The Delhi High Court on Wednesday asked the Reserve Bank of India (RBI) to file reply on a plea complaining that Central Bank of India, the public sector lender, has disbursed the housing loan without linking it to the stages of construction for a under-construction greenfield housing project.
A Bench of Chief Justice Rajendra Menon and Justice Anup Jairam Bhambhani also asked the public sector bank to file response to a petition by financial economist Abhijit Mishra.
The petitioner told the court the Central Bank of India disbursed housing loan without closely linking it to the stages of construction of the housing project for incomplete housing projects to the builder, “Amrapali Leisure Valley Private Limited” for their greenfield housing project “Amrapali Leisure Valley Verona Height”.
“Such disbursement of housing loan by the Central Bank of India is in complete disregard of the master circular of the RBI,” the petitioner said.
As per the RBI master circular, banks are advised that disbursal of housing loans sanctioned to individuals should be closely linked to the stages of construction of the housing project and houses and upfront disbursal should not be made in cases of incomplete and under-construction greenfield housing projects.
The petitioner also sought the court’s direction to the RBI to audit and investigate the Central Bank of India for default in compliance with the RBI master circular. He also sought direction to the Central Bank of India to absolve the home loan customers from the liability towards loan made by the bank in contravention of the RBI master circular.
It has requested the court to compensate the home loan customers and reverse the adverse credit information about the housing loan customer to the Credit Information Companies.
Mishra said he filed public interest litigation to protect the interest and of innocent home loan customers who have become victim of corporate malice, greed and connivance of the Central Bank of India.