Finance Ministry, bankers agree to resolve funding woes of realtors

MDT/PTI 18 September 2012

CREDAI president Jain said Financial Services Secretary DK Mittal has asked banks to fund under-construction projects on priority basis as well as projects in tier II and III cities

Mumbai: Cash-strapped realty players have sounded upbeat after the Finance Ministry and bankers agreed to look into their grievances, primarily related to funding, reports PTI.

Financial Services Secretary DK Mittal met bankers and the real estate developers body Confederation of Real Estate Developer's Associations of India (CREDAI) and discussed various issues affecting the sector.

"We have seen very serious commitment by the government in creating more housing stock. During the meeting, Mittal asked banks to focus on funding under-construction projects which have been delayed.... a positive sign for developers who are facing liquidity crunch," CREDAI national president Lalit Kumar Jain told reporters after the meeting.

Jain said the secretary asked banks to fund under-construction projects on priority basis as well as projects in tier II and III cities.

"Many projects were stalled due to lack of funds. This will help in creating more stock, especially in small towns," Jain said, adding issues like approvals and clearances were also discussed at the meeting.

"Bankers have also agreed that factors like delay in project approvals, limitation on availability of land for real estate and even the FSI restrictions should be addressed, as they become a major hurdle when it comes to funding. If this issue is addressed, it will help create adequate stock," Jain said.

Mittal also asked the real estate apex body CREDAI, to conduct a survey of unsold housing stock so that a decision could be taken on unlocking their value, Jain said.

"There has been a general perception that developers are holding on to inventories to push up property prices. But the reality is different. We will appoint a consultant and conduct a survey as directed by the secretary, to find out the actual status of housing stock," he said.

"At present there is no method available to get the information on the actual status of the stock. We will do it through a credible agency. We will soon finalise the agency to do the job," Jain said.

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