Noida: Loans available easily for illegal properties in Shahberi

NOIDA: Shahberi, where many properties were dubbed illegal by the Greater Noida Authority after nine persons died in a twin building collapse in 2018, has seen more than 30 transactions between realtors and buyers since September.

According to official data, financial agencies have disbursed around Rs 6.4 crore in the past 10 months to people looking for affordable property in Shahberi. These agencies are not public or private banks, which were asked by the Noida administration in August last year to exercise extreme caution while issuing loans for houses in Shahberi.

The issue of illegal buildings in Shahberi came up last year during a meeting convened by the district consultative committee (DCC), which comes under the Reserve Bank of India. At the meeting, banks had been asked against entertaining home loan applications from Shahberi without examining documents thoroughly. Since then, banks have taken a step back.

But several financial agencies have now been found to have issued loans for properties in Shahberi as they do not come under the committee. “I have gone through the list of institutions that have provided funds to property buyers in Shahberi. All of them are housing finance companies. Their representatives do not participate in DCC meetings. But we will sound them out about the problem and ask them to plug the gaps,” said lead district manager and RBI representative in Noida, Ved Ratna.

A total of seven finance companies were found to have disbursed 32 loans worth Rs 6.4 crore since September 10 last year. These agencies are monitored by the National Housing Board (NHB).

“The number of transactions (for properties) has reduced significantly in villages notified under the industrial development authorities since September last year. But we have got a few complaints about transactions in Shahberi. We are going to approach NHB to regulate the financial agencies, which seem to be violating the rulebook while disbursing loans,” Noida district magistrate Suhas LY said.

People who have already invested in Shahberi properties in the past and are awaiting a decision on their legality are miffed at the development. Several buyers have stopped paying EMIs to banks and have moved court against the lenders, pointing out that the disbursement of loans was done in violation of their own master circular as the Greater Noida Authority had declared the real estate projects illegal.

“Close to Rs 1,500 crore has been disbursed by various banks, finance companies and institutions over the past few years as home loans for properties in Shahberi. How did they give us loans if the buildings were illegal? The latest set of registries proves how connected the private developers are as they have managed to secure funds for their buyers despite being warned by the district magistrate,” said Sachin Raghav, who has invested in Shahberi.

Over the years, Shahberi has become the hub of affordable but unauthorised flats. Since the village was notified in 1994, more than 1,450 buildings have come up in the area in an illegal manner and bought by people with loans from financial agencies.