Though the bill has been sent to the joint parliamentary committee, which is studying the bill and is expected to submit its report in the winter session, some media reports fuelled by social media messages are causing panic among investors and depositors. But rather than clarifying its position on the bill as soon as the first reports were out, the government waited for social media to go absolutely berserk before the Finance Minister came out with a pacifier.
Before addressing some of these fears, let us first look at what the existing rules mean for depositors and then deliberate on the changes that are expected if and when FRDI is implemented in its current form.
India has historically been a country where not only bank accounts but even mutual funds are considered safe places to park one’s money. No depositor has ever lost his or her money despite the Deposit Insurance Corporation providing a cover of only Rs 1 lakh for both the principal amount and interest earned. The cover was only Rs 1,500 in 1962, when the corporation was incorporated but was increased to Rs 1 lakh in May 1993.
However, the insurance company did not have much work to do as depositors of banks going under were taken care of by merging the failed banks with bigger banks.
Coming to FRDI, here is what section 52 – the section of the FRDI bill that deals with ‘bail-in’, has to say:
“…the Corporation may, in consultation with the appropriate regulator, if it is satisfied that it is necessary to bail-in a specified service provider to absorb the losses incurred, or reasonably expected to be incurred, by the specified service provider and to provide a measure of capital so as to enable it to carry on business for a reasonable period and maintain market confidence, take an action under this section by a bail-in instrument or a scheme to be made under section 48”.
Section 48 details the method and time of resolution and provides for all possible means to ensuring that the depositor’s money is safe. It calls for transferring the whole or part of the assets and liabilities of a specified service provider or creating a bridge service provider, or merger or amalgamation of the specified service provider, as well as the acquisition of the specified service provider, in whole or in part.
Given the path the government has chosen in the case of smaller banks, where they are being asked to merge with bigger ones, the cover amount is not so much of an issue as the government allowing a bank to collapse. Still, the government should have made a reference to it in the bill to allay public fear.
Subsection (7)(e) of Section 52 talks of not affecting any liability any liability, so far as it is secured – thus covering all secured deposits. Subsection (7)(f) takes care of the liability owed to employees or workmen including pension liabilities of the specified service provider, except for liabilities designated as the performance-based incentive.
Depositors have little to worry about in India as even failed mutual funds, as was seen in the case of Unit Trust of India, have been bailed out by the government using taxpayer money. All the depositor has to ensure is that they are part of a bigger entity. After all, if the political damage is big enough, all depositors are bound to get paid, irrespective of the bank or financial entity involved.
FROM RS.1,00,000/- TO RS.3,50,000/- Hope the Government will amend and incorporate this to safeguard the interest of the public and the depositors.
Planning to buy a plot or site in a housing co-operative society?
Planning to buy a plot or site from a reseller, who bought or allotted site or plot by the housing co-operative society?
Please conduct a thorough and diligent scrutiny and examination of all the title documents, approvals and the BACKGROUND of the seller.
A Co-Operative society is permitted by the Government for a specific purpose for a particular or specific group in a specific or particular area for a specfic purpose like credit co-operative society or house building society.
Every person cannot become a member of multiple societies with similar purposes.
There is a By-Law which is applicable to every society, which dictates the terms, conditions, and eligibility of the members and it has to be approved by the Joint Director of Co-Operative societies of that particular state.
The allotment of the sites or plots is governed by the by-laws and the prevailing laws of the state.
A person, which includes his family, cannot buy more than a site or multiple sites from housing society, khb, bda or under ashraya scheme. The entire family can buy only one site either from BDA, KHB, Housing Society or if the family or the head of the family already have a property, then such persons cannot buy a property from these entities.
HENCE, CHECK, BEFORE BUYING.
With the onset of RERA rules and regulations, it has become very difficult for the small and medium scale developers who were present in the real estate sector, to raise funds and capital for their ongoing as well as new projects and almost 75% of the new projects have been shelved or dropped.
