Loan
tarun
(Querist) 02 October 2012
This query is : Resolved
What is the drawback if property is situated in unregistered area? and Why banks don't give loan on such property?
If Possible,Kindly respond with relevant Section and Name of Law.
With warm regards and Thanks
Sudhir Kumar, Advocate
(Expert) 02 October 2012
The query is not understood.
Banks do not give loan which is in their opinion unsecured. However Govt banks cannot be grossly arbitrary but still they have discretion to decide viability of loan.
R.K Nanda
(Expert) 02 October 2012
vague query.
malipeddi jaggarao
(Expert) 04 October 2012
What do you mean by "property is situated in unregistered area"?
There are no sections or case laws relating to genuine refusal of the banks to give loans. They will assess the request in different angles for example : Person, Purpose, Potential, Income Generation, Repayment Capacity, Primary and Collateral Securities etc
prabhakar singh
(Expert) 04 October 2012
IF YOUR EXPRESSION " property is situated in unregistered area"means that land is in an area which is regulated by some development authority or master plan authority after whose notification a ban on registry has been imposed BANKS ARE RIGHT IN REFUSING TO GRANT LOAN ON SUCH A PROPERTY AS THE SECURITY IS NOT MARKETABLE AND THEY CAN NOT ENFORCE THEIR RIGHT IN CASES OF DEFAULT.IT IS SIMPLE.NO SPECIAL LAW ANY ONE NEED TO UNDERSTAND IT.

Guest
(Expert) 04 October 2012
Unregistered or unapproved area?
If the are is not approved for residential or commercial purposes by the Government, the building plan cannot be approved by the municipal corporation. Banks allow loans only on lands where the area is approved, building plans can be approved and there is no danger of acquisition by Government or demolition of buildings by the civic bodies/ Government.
Hope that satisfies your query.
tarun
(Querist) 04 October 2012
Thanks to all for responding .
yes My Mistake I should use "Unapproved area by Municipal Corporation" instead of "Unregistered Area".
Mr. Dhingra , Can you tell us that why bank don't give loan on unapproved land.
Because Infact it is a Property having value, Although not equal to approved land.
In Nutshell, what is the drawback of unapproved Area, if i am not going to construct any superstructure on it.

Guest
(Expert) 04 October 2012
Dear Tarun,
Had you read my reply with due attention, you could hve found the answers in lines 4-5 of my reply.
Just think, if the building is demolished or land is acquired by Government, who would repay the loan to the bank?
Sudhir Kumar, Advocate
(Expert) 05 October 2012
Banks have to examine securability of the loan.
Your queyr is less legal more financial.
tarun
(Querist) 07 October 2012
Thanks a Lot for such a valuable Guidance.

Guest
(Expert) 07 October 2012
You are welcome.