Government may consider realty developers’ demand for restructuring of loans

MUMBAI: The government may consider real estate developers’ long-pending demand for restructuring of loans for a period of 12 months and the Ministry of Housing and Urban Affairs is likely to suggest the same to the Ministry of Finance.

“This restructuring of loans makes eminent sense as difficulties the sector was experiencing it was under strain and now if you have several months of non activity,” Minister of Housing and Urban Affairs Hardeep Singh Puri told realty developers over a video conference organized by realtors body CREDAI and industry body FICCI.

He has asked realty developers to send the proposal that will be examined and then forwarded to the Ministry of Finance.

As developers’ complained about cement and steel manufacturers’ plan to increasing prices of these raw materials post Covid19 crisis, Puri said this “clearly is an unfair business practice and rates should rather go down as overall economic activity is down.” He assured developers of approaching the Ministry of Commerce regarding this.

Puri acknowledged the developers’ concern that despite the Reserve Bank of India’s decision to reduce repo rate over the last 14 months, commercial banks have not passed on the benefit of the same to customers. He believes this issue is not limited to real estate, but there is generally reluctance among banks and he will look into this.

He also assured realty developers of pursuing foreign direct investment norms revision to allow investments in ready and nearly ready real estate inventories.

Puri discussed and assured looking into various other issues including subvention schemes to be allowed by the National Housing Bank and RBI, directive to all states for extension of validity of all approvals by 12 months and increasing the price limit of affordable housing to Rs 75 lakh from current Rs 45 lakh.

In a separate call organized by NAREDCO, Durga Shanker Mishra, Secretary, Housing & Urban Affairs, pointed out that the Aadhar verification can be used as a digital signature for the purpose of disbursement of loans.

“There are several transactions taking place where everything is sanctioned online by banks, however, it is getting stuck for want of digital signatures for disbursement of loans. In such case, Aadhar verification can be done online as a solution for the situation,” he explained.