Banks have also stopped payment of further installments of buyers whose home loans were sanctioned in the past. Though banks like HDFC have agreed to accept home loan applications for some projects, it is only on the condition that the buyers furnish an indemnity bond. The bonds should state that in case government clearances do not come, the responsibility of paying back lies with the buyer. But with no stake of the builders concerned, buyers are not coming forward to sign the bonds.

Rajeev Sardana, General Manager, HDFC (Punjab, Haryana and Himachal Pradesh), said the bank was disbursing instalments of a very few buyers.

“These buyers have already paid the booking amount or a chunk of the cost of the property purchased. However, the bank is doing it where builders such as ATS, which has big projects elsewhere, are involved. As far as fresh loans are concerned, we are granting in principle approval, which means, the applications are being accepted but loans will be disbursed only after government approvals,” he said.

“The long status quo on the projects has made these projects an unsafe investment for banks. This is the reason why banks are demanding indemnity bonds,” said R S Bhullar of ATS Builders.

Said Dilip Moudgil of Omaxe, “Our clients have told us that banks are refusing further payments. But we have bought the small chemical factory due to which our NoC was cancelled. We have now been granted clearance by the Punjab Pollution Control Board”.

Smaller builders like Silver City and Reglan, however, are in for a double whammy.