Rapid Fire
Subvention Scheme
- 27 Jul 2024
- 1 min read
Recently, the Supreme Court has provided relief to homebuyers in the National Capital Region (NCR) under the Subvention scheme.
- The Supreme Court has instructed banks not to take coercive action against individuals who have not received possession of their flats.
- Subvention Scheme:
- In real estate, subvention schemes involve a tripartite agreement between the buyer, banker, and developer.
- The buyer pays 5-20% upfront, while the bank loans the rest to the developer.
- The developer pays the loan interest until the buyer takes possession, after which the buyer's EMI starts.
- This scheme boosts sales for developers and delays EMI payments for buyers.
- However, in the present case many builders have defaulted on these payments.
- Subsidy:
- Subsidy is direct financial assistance provided by the government or another entity to reduce the cost of a product or service for the consumer.
- This leads to a decrease in the price of the product or service for the consumer. For example, government subsidies on food grains, fertilizers, or fuel.
Read More: Interest Subvention Scheme
