It’s an open secret. Many banks are unwilling to provide home loans to certain combinations of co-applicants, mainly — a father and an unmarried/married daughter, a pair of sisters, and even a brother and a sister. Even as the advertisement campaigns of many public and private sector banks show women in a position of strength and feature women ambassadors, a guarded approach prevails on ground.
It is not without reason, argues Nitin Bhatia, a real estate expert based in Delhi.
“Loans are given upon risk assessment, which in turn depends on the various inheritance and succession customs in India. If you see the combinations which are allowed (such as father and son, brothers, spouses as co-applicants) and not allowed, you will find they are linked to the inheritance and succession traditions practised in the society,” he says.
He highlights in his blog nitinbhatia.in that lenders are wary of providing loans to a father and a married daughter. “The lender is concerned about who will pay the loan. At the end of the day, what a woman earns after marriage is not Stri Dhan (gifts in the form of money or jewellery a woman receives upon her marriage). Her husband may not allow her to pay the EMIs,” he says.
Of course, the banks have no such policy on paper and it is solely at the lenders’ discretion that such decisions are taken.
Laws too do not discriminate. In the absence of a will, the Hindu personal laws for Inheritance and Succession give daughters full rights over property. In fact, it was over ten years ago, in 2005, when the Hindu Succession Act 1956, underwent a drastic amendment, giving daughters equal inheritance rights over coparcenary property or an “undivided Hindu joint family property” as their male siblings, says lawyer Apoorva Vohra.
But traditionally, “families prefer to hand over immovable property to their sons,” admits a banker who did not wish to be named. This is the general experience, he says, and which is why in order to avoid getting tangled in a dispute and ensure loan repayment, they tread carefully when negotiating loans for these “risky” combinations.
Unmarried daughters and father/mother, however, are given loans on a case-to-case basis — usually when there are no other stakeholders in the property. “Banks think that a daughter as a co-owner is a different entity after marriage. Now assume in case of death of borrower, or father as is often the case, his portion of the property goes to the son, and daughter already owns half (as a co-owner). The son then wants to sell and repay the loan, but the daughter’s ‘new’ family objects. What happens then?” the banker source says.
According to regular procedures, the banks are safe even then. At the time of purchase of property and granting the loan, banks keep the property papers with themselves as security. Banks can sell the property and recover loans in case of default.
According to Ranjana Kumari, director of the Centre for Social Research, it is essentially a “mindset” problem. She says it is bias in society that gives rise to this caution among bankers.
“The property that the father and mother buy can be willed, and the prevalent practice in India is to present it to the son. The parents give some dowry to girls (which becomes another issue). Even the richest of the rich prefer to spend a fortune on their daughters’ weddings and expect the girl to release the property rights to their brothers,” she adds.
“All forms of property should be distributed equally —.whether inherited or acquired. Even now, 99.9% fathers will leave property to their sons.”
Women must be ensured, what Dr. Kumari calls the “Fundamentals of Power” — political power, property rights, and rights over progeny. “And all of these powers, currently, belong to the men in our country in practice,” she says.