realestate2022

Will The Government’s Relief Package Boost India’s Troubled Realty? When finance minister Nirmala Sitharaman announced a Rs 20,000-crore relief package last week, to rescue pending housing projects, she gave hope to lakhs of property buyers in the country that they will get delivery of their homes. The much-anticipated and widely-talked-about ‘stress fund’, however, might only be a partial relief at best. At a time when nearly 8.5 lakh housing units have been stuck at various stages of construction across India’s prime property markets, a grant of at least Rs 200,000 crores was expected by the realty segment. The country’s stressed banking sector, which received a large relief package of Rs 70,000 crores from the government recently, has an exposure of over Rs 40,000 crore to housing projects where last-mile liquidity support could ensure delivery in a year. So, it’s only natural that builders are terming the Rs 20,000-crore relief ‘too little.’ What is the problem with the amount sanc...

RBI directs banks to link retail loans with external benchmarks The RBI has made it mandatory for banks to link all new floating-rate loans for housing, auto and MSMEs to external benchmark like repo rate from October 1, a move aimed at ensuring faster transmission of policy rate cuts to borrowers. Industry and retail borrowers have been complaining that banks do not pass on the entire RBI’s policy rate (repo rate) reduction to them. In a circular issued on Wednesday, the Reserve Bank of India (RBI) said it has been observed that due to various reasons, the transmission of policy rate changes to the lending rate of banks under the current marginal cost of funds based lending rate (MCLR) framework has not been satisfactory. Therefore, it has now decided to make it “mandatory for banks to link all new floating rate personal or retail loans and floating rate loans to MSMEs (micro, small and medium enterprises) to an external benchmark effective October 1, 2019”, the circular said. In 2019...