<p>RBI has issued directions to banks to include the disclosure clause in their loan agreement with the builders, pursuant to a recent Bombay High Court order.<br /><br />“While granting finance to specific housing/development projects, banks are advised to stipulate that the builder/developer/company would disclose in the pamphlets/ brochures, the names of the banks to which the property is mortgaged,” RBI said in a notification. A builder would have to publish loan details in advertisements given in newspapers or magazines, and also mention that it has a no-objection certificate from mortgagee banks for sale of the property, it said.<br /><br />“Banks are advised to ensure compliance of the above terms and conditions and funds should not be released unless the builder/developer/company fulfills the above requirements,” the notification added. <br /><br />Working Group’s tenure <br />RBI on Friday also extended the tenure of Working Group to review the Benchmark Prime Lending Rate (BPLR) by one month to end- September 2009. “The Reserve Bank of India has on Friday extended the tenure of the Working Group on Benchmark Prime Lending Rate (BPLR) by one more month, from end-August 2009 to end-September 2009,” RBI said in a release.<br /><br />The RBI had constituted a six-member working group in June to review the benchmark prime lending rate (BPLR) system and suggest a mechanism for pricing floating rate loans, a move that will improve transparency in the way banks set interest rates on housing loans.<br /><br />The working group, chaired by RBI Executive Director Deepak Mohanty, comprises J P Morgan India Chief Economist Jahangir Aziz and Indian Institute of Management Ahmedabad Professor T T Rammohan as members.</p>
<p>RBI has issued directions to banks to include the disclosure clause in their loan agreement with the builders, pursuant to a recent Bombay High Court order.<br /><br />“While granting finance to specific housing/development projects, banks are advised to stipulate that the builder/developer/company would disclose in the pamphlets/ brochures, the names of the banks to which the property is mortgaged,” RBI said in a notification. A builder would have to publish loan details in advertisements given in newspapers or magazines, and also mention that it has a no-objection certificate from mortgagee banks for sale of the property, it said.<br /><br />“Banks are advised to ensure compliance of the above terms and conditions and funds should not be released unless the builder/developer/company fulfills the above requirements,” the notification added. <br /><br />Working Group’s tenure <br />RBI on Friday also extended the tenure of Working Group to review the Benchmark Prime Lending Rate (BPLR) by one month to end- September 2009. “The Reserve Bank of India has on Friday extended the tenure of the Working Group on Benchmark Prime Lending Rate (BPLR) by one more month, from end-August 2009 to end-September 2009,” RBI said in a release.<br /><br />The RBI had constituted a six-member working group in June to review the benchmark prime lending rate (BPLR) system and suggest a mechanism for pricing floating rate loans, a move that will improve transparency in the way banks set interest rates on housing loans.<br /><br />The working group, chaired by RBI Executive Director Deepak Mohanty, comprises J P Morgan India Chief Economist Jahangir Aziz and Indian Institute of Management Ahmedabad Professor T T Rammohan as members.</p>