MUMBAI: To give fillip to the real estate sector, India’s largest lender State Bank of India on Wednesday launched a home buyer finance guarantee scheme under which the lender would refund the entire principal amount if the developer fails to deliver the project within the assured deadline. The refund scheme will be valid till the occupation certificate is procured by the builder The ‘Residential Builder Finance with Buyer guarantee scheme’ can be availed for projects where the maximum home price is upto Rs 2.5 crores. Developers fulfilling due diligence by the bank can also avail a loan between Rs 50 crores to Rs 400 crores under the scheme.“The product that we have designed will have huge implications for the real estate sector as well as the home buyers who are consistently stuck with undelivered projects,” said Rajnish Kumar, Chairman, SBI . ”With lot of regulatory changes in RERA GST and post demonetisation we believe that there is a way to ensure that home buyers get their projects on time and their monies are not stuck.”In the first leg of the scheme the bank has signed an MoU with Mumbai-based Sunteck developers for three projects which will be constructed in the Mumbai Metropolitan Region.Efforts have been on multiple levels to revive the struggling real estate sector. In November, the central government had announced setting up of a Rs 25,000 crore alternative investment fund (AIF) aimed at providing relief to developers with unfinished projects to ensure delivery of homes to buyers.SBI had also recently slashed its external benchmark rate by 25 basis points to 7.8%, bringing cheer to mortgage borrowers. New home loan borrowers can avail mortgages starting at 7.9% compared with 8.15% earlier. The state-owned lender has 22% market share in home loans.“We expect home sale velocity to double but we will take risks only with those developers who can deliver projects on time,” said Kumar. “There will be a thorough due diligence and only those projects will be pre-approved that pass the muster.”Kumar also said that the structure of the scheme will be bankruptcy remote as the builder will not be able avail services on credit through operational creditors. Also, the cash flow of the project will be ring-fenced through the escrow account mechanism. Initially the scheme will cover projects in 10 cities and will be expanded later.