The Reserve Bank of India has issued a circular on 1st of July saying that builders need to mention the name of the bank which has mortgaged their land as well as apartments. Sources have however revealed that none of the developers have made any such disclosure as of yet.

It has been directed by the apex bank that all banks should ensure that the builders mention the name of the bank to whom they have mortgaged their land in pamphlets, brochures and advertisements.

"The builder will indicate in their pamphlets/brochures that they would provide no objection certificate/permission of the mortgagee bank for sale of flats/property, if required," said the circular.

"We must honour this stipulation. There should be no harm or difficultly in doing so. There have been complaints that the flat buyer was not aware about the mortgage. This rule will bring more transperancy," said Sunil Mantri, president of the Maharashtra Chamber of Housing Industry.

"The money paid by the buyer has to go into the account of the bank from whom the loan has been taken by the builder. In most cases, the builder puts this amount into his own bank account without informing the lender bank. This tantamounts to a double sale. Every builder is doing this," he said.

RBI has indicated that banks should stop funding a builder is he does not comply by these norms.