Commercial banks told to fund realty projects

In what could be good news for the city’s real estate sector, commercial banks have been asked to focus on funding partially completed realty projects on a priority basis and developing projects in small towns.

In what could be good news for the city’s real estate sector, commercial banks have been asked to focus on funding partially completed realty projects on a priority basis and developing projects in small towns.

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DK Mittal, the secretary for financial services, made the announcement at a meeting with the Confederation of Real Estate Developers' Associations of India (CREDAI), the apex body of developers, and various banks and financial institutions on Monday.

In consultation with the National Housing Bank (NHB), a regulator for housing finance companies, CREDAI has been asked to come up with norms for development and standards for funding the projects.

Mittal also asked the real estate industry to conduct a survey of unsold housing stock in various Indian cities.

The survey is to be conducted by an external agency in 7-10 cities including Mumbai. The first report is expected to come out in 10 days, said Lalit Kumar Jain, national president, CREDAI.

RV Verma, chairman and managing director, NHB, said, “The survey will help find genuine projects that are on hold because of liquidity issues and financial crunch. These measures will ultimately result in lower property prices. High prices are a major reason for a slowdown in the real estate sector right now.”