Builders asking for support of RBI to deal with Covid second wave

Following the Reserve Bank of India (RBI) Governor Shaktikanta Das's announcement on Wednesday of Covid relief measures for individuals, small businesses, and MSMEs, real estate developers have requested loan restructuring, a moratorium on interest payments, and additional liquidity support for the property sector.

The RBI Governor mentioned multiple steps covering the second phase of loan restructuring and additional relief initiatives, including a term liquidity facility approximating Rs 50,000 crore for healthcare and SLTRO for Small Finance Banks. The central bank also acknowledged the challenges encountered by individuals, small businesses, and Micro, Small, and Medium Enterprises due to downsizing, and it introduced resolution 2.0 measures to restructure loans of up to Rs 25 crore for smaller borrowers.

CREDAI voiced its optimism that comparable actions would be revealed shortly to confront the difficulties confronting major corporations and labor-intensive industries like real estate.

Real Estate Sector Needs Consideration From RBI

According to CREDAI President Harsh Vardhan Patodia, "We are persuaded that measures that classify accounts as SMA 1 and SMA 2 also qualify for restructuring. An interest rate moratorium, combined with more liquidity under ECLGS 3.0 allocated to real estate projects, will aid in economic recovery and job creation, which are critical to offset the impact of the second wave."

NAREDCO President Niranjan Hiranandani stated that the RBI governor's announcement of multiple projects, including the second phase of loan restructuring and additional relief measures, was a move toward progress. It is hoped that he will also examine industries such as real estate that require comparable assistance during these difficult times. The expectation is for consistent, measured, and on-time action across sectors like real estate.

JLL India's chief economist and head of Research & REIS, Samantak Das, stated, “Apart from individual borrowers, this will be of great help to SMEs associated with the real estate sector, especially resource providers for this sector.”