Maradu flat demolition: Rs 200 cr liability for banks

Kochi: Banks and housing loan enterprises have been facing a threat of bad debt following the demolition of the four flat complexes over the violation of Coastal Regulation Zone rules. It is learned that banks and housing loan enterprises will have a liability of Rs 200 crore.

The four flat complexes houses 345 apartments. Among these apartments, about 310 have availed housing loan ranging from Rs 40 lakh to Rs 80 lakh. As the flats which were pledged to take the loan were demolished, banks are worried about the recovery of these loans.

Though the flats were demolished, people who took housing loan would not be able to walk away from its responsibility. Banks asserted that every flat owner is liable to repay the loan. Hence, banks are planning to withhold the compensation amount transferred to the bank account of the flat owners. If a person fails to repay the loan, it will affect his or her credit score and such people would not be able to take any bank loan in future.

Most of the leading banks and housing loan enterprises have given loan to the people who were residing in the four illegal flats. They purchased the flat by taking housing loan as there were no legal issues. At the same time, it is not clear how the banks sanctioned loans to purchase the flats which were illegally constructed.

One-time settlement to clear debt

One-time settlement is the only solution for the people to settle the loan in banks. If the people who took housing loan do not own any other property, they can inform the matter to the bank and clear the loan through one-time settlement. Under this facility, there is no need to settle the whole amount. Banks will be ready to settle the loan through one-time settlement as the flats no more exist. But it will affect the credit score of the customers.

At the same time, people are asking that why should they take the liability of the housing loan after losing the house.