It's investment time again. But of a different kind, courtesy Akrama-Sakrama, the building regularization scheme being rolled out by
the government. More than 3 lakh property owners in Bangalore alone will now have to plan their investment better to get a clean chit for their properties.

The penalty rates, which run into thousands and lakhs of rupees, will definitely pinch the pockets of the middle class. And civic authorities have devised a module to meet this expenditure -- a bank loan.

The BBMP has tied up with some nationalized banks to fund the regularization penalty amount with the same property as guarantee. The arrangement is such that banks, after processing documents, will present a cheque directly to BBMP for the amount. If regularization is rejected for that property, the cheque will be returned to the bank. This is to ensure that the money doesn't get misused. The rate of interest is as per the prevailing home loan interest.

WIN-WIN SITUATION

"It's a win-win situation for both banks and property owners. It's also good business for banks as a majority of people will apply for the loan. And for owners, the loan will not be a big burden. Also, the same customers may get back to the bank for home loans in future when they construct after the regularization," said an official who is involved in the process.

In fact, the last time when Sakrama was announced and BBMP started collecting applications, many owners had availed of this loan. But BBMP stopped the process midway when the scheme was deferred by the new BJP government. After realizing that the notification of rules would get delayed, BBMP passed a resolution to refund the money.

Applicants had also complained that they had borrowed money at high interest rates through personal loans to pay the penalty amount. Since the regularization was delayed, it caused heavy financial losses. Considering their request, the then BBMP commissioner S Subramanya decided to refund the fees to those who sought it. 
Source: Times of India