The start of the new year could not have been sweeter for homebuyers, with India's largest lender-State Bank of India launching a home buyer finance guarantee scheme. The scheme aims to protect homebuyers from errant developers, by providing them a refund of the entire principal amount in the eventuality of a developer failing to deliver the project within the stipulated deadline.

The scheme known as 'Residential Builder Finance with Buyer guarantee scheme' can be availed for projects where the maximum price of the house is up to 2.5 crores. The lender has introduced this scheme which guarantees completion of the projects funded by the bank to customers availing SBI home loans.This is a huge step towards reaffirming positive sentiment around homebuying amid a liquidity crisis in the real estate industry which has led to several under-construction housing projects being stuck.

As per a leading national daily, SBI chairman Rajnish Kumar said the product will bring back confidence among investors towards under-construction projects by securing their hard-earned money. With the focus of the RBG scheme largely towards the affordable sector, it will also help the real estate industry bring back its lost buyers.

The scheme will be available in seven Indian cities at the beginning and we believe will venture out to other Indian cities soon. The state-owned lender's initiative to make the scheme available for all builders coming under the prescribed criteria who can avail loans between 50 crore to 400 crores, sure proves to be a boon for the real estate sector.

The launch of the scheme along with the government's recent initiatives in the form of cash-infusion in the industry shows the diligent efforts of the government to bring the real estate industry out of the shadow.The industry in India which once grappled with profuse unscrupulous and unethical players loomed out of darkness aided by Real Estate (Regulation and Development) Act, implemented by the government in 2016. The new scheme offered by the state lender will make the industry more and more transparent for home buyers and this is surely expected to help increase the cash flow in the Indian real estate sector going forward.

It is also foreseen that with SBI launching the scheme, more and more reputed banks will follow suit, which will give homebuyers and developers a wider option. To begin with, the bank has signed a memorandum of understanding with Mumbai-based Sunteck Developers for three projects which will be constructed in the Mumbai Metropolitan Region.

To give further filip to the real estate industry, the bank has also reduced its external bechmark rate by 25 basis points to 7.8%, which is a big positive for mortgage borrowers. Home buyers planning to secure a loan have more reasons to cheer as they can now avail mortgages starting at 7.9% from the lender compared to 8.15% earlier, reported a leading daily.