RBI, while replying to a question, said: “We keep an eye on such incidents. We do investigate such schemes”.
The Reserve Bank of India (RBI) has admitted that it has received some complaints against banks for giving home loans to ghost buyers. dna investigations reveal that loans to ghost buyers may be a larger problem in the accumulation of non-performing assets (NPAs).
"RBI has received complaints about it (ghost buyers), and is looking into the complaints" says RBI DG, S S Mundra.
Asked if RBI will take action, Mundra said, "We also agree to the issue you raised… We keep an eye on such incidents. We do investigate such schemes. There is a different NHP for housing loan. But if such loans are part of bank profile, we will certainly look into it.’’
According to dna investigations, builders find 'dummy' buyers to apply for bank loans. Once the loans get approved, the dummy or ghost buyers hand over the money to the builders and in turn get 4-6% over the home loan rate as commission. Brokers or financers provide a "batch of buyers" to builders looking for large amounts like Rs 25 - 100 crores.
Brotin Banerjee, CEO and MD, Tata Housing says: “Yes! …can be done by investors on behalf of builders and maybe it's one of the things keeping builders afloat in this market.
"If this kind of practice is in operation then, of course, investigation against such builders should be started”, Rohtas Goel, CMD Omaxe Ltd, added.
DLF’s CEO Rajiv Talwar, however, denied that such ghost buyers exist. “This does not appear to be correct. The cost of money would be too high if you raise the cost of borrowing by 4-6%. Also, home loans are the safest asset portfolio of banks,” he said.
Currently, the real estate market scene is not comfortable, and builders and developers are hungry for money to give a breath to cash flow and businesses for survival They find ways to have cash flow move.
Dr Devinder Gupta MD, Dgs group said, "It is found that builders face a huge fund crunch and they are not able to get cheaper loans either from bank or private lenders. Banks' finance cost to builders is usually 14-18% and private equity funding is about 18-22%. In the gray market, the cost is stupendous, ranging from 30 to 60% depending on builders’ collateral. In most cases, however, banks are no longer giving loans to builders, unless they use unfair means."
The Modus Operandi:
Why it makes sense for a builder to create ghost investors with or without collaboration with banks.
Scenario 1:
Builder loan: For property worth Rs 3 crores, a builder gets finance at 30%, which means the builder will have to pay Rs 90 lakh interest per annum.
Scenario 2: Costumer loan: If a buyer takes home loan for the same property (Rs 3 Crore) he gets finance at 10% and he will have to pay Rs 30 lakh interest per year.
Thus the difference is Rs 60 lakh per year.
If a builder pays 10% down payment on behalf of a buyer, that is, Rs 30 lakh, then gives Rs 30 lakh a year to the buyer and pays Rs 30 lakh interest to the bank. Even then the builder saves Rs 30 lakh per year.
Ten deals like these will end up with the banks handing over Rs 25 crore to the builder, enough to pay salaries and pay interest on his previous loans.
Data from the Finance Ministry shows that the growth in banks' home loan portfolio is higher for premium and expensive houses.
Qubrex’s MD Sanjay Sharma told dna: "The reality may be that instead of thousands of retail customers, the risk is being borne by a few hundred builders and the chances of them defaulting is very high"
Housing loan growth
| |
September 2014 |
September 2015 |
| Priority sector |
9.40% |
4.70% |
| High cost housing loan |
14.90% |
18% |
New launches fall by 13%
| Period |
Housing units |
| H2 - 2014 |
1,50,471 |
| H2 - 2015 |
1,31,445 |
Source: Knight Frank Research
(With inputs from Amol Dethe, Mumbai)
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