Builders explore eligibility options to avail of stress fund after interest waiver by UP govt
At least 25 housing projects in Noida and Greater Noida, including those of Logix, Supertech, Valuent, AIMS Max Gardenia and Antriksh, among others, are already (without seeking any interest waiver) eligible to get the last mile funding.Updated: Dec 16, 2019 17:51 IST
The Uttar Pradesh government’s move to offer interest and penalty waiver to builders may enable many developers to come out of defaulters’ list and seek stress fund offered by the finance ministry, UP government officials said.
The State Bank of India Capital managing director and chief executive officer Sanjiv Chadha, along with other top officials of the finance department and economic affairs, explained to builders how they can seek stress fund and deliver flats without further delay.
Top officials of the Noida authority, Greater Noida authority and the Yamuna Expressway Industrial Development Authority also put forth financial issues they have with housing projects.
“Many housing projects, which are in financial distress, can become eligible to get the stress fund once they get interest and penalty waiver under the UP government’s scheme. In the next 2 months, many builders can seek funds after their project comes out of defaulter builder category,” Alok Tandon, UP industrial development commissioner and chairman of Noida, Greater Noida and YEIDA, said after attending the meeting.
At least 25 housing projects, including those of Logix, Supertech, Valuent, AIMS Max Gardenia and Antriksh, among others, are already (without seeking any interest waiver) eligible to get the last mile funding.
As per the announcement of the ministry of finance, the stress fund is to be given to housing projects that fulfil certain conditions — project should be registered under RERA, must have been stuck due to fund crisis, has to be affordable or middle income category project, builder net worth should be positive, project must be in final phase of completion, housing unit’s carpet area should not be more than 200 square metres, and apartment cost should not exceed Rs 1.5 crore. The maximum funding a project can get is Rs 400 crore.
The Noida, Greater Noida and YEIDA CEOs said a part of the funds released to builders should be given to them as most builders are yet to clear their land dues.
“We gave a suggestion that SBI Capital should keep in mind our dues while sanctioning stress fund so that we can collect land dues. If the dues are not settled, we cannot issue an occupancy certificate to a housing project,” Ritu Maheshwari, Noida authority CEO, said.
SBI Capital and the officials of the finance department are yet to lay down the guidelines under which the applications of builders will be assessed before granting them stress fund. SBI Capital sought suggestions from the builders and authority officials on this.
Confederation of Real Estate Developers Association of India, a builder lobbying group, also took part in the meeting. “SBI Capital has put a condition that once the project is finished and delivered, the company will be the first one to collect its dues. Only then the builder can pay money to the Noida authority or other banks. We have suggested that the stress fund should be used first for construction and delivery of flats. Once the developer clears SBI Capital’s loan, only then will payments be made to the others,” Prashant Tiwari, president, Western UP wing of CREDAI, said.