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Real estate industry hails RBI move to boost liquidity in system

PTI   

Real estate industry hails RBI move to boost liquidity in system
New Delhi, Apr 17 () The real estate industry on Friday hailed RBI's decision to boost liquidity into the system and provide relief to loans taken from NBFCs for commercial projects, but sought one-time restructuring of their loans and a stimulus package to help the sector in battling the crisis caused by the lockdown to control COVID-19.

The RBI on Friday reduced the reverse repo rate - the rate at which banks park their fund with the central bank - by 25 basis points to encourage banks to lend to the productive sectors of the economy.

It also announced an additional Rs 50,000 crore through targeted long-term repo operation (TLTRO) and another re-financing window of Rs 50,000 crore for institutions like Nabard, National Housing Bank and Sidbi.

CREDAI Chairman Jaxay Shah said: " We welcome the RBI's decision of providing the liquidity boost to the realty sector. We are hopeful that the government will soon aid the sector with the announcement of the much needed economic package."

The RBI has allowed NBFCs to extend the date for commencement for commercial operations (DCCO) in respect of loans to commercial real estate projects by an additional one year if the projects got delayed for reasons beyond the control of promoters.

CREDAI President Satish Magar said, measures such as extension of DCCO, fresh LTRO and reverse repo rate cut will help uplift the economic slowdown.

"Loans given by NBFCs to real estate companies will get similar benefits as given by scheduled commercial banks, thus easing the financial burden on developers," he said.

Naredco President Niranjan Hiranandani said: "From the perspective of regulatory norms to spur an economic revival, the measures announced aim to maintain adequate liquidity in the system, facilitate bank credit flow and ease financial stress. These are absolutely welcome, given that economic activity has come to a standstill during the lockdown."

He said the announcement that loans given by NBFCs to real estate companies would get similar benefits as given by the scheduled commercial banks was positive.

Anshuman Magazine, Chairman & CEO - India, South East Asia, Middle East & Africa said NHB has been provided with a refinance facility of Rs 10,000 crore for HFCs as additional liquidity for individual housing loans, which is a much needed boost at this time.

Anarock Chairman Anuj Puri said: "Among the various measures announced, commendably its allotment of Rs 10,000 crore to NHB is a big move for the real estate sector reeling under the liquidity crisis. It will help provide capital to HFCs and eventually provide major relief to developers battling liquidity issues in COVID-19 times."

Tata Realty and Infrastructure MD & CEO Sanjay Dutt said the RBI's measures will provide some relief to the sector, which had already been dealing with its own set of issues prior to the pandemic.

"These measures...are bound to encourage banks to lend more, thereby improving the credit flow and giving more purchasing power to homebuyers and investors," Dutt said.

JLL India CEO and Country Head Ramesh Nair said, "Today's announcement will give an initial fillip to the real estate sector. The central bank's focus to provide credit flow to NBFCs is a key step. This will provide a boost to various real estate activities."

As per the RBI data, NBFCs outstanding credit to the commercial real estate stood at Rs 1,29,359 crore as of September-end 2019, he said.

"The relaxation of NPA classification norms and extension of one year for commencement of projects to real estate developers by NBFCs will provide the much needed relief to the sector," Nair said.

Dhruv Agarwala, Group CEO, Housing.com, and PropTiger, said the RBI move will help ease some financial stress in the system. This move will hopefully nudge banks to increase lending to various sectors of the economy, which is the need of the hour.

"We are extremely delighted and find a great sense of reassurance with the central bank taking cognizance of specific problems faced by the real estate sector and proactively taking targeted measures to address those issues," Knight Frank India CMD Shishir Baijal said.

Savills India CEO Anurag Mathur said:" The central bank's decision to pump in Rs 10,000 crore to NHB for refinancing companies is expected to address some of the liquidity concerns in the residential segment."

Ashish Jain, Partner at Cyril Amarchand Mangaldas, said lack of liquidity has been one of the most critical issues facing the real estate sector, even before the pandemic. Any measure to boost liquidity is, therefore, a welcome move.

Reliance Home Finance CEO Ravindra Sudhalkar said, "RBI has provided a welcome relief to NBFcs and HFCs in the form of liquidity boosters, which will benefit both housing and commercial real estate."

"With relaxation offered to NBFCs to extend the realty loans by a year, the real estate sector will have greater support in these difficult times," said Ankush Kaul, President (Sales & Marketing) - Ambience Group.

Pradeep Aggarwal, Founder & Chairman, Signature Global said the infusion of liquidity in the market is of utmost importance and the latest announcement will definitely help the economy.

Gaurs group MD Manoj Gaur said the banks and the NBFCs should pass on the benefits announced by the RBI.

Supertech Chairman R K Arora said "one time restructuring of loans was not allowed which is a primary requirement of the real estate sector."

Sushma group ED Prateek Mittal said the RBI's move will boost liquidity but sought a stimulus package to revive the property market and the economy. MJH SHW ANUANU


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