approvals and title. Home loan products vary from bank to bank (NBFC to NBFC) depending upon the risk appetite, wherein banks do ignore some vital documents and yes the customer is the ultimate sufferer.
- Member put forth his understanding of home loan, this is not completely dependent on your credibility (Your credit score may have value here for initial in principal approval only). It is also dependent on the property valuation (The final disbursement is the basis of the property). Banks are risk-free to much extent as either you pay or they sell the property (so it’s a combination of a person’s credentials and property value). By checking most of the prerequisites of the project/builder, involving advocates & surveyors, banks too much extent make sure they are in a safe zone while giving a home loan.
Further following questions were raised;
Question 1: Shouldn’t this perception be corrected by banks by running an awareness program the way it’s done in case of mutual funds selling or insurance selling?
- Banks always give a sanction letter with predefined subjectivity (positive Legal & Technical report). Because at the time of application most of the time property is not identified so the bank gives financial approval.
- Why don’t bank put in bold in the loan application form that, “WE ARE NOT RESPONSIBLE IF BUILDER DOESN’T COMPLETE THE PROJECT. BANK WILL CONTINUE TO RECOVER LOAN AMOUNT EVEN IF CUSTOMER DOES NOT GET THE POSSESSION OF FLAT OR BUILDER FILLES OF BANKRUPTCY “
Question 2: Isn’t this an opportunity for banks to launch a new Home Loan product that assures all the above to its customers?
- Member stated frankly, I heard about pre-launch offers for many gated communities in Hyderabad, and while many of my friends tried taking in them and suggested to me, saying we can get a loan after 1 year, I am thinking how safe and how I can mobilize that much amount and kept away, thinking what I get through loan I will take that only.
- Another member states, SBI did launch – Residential Builder Finance with Buyer Guarantee (RBBG) – however, the scheme saw a tepid response as SBI offered this with very few CAT A builders.
Whilst, on the contrary, another question raised is that not sure why are banks responsible for checking/verifying these? If banks were to really get into ensuring property completion there would hardly be any home loan, it’s like saying, banks should ensure the quality of vehicles in auto loans;
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