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Bank approved projects refer to those properties whose title and other legal documents have been examined by the bank thoroughly, so that interested home buyers can be assured that the project is legally clear and they can go ahead with the property purchase, without worrying about likely issues on the builder’s title/right to the property being built. Banks also inspect the building plan and all other clearances required by the builder for the construction, as a part of its project approval process.

The inspection of the property by the bank is done after the developer requests the bank to do so. After the project is approved by the bank, the home buyer can apply for a home loan from the same bank. The home b, thus, do not need to go through the legal or technical verification of the project themselves and the entire process of property inspection is fast tracked to a great extent. The banks only verify if the construction is progressing as per the builder’s payment schedule and accordingly releases the required loan amount.

Responsibility of the banks

After getting the approval of a bank, it can be assured that the developer of a particular project is trustworthy and there are no problems in its legal, technical or financial matters. 

However, home buyers must know that in case of construction delays, banks will not be responsible. Banks will not take any charge to question the developer in such a circumstance and may also refuse to release further loan instalments. Also, in such situations, banks will not give any special consideration, if a borrower defaults on the payment of the monthly EMI. 

It must also be noted that banks may also lend the developers for the construction of the project. A delay or interruption in the construction process also hampers the bank’s return of investment.

Method of Approval

Banks follow a particular process for approving a project. One of the first things that are checked by them is to verify if the land on which the project is being developed has been approved by the relevant authorities or not. The bank orders a check of the property’s rights and acquires a report that must mention that the land is free from all legal charges.

The next step that is taken up by the bank is to check for environmental clearance from the Union Ministry of Environment. Banks also check if the proposed construction plan of the building is approved or not.

After the project has been approved, the banks assign an Approved Project Financial (APF) number to the developers. The APF number confirms that the project has received all the necessary approvals and home buyers can now invest in it, without any worry.


One of the biggest benefits for home buyers to invest in bank approved projects is that the process of getting approval for the Home Loan speeds up, as the bank would have already checked and confirmed the sustainability of the project, especially related to its legal and technical aspects. Thus, those willing to opt for a Home Loan have a faster chance of getting their loans approved.

Moreover, the fact that banks conduct a thorough inspection of the projects also ensures that developers stick to their promises and deliver the project to the home buyers on time. The presence of the banks makes sure that the developer also provides all amenities as listed in the agreement.

Finding Bank Approved Projects

One of the easiest ways to find projects that are approved by a bank is to visit the bank’s website and open the tab that displays the list of the projects that they have approved. The contact details and location of the approved projects will be available on their website. It is always suggested to pre-check with the bank if they have approved the project, in which the home buyer is interested to invest. You can also ask the builder for a list of banks who have approved the project, if you have already shortlisted some properties.

Approved Projects and Bank Loan

It is always advisable to apply for a loan from a bank that has already approved the project, for faster loan processing. In case you have finalised a bank/financial institution or already had your application processed before shortlisting the project, you can always ask the bank to take up the project approval process. Do consider, however, that the bank approval process for a project takes time, since the documents to be evaluated are quite substantial.

Also note, if a project is approved by one bank, it is not necessary that another bank will necessarily approve it. So, always check the project approval status with your bank/ developer to avoid such inconveniences.

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