Bank approved project: what a lender's approval checked, and what it never did

The hoarding on the highway carries the tower, the starting price and a row of bank logos under two words: approved by. Brokers repeat it as though it settles everything. A bank approved project is one that a lender has examined and agreed to fund home loans in. That is worth knowing, and it answers a narrower question than most buyers think: what a lender's approval checked, what it never looked at, and which checks are still yours.

Rohit is offered a row of logos as an answer#

Rohit (illustrative, as our stories always are) is 35 and was choosing a Pune flat from abroad, with his brother-in-law in Pune for anything that needed someone on the ground. One of the other projects on his shortlist advertised that it was approved by several banks. When Rohit sent the broker his questions about the promoter's earlier projects, extensions and complaints, the broker replied with the logos: if the banks had approved it, the people who check for a living had already checked.

Rohit asked a narrower question. Checked what, and for whom? The answer turned out to be in the banks' own fine print. Names and numbers in this story are illustrative.

What a lender's project approval is#

Before a lender will take a flat as security for a home loan, it wants to know two things about the project: that the land and the right to build on it are legally sound, so the mortgage it takes will hold, and that the building is what the plans say it is. Project approval does that work once, for the whole project. The developer applies with the project's papers, the lender's legal side reads the title and the development rights, its technical side looks at the sanctioned plans and the site, and if the lender is satisfied it lists the project. Lenders often call this approved project finance, or APF, and some issue an approval number.

The point of the listing is speed: a loan in a listed project does not wait for the whole project to be appraised from the beginning, which is why lenders advertise faster sanction and lighter paperwork in approved projects.

Think of a health insurer's list of network hospitals. The insurer signs a hospital up so that claims can be settled cashless, and checks what it needs for that arrangement to work. Nobody reads the network list as the insurer's opinion of the surgeon. A lender's approved list works the same way: it makes the lender's own process faster, and it is silent on how the project will turn out for you.

What the banks themselves say it is not#

Lenders say this plainly, in the notes beside their lists. Kotak Mahindra Bank's approved project list states that the information "should not be construed as an endorsement, guarantee, or recommendation" and that the bank "has only approved the project, for funding purposes". It adds that loan applications in those projects are approved or rejected at the bank's sole discretion, after its own due diligence. Canara Bank clarifies that its approval "is project-specific and not builder-specific", and advises customers to make independent and discreet enquiries and satisfy themselves on the builder's credentials before deciding. HSBC's list warns that even where a project is named, certain towers, wings, floors or units may be excluded from the approval. One bank's own explainer on approved projects, written in warm terms, still adds that banks will not be responsible for construction delays.

How it works once you apply#

Approval of the project does not approve you. Each application is still assessed on the borrower's income and credit, and the lender takes its own legal opinion and valuation on the particular flat before it sanctions an amount. On an under-construction flat the money then moves through a tripartite agreement and is released in stages, each one only after the lender is satisfied the building has reached the stage the builder's demand claims, as the home loan on an under-construction flat explains.

That stage check protects the bank's next tranche. It is not a report to you, and between demands nobody is watching the site on your behalf; checking a demand against the architect's certificate is covered in checking a builder's demand letter.

Why so many projects carry the logos#

Home lending in India runs at a scale where approved lists are routine rather than rare.

NHB's figures put disbursements at Rs 9.07 lakh crore in the year to 31 March 2024. At that volume, appraising a project once saves every later loan file in it the same work, and the lists are long: Kotak Mahindra Bank's published list alone runs to more than 2,000 approved projects. A project carrying several banks' names is therefore ordinary. It means the developer applied to several lenders and the papers satisfied each one's checks for its own purpose.

Where buyers get it wrong#

Reading the logos as a recommendation. The lenders' own terms say approval is for funding purposes and is not an endorsement. A broker who presents it as one is saying more than the bank does.

Counting the logos. Five approvals are five lenders' decisions about their own security, often made on the same papers. If the papers are false, all five can rely on the same falsehood. In the Kalyan-Dombivli case, where the Bombay High Court ordered 65 buildings on forged permissions demolished in November 2024, press reports at the time said some buyers had taken housing loans from nationalised banks. The check that would have caught it was a check at the planning authority, which a fake building permission check at the source walks through.

Assuming the approval covers your flat. Lists can exclude towers, wings, floors or units, and a commencement certificate is often issued in stages. Your floor has to be inside both.

Assuming the bank is watching the site for you. It checks a stage before releasing its own money. A stalled site stops the bank's releases; it does not stop your pre-EMI interest on everything already disbursed.

Treating your own sanction as a title opinion for you. The lender's legal opinion serves the lender's mortgage. Read the filed title report and the conditions it carries, which the title certificate's exceptions explains line by line, and check whether the land is already charged, using what MahaRERA's declared charges show and the CERSAI check. An unanswered charge declaration is not a clean one.

If a broker has just offered you a row of logos as the answer, the free project page on ReraGenie puts the questions the logos skip on one screen: the possession timeline, extensions with the promoter's stated reason, complaints with case numbers, declared charges and the promoter's other registrations.

What Rohit ran anyway#

Rohit did not argue with the broker. He put the same questions to all three projects on his shortlist, and the filings answered them over an evening from abroad: each registration's status, the first promised possession date against the current one, extensions and their reasons, complaints with case numbers, declared charges, and the promoter's other registrations with how each had ended. He used how to check a builder's track record as his list, and who is behind the company for the names behind each promoter. The approval had answered none of these, and the banks' own terms never claimed it had.

He booked the Wakad project, registered in 2024, an Rs 86 lakh flat with an Rs 8.6 lakh booking amount, on a home loan under a tripartite agreement. His own lender relied on no one's list: it ran its own legal and technical checks on the project before sanctioning his loan. Rohit read the sanction as the lender's decision about its own money. The questions about the promoter had already gone to the register, which is where the NRI buyer's playbook sends every remote buyer first.

What the buyer report shows on this question#

The Rs 499 ReraGenie buyer report reads one project's filing and selected filed documents, and three of its sections answer what an approval leaves out:

• The promoter's other registrations and how they ended, so a project's backer is judged by its own filed record rather than by who agreed to lend in it.
• The possession story, the first promised date against the current one, with each extension and the reason the promoter filed.
• Land and title as five questions, including whether the land is mortgaged as declared and what the legal title report concludes, with the exceptions its advocate attached printed beside the conclusion.

It includes the project's filed documents as a ZIP and a free 90-day project watch, which emails you when that project's filing changes. See what the report covers.

The one-line summary#

A bank approved project is one a lender has checked for its own security: useful for a faster loan, silent on whether the promoter delivers, and no substitute for reading the filing yourself.

Methodology and sources#

• What approval is and is not: the published notes on the approved project lists of Kotak Mahindra Bank, Canara Bank and HSBC India, and lender explainers on approved project finance, read in October 2026. No project is named here.
• Housing loan figures: National Housing Bank, individual housing loans outstanding to 30 September 2024 (reported March 2025) and disbursements in the year to 31 March 2024.
• The Kalyan-Dombivli case: press reports of the Bombay High Court's November 2024 order and of the buyers' home loans; the full account is in the linked article.