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The special window will also get investments from institutions like LIC and the SBI which will take the corpus to Rs 25,000 crore. The fund will be open to other sovereign funds to add to the corpus.
The move is expected to cheer up those who have been affected by the stalled housing projects and provide relief to a slump-hit sector amid slowing consumption.
Addressing the media, finance minister Nirmala Sitharaman said that the ministry has estimated that over 1,600 housing projects are stalled in which 4.58 lakh housing units are stuck. The stuck projects are at various stages of completion.
She added that she has met with home buyers and other stakeholders along with the RBI governor to come up with a mechanism to provide relief to home buyers.
The money will be put into an escrow account for the affected projects and only those which are RERA registered will be allowed to get money from the fund. The idea behind putting the money in an escrow account is to ensure that the fund gets utilised, said an official. The only condition to avail these funds will be for the project to be net worth positive.
The finance minister also said that those projects which have been declared as NPAs by banks and those facing bankruptcy proceedings under the NCLT but not referred for liquidation will also be included in the scheme.
Welcoming the move, the real estate developers association, CREDAI’s chairman Jaxay Shah said, “It’s a very welcome change from the initial announcement (of September 14). Now the only criteria for eligibility is networth positive projects… this will ensure that the fund is actually deployed to complete incomplete projects which are even NPA or also in NCLT.”
“We are certain that a majority of stuck homebuyers will benefit from the announcement of a Rs 25,000 crore stress fund which is going to be increased in value if needed,” Shah added.
The Rs 25,000 crore fund will be managed by SBI Caps.
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