Register for features like favorites, compare, comprehensive advice, consultation and more.Register
The Indian real estate sector and the NBFCs have been under stress for quite some recently. The sector has seen some reforms and improvements over the last few months. However, there is still a long way to go. The Indian government is currently weighing the option of unburdening some of the major NBFCs of stress assets via a dedicated scheme. The RBI is also considering proposals from the finance ministry and PMO to let the banks take the decisions of not classifying them as defaults which will help the NBFCs and real estate companies.
The government is considering more relief measures for the stressed sectors which have been facing a slump over the last few years. Over the past few months, the Indian government has announced a number of measures to ease liquidity and the credit crunch in the economy, which has brought some relief to the sector. However, a major overhaul is still needed to help the sector bounce back.
The government is currently weighing the option of unburdening some of the major NBFCs of stress assets via a dedicated scheme. The government is reportedly planning to create a stressed asset fund which will buy out the stressed financial assets.
Further, the Reserve Bank of India is likely to consider proposals from the Finance Ministry and the Prime Minister's Office which will let the banks take the decisions of not classifying them as default or special mention accounts (SMA). Banks may be allowed a one-time rollover realty loans recast for temporarily removing the NPA or even SMA accounts tag which will be considered on a case to case basis for projects that are at an advanced stage but have been stalled due to lack of funding. The government will reportedly consider sound projects and not the whole sector. The banks will decide on the basis of their commercial judgement about individual projects after being empowered by the RBI.
A call has been made for a recast of real estate developers’ loans which will not classify their loans as SMA or NPA. This will help them to approach funding agencies or market without having any doubt on their profiles. The Prime minister’s office, the Finance Ministry and the RBI have taken several steps for resurrecting the real estate sector, which is considered as a key to reflect growth and demand for the economy.
The Indian government has recently announced setting up of a Rs 25,000 crore alternative investment fund which will help in reviving the realty sector. A survey recently revealed that around 4.58 lakh housing units were stuck in India in 1600 projects which affect lakhs of buyers. The Cabinet has also approved an establishment of 'Special Window' which will provide priority debt financing for completion of stalled housing projects for the affordable and middle-income housing sector.
Stay updated with everything real estate!
Subscribe to our news letter