Realty players seek stimulus package

We welcome the RBI's decision of providing the liquidity boost to the realty sector. We are hopeful that the government will soon aid the sector with the announcement of the much-needed economic package

– Credai Chairman Jaxay Shah

The real estate industry on Friday hailed RBI's decision to boost liquidity into the system and provide relief to loans taken from NBFCs for commercial projects, but sought one-time restructuring of their loans and a stimulus package to help the sector in battling the crisis caused by the lockdown to control Covid-19.

The RBI on Friday reduced the reverse repo rate - the rate at which banks park their fund with the central bank - by 25 basis points to encourage banks to lend to the productive sectors of the economy. It also announced an additional Rs 50,000 crore through targeted long-term repo operation (TLTRO) and another re-financing window of Rs 50,000 crore for institutions like Nabard, National Housing Bank and Sidbi.

Credai Chairman Jaxay Shah said: " We welcome the RBI's decision of providing the liquidity boost to the realty sector. We are hopeful that the government will soon aid the sector with the announcement of the much-needed economic package."

The RBI has allowed NBFCs to extend the date for commencement for commercial operations (DCCO) in respect of loans to commercial real estate projects by an additional one year if the projects got delayed for reasons beyond the control of promoters. Credai president Satish Magar said, measures such as extension of DCCO, fresh LTRO and reverse repo rate cut will help uplift the economic slowdown. "Loans given by NBFCs to real estate companies will get similar benefits as given by scheduled commercial banks, thus easing the financial burden on developers," he said. Naredco president Niranjan Hiranandani said: "From the perspective of regulatory norms to spur an economic revival, the measures announced aim to maintain adequate liquidity in the system, facilitate bank credit flow and ease financial stress. These are absolutely welcome, given that economic activity has come to a standstill during the lockdown." He said the announcement that loans given by NBFCs to real estate companies would get similar benefits as given by the scheduled commercial banks was positive. Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa said NHB has been provided with a refinance facility of Rs 10,000 crore for HFCs as additional liquidity for individual housing loans, which is a much-needed boost at this time.