There is severe fund/cash crunch in the market, where even the leading builders are finding it difficult to manage their funds, whereas, the others are unable to even complete the ongoing projects.
The Banks may also demand RERA approval for all new projects for home loans and the violators or illegal structures (new ones) may not be able to get home finance. But, There are few financial institutions, which are more willing to lend money to illegal or unauthorized structures even without RERA approval.
Another major blow is that the Income Tax department is scrutinizing all the major bank deposits between Rs.2.5 laks to Rs.1 crore. This scrutiny has further affected the cash flow requirements of the small and medium class builders.
Only, the BIG FISHES may survive at this juncture.
Transactions in immovable property are carried out by parties in properties containing the following elements:
(All approvals, NOC, Licenses, Documents, Provisions, Rules, Regulations, Laws, Taxes, Charges, Fees, and Regulations are not applicable to all the properties. Specific Requirements or eligibility or statutory documents for specific properties.)
Association of Owners.
The following are the nature of properties:
Special amenities and facilities.
Industrial Sheds and Lands.
The following are the nature of rights:
Rights under a mortgage.
There are two types of inheritance and succession:
Intestate succession i.e. by operation of personal laws.
Testamentary succession i.e. through wills.
Three-tier legal scrutiny of titles is essential:
In the hands of the present owner.
In the hands of the prospective buyer for his benefits.
For the benefit of the lending institutions.
Issuing public notice in leading English and vernacular newspapers, inviting objections or claims, is recommended in all cases.
1). Betterment Charges or Improvement Charges.
2). Lake Development Charges.
3). Solid Waste Charges (Municipal Area)
4). BWSSB charges or cell or penalty on buildings without OC.
Properties attract the following taxation:
1) Gift Tax, Wealth Tax or any prevailing or applicable taxes.
2) GST (on the transfer of goods in contracts).
3) Income tax on income and capital gains.
4) Tax exemptions and deductions under special schemes for housing, economic zones etc.
5). Municipal Taxes or Property Taxes.
1). Stamp Duty.
2). Registration Fee.
The following are various modes by means of which any person can acquire any type of right, title, and interest in an immovable property:
20.By grants were given or orders passed by Governments and statutory authorities.
The tracing of titles should begin with the tracing of the earliest documents available pertaining to the property which, probably, will pertain to the documents obtained by the first owner.
First owner: The earliest original documents, records, the order of a court or government or a statutory authority by which the rights to an immovable property is vested with the first owner.
Intermediary parties: The subsequent documents, records or orders of the type mentioned above, duly recording in a chronological unbroken sequence of legal acts, events, identifying and tracing the title in the hands of the various intermediate owners till the last owner i.e., the transferor.
Current owner: The documents of title with the current owner i.e., transferor, including the document by means of which he has acquired title and other documents like the Khatha, Encumbrance Certificate, and tax paid receipts up-to-date.
An investigation of these records must be made before a certification of these records by an advocate. The investigation is the verification of the actual existence of these records in the books/registers of the various departments mentioned above. Certification, on the other hand, is done only on the basis of records produced before an advocate on an apparent examination of the same by him.
Various kinds of transactions and matters mentioned below will not be entered in Book-I maintained by Sub-Registrars and hence will not appear in an encumbrance certificate furnished either in Form 15 or in Form 16 by the Sub-Registrar exercising relevant jurisdiction. Hence, other modes of evidence and documentation are required to confirm the title. The following are the transactions and matters not included in the encumbrance certificate:
Many safeguards must be taken to ensure the vesting of a clear, absolute and marketable title in the hands of the purchaser or any person acquiring any interest in the property in question in any manner whatsoever. Some of the safeguards are mentioned below:
Vital documents for acquiring BMP, BDA property
The following are the documents of title with respect to properties located within the jurisdiction of the Bangalore Mahanagara Palike which are to be obtained from the present owners and verified before purchase/acquisition by lease, mortgage:
1) Parent Deed by means of which the present owner/owners acquired title to the property.
