Real estate developers hail RBI for extending loan restructuring by one year

Real Estate News: The Reserve Bank of India (RBI) has kept the repo rates unchanged at 5.15 per cent while maintaining an accommodative stance in its recent Monetary Policy Committee (MPC) meeting. Though the real estate sector was expecting further rate cut as a sentiment-boosting factor, as the previous rate cuts did by prompting some banks to lower their interest rates, realtors are quite happy with RBI's decision to extend project loan restructuring by one year without downgrading the asset classification aligns with the real estate aspirations.

Speaking on the debt restructuring boost for the real estate developers Anuj Puri, Chairman – ANAROCK Property Consultants said, "This is a big move and will bring the much-needed relief to the cash-starved real estate sector - and to both developers and the HFCs from the liquidity perspective. It will help ease out the time for maintaining and managing cash flows for cash-strapped developers and help them to complete several stuck projects. That said, it will not address the other main issue prevailing in the real estate sector – that of continuing low demand."

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Highlighting the benefit of loan restructuring extension Rakesh Yadav, CMD, Antriksh India Group said, "Sometimes, a developer is not responsible for project delay and there are many reasons like local agitation, law and order, policy limbo, etc. that leads to delay in project delivery. In the previous system, a developer was not given a chance to put his or her version." He said that in current RBI guidelines, one can get one's project loan restructuring benefit if the project has got delayed by a valid reason.