Banks in a tizzy over Gr Noida land quandary

The muddle over real estate projects in Greater Nodia has leftmany banks worried over the fate of loans, running into hundreds of crores ofrupees, committed to home buyers and developers of realty projects.

"This is an extraordinary situation wherein thegovernment-approved projects have been cancelled. We are examining the courtorders," a senior banker said.

Many real estate projects have run into deep trouble as theAllahabad High Court yesterday quashed acquisition of another 600 hectares ofland in two villages in Greater Noida, affecting at least 11 projects and20,000 buyers.

The apex body of real estate players, CREDAI, had said theywould challenge the court order.

The twin development left home buyers, who had booked flatsin the upcoming projects in Greater Noida, in lurch.

Bankers said they are as uncertain as customers. They arestill ascertaining the quantum of loans disbursed to borrowers from variousbranches.

Sources said banks may not have any choice but to invokebank guarantees in case the loans are not repaid.

A major issue before banks is that most of the developersare assuring customers about return of money but no developer is talking aboutfunds sourced from banks, a worried banker said.

In the aftermath of these developments, banks are adopting acautious approach as far as sanctioning loans for projects in Greater Noida areconcerned.

Another banker, however, said although lenders havecommitted a large number of loans, actual disbursement would be minuscule.

In many cases, only the first installment has beendisbursed, said LIC Housing Finance Chief Executive Officer V K Sharma.

"A major area which was under development is at astandstill. Customers are confused and hence we are finding difficulty,"he added.

Customer confidence is shaken, he said, adding, informaltripartite discussion are on among developers, customers and financialinstitution to resolve the situation.

Some of the farmers of Shahberi village of Greater Noidahas already said that they would like to have higher compensation for theirlands instead of taking back their land.

It is to be noted that three more cases are pending beforethe Allahabad High Court pertaining to land acquisition in Greater Noida.