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Real estate industry

State Bank of India to Avoid Financing Real Estate Projects in Disputed Land Areas

Strategic Insights

— 1 min read

The State Bank of India (SBI) has decided to take a cautious approach in lending to real estate projects that are mired in disputes over land acquisition, following a recent Supreme Court ruling that asked the Uttar Pradesh government to return land acquired for realty projects. The decision was announced by SBI chairman Pratip Chaudhuri, who stated that the bank will not finance projects in areas where there are difficulties in acquiring land. This move comes in the wake of a rise in disputes over land acquisition, with farmers across the country, including in West Bengal and Orissa, protesting the acquisition of their land for industrial purposes.

Key Takeaways:

  • The State Bank of India (SBI) has announced that it will not finance real estate projects in areas where there are disputes over land acquisition, following a Supreme Court ruling in Uttar Pradesh.
  • SBI chairman Pratip Chaudhuri stated that the bank will not finance projects in areas where land acquisition is difficult, citing the need for due diligence in the commercial real estate sector.
  • The Reserve Bank of India (RBI) has also asked banks to be cautious when extending loans to commercial real estate projects, due to increasing bad assets and high interest rates.
  • Land acquisition has become a major issue across the country, with farmers protesting the acquisition of their land for industrial purposes.
  • About 6,000 people who booked flats in residential complexes in Greater Noida will be affected by the Supreme Court's order, but an apex body of realtors has assured that affected flat owners will either be moved into other projects or their money will be returned.

Statistics:

  • 6,000 people affected by the Supreme Court's order in Greater Noida.
  • The Supreme Court ordered the Uttar Pradesh government to return land acquired for realty projects.
  • The number of disputes over land acquisition has been steadily rising across the country.

Sources:

  • Asia Pulse, "State Bank of India to avoid financing real estate projects in disputed land areas", July 11.
  • PTI, "SC order to affect 6,000 flat owners in Greater Noida", July 11.

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