RERA authorities to approach RBI to prevent bad loans and make the developers eligible for fresh borrowings
With the slump the Indian realty sector has been going through, real estate regulators are planning to ask the RBI for one-time restructuring of developers’ outstanding loans to realign the industry for the better while tackling the liquidity issues. Industry bodies like CREDAI and Naredco have been seeking one-time restructuring of developers outstanding loans with financial institutions to prevent bad loans and make them eligible for new borrowings. The timelines for completion of pending projects have been extended by six months and in this regard, Uttar Pradesh RERA Chairman Rajive Kumar said that the decision has been taken for the benefits of homebuyers and to ensure possession of flats by the customers.
Keeping customers’ interest into consideration, the developers have been asked not to impose penalty on homebuyers for any default in payments of their instalments amid the ongoing pandemic.
Among the most pressing concerns today in the real estate sector is the liquidity issue with many stalled projects not being eligible for getting last mile funding through the Rs 25,000 crore special window created by the government. This is why the All India Forum of Real Estate Regulatory Authorities (AIFORERA) has taken the onus of addressing the issue of one-time debt restructuring with the RBI.
The implementation of RERA has come as a major boon for the real estate industry, which has not only boosted the entire realty ecosystem but also helped in bridging the gaps between the developers and home buyers. “Consumers see RERA as an effective recourse if something goes wrong,” said PropTiger and Housing.com CEO Dhruv Agarwala. With most consumers opting for ready-to-move-in flats rather than under-construction projects, their distrust towards the builders has been obvious. Supertech Chairman R K Arora said that it was the RERA law that has helped in trust building which was the need of the hour.
However, despite its existence and the transparency and stability it has brought across the sector, RERA experts are saying that complaints of home buyers may continue to surge given the ongoing pandemic.