2) Building sanction plan issued by the Chief Executive Engineer, BBMP, BDA, BMRDA or local planning authority, in case of a building constructed on the property.
1) Khatha Certificate issued by the BBMP, BDA, GP in the name of the present owner/owners.
2) Khatha Extract issued by the BBMP, BDA, and GP.
3) Tax paid receipts issued by the BBMP/BDA/GP evidencing payment of taxes in respect of the property.
4) P.T. Sheet and Chalta issued by the City Survey Department containing the sketch of the property in question and its measurements.
5) Encumbrance Certificate (preferably in Form 15) issued by the Sub-Registrar exercising relevant jurisdiction over the property for a period of not less than 30 years.
6) Copy of the plan sanction issued by the BBMP/BDA/Local Planning Authority/BMRDA for the construction of a house or residential or commercial multi-storeyed building.
7) Copy of the Commencement Certificate of the BBMP/BDA/BMRDA issuing permission to commence construction of a multi-storeyed building.
8) Copy of the occupancy certificate issued by the Palike certifying that the building constructed on the schedule property is in accordance with the sanctioned plan.
9) Copy of the receipt evidencing payment of compounding fees to the BBMP or Revenue Authorities or Municipal Corporation or Town Municipal Council for regularising the deviation, if any, made from the building sanction plan.
10) Copy of the No Objection Certificate from the Fire and Emergency Services, HAL, AAI, KSPCB, BESCOM or other electricity suppliers, Water Supply (rural) or BWSSB, Coastal Area Authority(if applicable) Department.
11) Copy of the clearance to operate lifts in the building issued by the Chief Executive Engineer, BBMP, and Electrical Inspectorate.
12) Copy of the NOC/CFE/CFO/Clearance Certificate issued by the Pollution Control Board.
13) Copy of the Endorsement issued by the Director, Fire Services Department, by means of letter addressed by him to the BBMP/BMRDA/BDA or LPA stating that he has no objection to the issuing an occupancy certificate in respect of building constructed on the property.
14) No Objection Certificate from the Airport Authority of India.
The documents mentioned in (6), (7), (8), (9), (10), (11), (12), (13) and (14) usually arise in the case of multi-storeyed buildings and large layouts.
The following are the documents of title with respect to properties allotted and/or sold by the Bangalore Development Authority to the present owner/owners which need to be obtained by every prospective purchaser:
Allotment letter issued by the Bangalore Development Authority in favour of the present owner in respect of the property.
Possession letter issued by the Bangalore Development Authority in favour of the present owner in respect of the property, recording handing over of possession of the property to the present owner.
Absolute Sale Deed executed and registered in favour of the present owner by the Bangalore Development Authority in respect of the property after the expiry of 10 years from the date of allotment.
Building sanction plan issued by the Bangalore Development Authority where a building has been constructed on the property.
Khatha Certificate issued by the Bangalore Development Authority in the name of the present owner/owners.
Tax paid receipts issued by the Bangalore Development Authority evidencing payment of taxes in respect of the property up-to-date.
Encumbrance Certificate (preferably in Form 15) issued by the Sub-Registrar exercising relevant jurisdiction from the date of allotment up-to-date.
1). DC Conversion Order for the change of land use.
2). Change of Land Use from BDA, MUDA/BMRDA or Any other LPA.
3). Developmentpment Plan from BDA/BMRDA/LPA.
4). Sanctioned Building Plan from Municipal Corporations or TMC or GP as applicable.
5). NOC from BESCOM ( in case of Bangalore), BWSSB ( in case of Bangalore) AAI, HAL, GSI, Fire and Emergency Services, LDA, CFE and CFO from KSPCB.
6). In case of Coastal Areas, appropriate orders from Local Bodies.
7). NOC from KIADB, KHB, LAO, NH and BDA.
8). NOC Under Sec 79A and 79B, 7 and 7A and PTCL Acts. (specifically for agricultural lands)
9). RERA APPROVAL.