SC to CBI: Present plan to probe 'nexus' between banks, builders

The matter concerns thousands of homebuyers in NCR, who have alleged that banks sanctioned loans to developers under subvention schemes sans proper due diligence

- Utkarsh Anand

NEW DELHI: The Supreme Court on Tuesday directed the Central Bureau of Investigation (CBI) to submit a proposal within two weeks on how it intends to probe an alleged nexus between banks and real estate developers concerning stalled housing projects under subvention schemes, while observing that such a complicity has created "havoc" for thousands of homebuyers in the National Capital Region (NCR).

A bench of justices Surya Kant and N Kotiswar Singh emphasised that CBI has the necessary expertise and resources to investigate these issues, making it clear that a probe into the systemic failures in the subvention scheme was imperative.

"One thing we are clear about is that we will send the matter to CBI. We want to go to the roots of the problem," it stated.

The matter concerns thousands of homebuyers in Noida, Greater Noida, Gurugram, and other NCR towns, who have alleged that banks sanctioned loans to developers under subvention schemes without proper due diligence. When builders defaulted on their commitments, the financial burden of EMI payments was shifted onto buyers, many of whom are yet to receive possession of their flats.