You should act as per public sector bank advice 

2) Since the property is unregistered, no legal title has passed to the current NRI owner yet. They only possess a "beneficial interest" or contractual right through an allotment letter or Agreement to Sell. By executing a Tripartite Assignment Agreement, the NRI owner legally assigns and transfers all contractual rights to you. Once executed, the NRI exits the picture. Legally, the builder can then directly execute a Sale Deed with you as the first registered owner.

3)  Public sector banks (like SBI) maintain much stricter due diligence guidelines. They require the NRI owner to be a Confirming Party in the final Sale Deed to create an ironclad "paper trail" or chain of title. The bank needs to issue the Demand Draft (DD) in the NRI owner's name to pay them off. If the NRI owner is not a party to the registry document, the bank cannot legally justify releasing a home loan DD to a person whose name does not appear on the final title deed being registered.

Since the current owner has never registered the property and no Khata has been generated in their name, they do not hold a legal "title" to the physical property yet; they only hold "allotment rights" via their Builder-Buyer Agreement (BBA). A Tripartite Assignment Agreement effectively cancels their rights and transfers/assigns those booking rights to you with the builder’s consent. Once executed, the original owner is technically out of the picture, and the absolute Sale Deed can legally be executed directly between the Builder (as Vendor) and You (as Purchaser).

PSU banks follow strict legal diligence to mitigate any risk of future litigation. Even though the Tripartite Assignment Agreement transfers rights, the current owner has paid money to the builder and holds the primary paper trail. If that NRI owner later claims fraud, asserts that the assignment agreement was forged, or argues that they did not receive the full consideration money from you, the title becomes defective.

If the NRI owner is entirely absent from the final registry, wrapping up any unexpected old financial liabilities, tax disputes, or getting a clean, undisputed A-Khata in your name might become cumbersome if the municipality tracks the original allotment name in the builder's local sanctions.

If you choose to go with the private bank to avoid the operational hassle, ensure that the Tripartite Assignment Agreement has an aggressive indemnity clause. It must explicitly state that the current owner indemnifies you against any future claims, legal disputes, or unpaid property taxes up to the date of execution, and that they completely extinguish their rights.

It is in your interest to have owner as confirming party 

It confers clear and marketable title to property 

Dear Client,

Legally, for a flat that has not yet been registered in your name, the registry (sale deed) must be between the current NRI owner and you, so the Sub‑Registrar will normally require the NRI ownership link to appear in the document, which is why the PSU bank insists on the NRI (or their authorised POA‑holder) being a “confirming‑party” in the registry chain. A tripartite‑assignment‑only route that skips the NRI from the sale‑deed may create future title‑chain questions with banks, future buyers, or tax authorities, even if a private‑sector bank is more relaxed, because the NRI’s clear transfer to you should ideally show up in the registry and municipal records, not only in the tripartite agreement.

To satisfy the PSU‑bank’s requirement without forcing the NRI to come to India, the safest route is to have the NRI execute a notarised and embassy‑attested Special POA in favour of a trusted relative/agent, so that the POA‑holder can sign the sale‑deed and registration papers as the confirming‑party, while your tripartite‑agreement can be submitted to the bank as supporting proof of assignment‑of‑rights. Beyond this, options are limited: the NRI must either appear in person, send a valid POA, or allow the bank to treat the owner‑link as fully transferred. Skipping confirmation by the true owner can create avoidable title gaps and is best minimised by following the standard NRI‑property‑registration pattern in Karnataka.

I hope this helps and if you have any further issues do not hesitate to contact us.

1. If the Assignment Deed is a registered one, then there's no need for the current owner to sign as a Consenting Witness in the sale deed in your favour. 

2. There would not be any problem in future if the current owner is not a confirming party if the Assignment Agreement had been registered in the Sub Registrar's Office. Moreover Tripartite Agreement confirms the deal. 

The PSU banks are strict compliant of the procedural law to protect their future intersts in this regard so they may not be flexible, you may better have to change the bank and choose a private Bank or NBFC to accommodate your request.

It is the problem of the purchaser to arrange for smooth process in this regard because he is the one who gets back the money, therefore you just inform the purchaser and the builder to arrange for smooth registration of the sale deed in your favour.

Yes tripartite agreement can suffice