CREDAI to Seek Government Support from RBI Governor
Members of the Confederation of Real Estate Developers Association of India (CREDAI) are scheduled to meet with the Reserve Bank of India (RBI) Governor, D Subbarao, next week. The primary objective of this meeting is to urge the Government to provide additional support to the struggling real estate sector.
Key Demands from CREDAI
- Restructuring of Existing Debt: The developers will request Financial Institutions (FIs) to grant a minimum moratorium period of one year. Subsequent terms and conditions will be determined by the FIs.
- Revision of Home Loan Interest Rates: Currently, home loan borrowers with loans up to twenty lakh rupees are eligible for reduced interest rates. CREDAI proposes to increase this eligibility cap to thirty lakh rupees, specifically for customers in metropolitan areas. Furthermore, they advocate for a decrease in home loan mortgage interest rates to below 10%.
Industry Insights
According to Pradeep Jain, Chairman of Parsvnath Developers, 'We will approach the RBI to demand a restructuring of existing debt... Also, the recently reduced interest rates for home loan borrowers up to twenty lakh rupees should be increased to thirty lakh rupees for customers in metros only.'
Recent Stimulus Package
The new stimulus package has introduced measures to support the real estate sector, including:
- Overseas Borrowing for Integrated Townships: Developers of integrated townships are now permitted to borrow funds from overseas.
- Release of Land for Low and Middle-Income Housing Schemes: The package urges states to release land for low and middle-income housing schemes.
Industry Response
Despite these measures, the industry emphasizes the need for improved liquidity. The meeting with the RBI Governor is a step towards addressing these concerns and seeking relief for the struggling real estate sector.