Center Considers More Relief Measures for Real Estate Sector
In an attempt to help the NBFCs and real estate companies, the center is considering more relief measures for both underscore sectors. In the last few months, the government has announced or initiated some measures to sharp reduce liquidity and credit crisis in the economy.
Source states, the government is considering the option of relieving some of the major NBFCs of stress assets through a dedicated scheme, a stressed asset fund may be created to buy the stressed financial assets.
Besides, the RBI is possible to consider recommendations and suggestions from the finance ministry and Prime Minister’s Office to allow the banks to take the decisions of not listing them as default or special mention accounts (SMA) and go for one time revise of discriminating real estate companies’ loans.
RBI permits banks to one-time recast realty loans to revise for temporarily removing the NPA or even SMA accounts label. It will be done on a case to case basis for projects which are at an exceptional stage but delayed due to funding because of repayment difficulty, projects with positive cash flows.
Sources further express that it is not for the whole industry, but to sound projects in which banks will decide on the commercial decision after being approved by the RBI.
This would require the revision of realty developers’ loans. One time revision would mean a one-time recast for realty developers’ for loan repayments which will not list their loans as SMA or NPA. And this will help them approach funding companies or markets without having any doubt on their profiles. Adding this is actively going after as the industry has recommended it for as an option for matching liquidity gap.
Finance Ministry (FM), PMO, and the Reserve Bank of India (RBI) have taken multiple steps for reviving the realty sector. It has been seen as key to show growth and demand for the country’s economy.
The government recently announced setting up Rs 25,000 crore Alternative Investment Fund (AIF) to strengthen the realty sector after a review revealed that around 4.58 lakh housing units were stuck in Indian Realty Market.
Earlier, FM Nirmala Sitharaman had told that an internal survey revealed that around 4.58 lakh housing units were stuck in India with over 1,600 realty projects stalled.
The Cabinet also approved an establishing of ‘Special Window’ to give priority based debt financing for the completion of delayed housing projects in the affordable housing and middle-income housing sector.
Real estate industry associations CREDAI and NAREDCO have also been looking for this one-time recast.
