Real estate India will gain a boost from the Finance Ministry of India. With the plan to provide bank loans to the real estate players with halted project the Finance Ministry aims to lift them up.
Finally real estate has some good news from the Finance Ministry. Reliable sources reveal that the ministry had talks with top bankers in relation to the halted real estate projects.
Finance Ministry will support the real estate builders by helping them secure bank loans. These bank loans are meant to finish their halted projects. In fact this will boost the real estate sector.
As per the Finance Ministry’s plans the bank loans will be offered to the builders who financially struggle to complete their stalled projects. Finance Ministry will take the decision within a couple of weeks.
Latest RBI data show that the bank credit to the residential sector is lower than the aggregate growth rate of bank credit. Aggregate growth rate of bank credit is 15.9 % while that of residential sector is 12.1%.
A senior private sector bank officer said that bank loans will be offered to complete the stuck residential projects. Real estate builders will be able to finish their residential projects with these loans. However the bank loans will be made available for the residential projects. Commercial projects seem to be excluded from the list.
Reliable sources reported that the apex organization of banks- IBA has produced its report to P Chidambaram, the finance minister. Last month P Chidambaram held a meeting to discuss the problem. The meeting was attended by Heads of public sector banks and financial institutions.
Sources, close to the finance ministry, reveal that revision of lending norms as well as providing loans to a number of stalled projects were to be put forward and approved.
Mr. RV Verma’s, the chairman and managing director of National Housing Bank, announcement of Rs.9000 Cr home loans gives more hope to the real estate builders.
Mr. Chidambaram’s suggestion to lower the prices to offload the unsold real estate projects was not welcomed cordially. Real estate builders, pointing to the higher production cost, said that they are not able to cut the prices off too lower.
