The Ghaziabad Development Authority (GDA) is combatting illegal constructions by notifying nine banks to verify property legality before granting loans. The move comes in response to unauthorized building in GDA zone 7. The goal is to prevent multi-storey constructions on single-storey plots and deviations from sanctioned layouts. While GDA can take actions like demolition, the challenge lies in banks granting loans without checking legality. GDA directs banks to verify layout plans and cease loans for illegal properties. However, some bank officials suggest that RBI's clear directives are essential for effective change. GDA's collaboration with banks aims to ensure lawful urban development and curb unauthorized constructions.
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The Ghaziabad Development Authority (GDA) has taken a significant step towards curbing rampant illegal constructions by sending notices to branch managers of at least nine banks. The notices direct the banks to conduct thorough verification of layout plans and assess the legality of properties before offering loans for them. The move comes as a response to the escalating issue of unauthorized constructions, particularly within GDA zone 7, which encompasses areas such as Rajendra Nagar, Sahibabad, Lajpat Nagar, Swarup Nagar, Shyam Park, Naveen Park, Radheshyam Park, and Shalimar Garden.
GDA's initiative aims to address the growing concern of unauthorized multi-storey buildings on plots designated for single-storey flats, along with other deviations from the sanctioned layout. Such violations not only strain the existing civic infrastructure including roads, sewers, and water supply systems but also pose a significant challenge to urban planning. In light of this, the GDA vice-chairperson, RK Singh, emphasizes that while the GDA possesses the authority to take actions like demolition, sealing, and filing FIRs against violators as per the UP Urban Planning and Development Act, 1973, the situation has proven to be a deadlock due to banks extending loans without verifying property legality.
To counter this issue effectively, the GDA has not only directed banks to verify map layouts and compliance with regulations before disbursing loans but has also urged them to seek the termination of loans already granted for illegal properties. This approach comes from the understanding that properties financed by banks, if found to be unauthorized, could eventually face demolition or other coercive measures, making it challenging for banks to recover the loaned amount. In response, the GDA suggests that banks should examine their current portfolio of properties that have already received loans. If any of these properties are found to be in violation of norms, banks should initiate the process of recovery and persuade borrowers to provide sureties with legally compliant properties.
While the GDA's endeavour to restrict loans for illegal properties is commendable, some banking officials have expressed reservations. An anonymous bank official notes that the responsibility of verifying the authenticity and legality of properties lies with banks that grant loans. However, in many instances, this due diligence process falls short. This official believes that the GDA's appeal to banks to refrain from lending for illegal properties might not yield the desired outcome. For effective change, the official suggests that clear and unequivocal directives from the Reserve Bank of India (RBI) are necessary.
In summary, the Ghaziabad Development Authority's recent move to collaborate with banks in addressing the issue of unauthorized constructions reflects a proactive step towards urban planning and development. By urging banks to ensure the legality of properties before granting loans and encouraging them to assess the legality of existing loaned properties, the GDA seeks to create a more sustainable and compliant real estate landscape in its jurisdiction. However, the effectiveness of this collaboration might hinge on the regulatory support and guidelines issued by the RBI to ensure consistent and stringent enforcement of property verification procedures by financial institutions.
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