The Reserve Banktoday asked banks to bring in a disclosure clause under which commercial real estate players will also have to mention in their advertisements the name of the bank to which a property has been mortgaged. “On a review, it has been decided that the provisions contained therein (relating to disclosures) will be applicable to commercial real estate also,” the central bank said today.Earlier, the central bank has made it mandatory for banks to inculcate the provisions relating to disclosure of a mortgage property in advertisements for ‘private builders’ at the time of inviting public to buy flats or a property. Currently, a builder or a developer or a company has to disclose in their advertisements like pamphlets or brochures the name of the bank to which the property is mortgaged. With this notification, commercial realty will also come under the ambit of such disclosures.
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RBI/2011-12/245
DBOD.BP.BC.No. 45 /08.12.015/2011-12
November 3, 2011
All Scheduled Commercial Banks
(excluding RRBs )
Dear Sir,
Guidelines on Commercial Real Estate (CRE)
Please refer to the circular DBOD.No.Dir.(Hsg).BC.31/08.12.001/2009-10 dated August 27, 2009 on ‘Finance for Housing Projects’. Banks were advised, inter-alia, to stipulate a clause, in the terms and conditions of granting finance to specific housing/development projects, regarding disclosure of mortgage of property to the bank in the Pamphlets / Brochures/ Advertisements etc., which may be published by developer/owner inviting public at large to purchase flats and properties.
2. On a review, it has been decided that the provisions contained therein will be, mutatis-mutandis, applicable to Commercial Real Estate also.
Yours faithfully,
(Deepak Singhal)
Chief General Manager-in-Charge
