Bringing relief to allottees, Noida reduces interest rate on property duesUpdated: Jul 03, 2020 22:57 IST
Following a state government’s directive, the Noida authority on Friday said it will start levying a lower interest rate of 8.5% on dues on properties that include residential plots, industrial plots, institutional plots and others except for group housing land. Earlier the interest rate was 9.5 % and even higher for some properties which were allotted by the Noida authority.
The state government had issued an order on June 9 directing the Noida authority to lower the interest rate on dues against property allotments. The revised interest rate, which the authority expects will help in recovering dues, will be applicable on payments from July 1.
“We will start charging interest rates of 8.50 % beginning July 1 as per the current marginal cost of funds based lending rate (MCLR) of State Bank of India (SBI). This rate will applicable till December end, 2020 as the MCLR will remain same for this year and is up for revision next year,” said Ritu Maheshwari chief executive officer, Noida authority. The MCLR fixed by SBI is 7.3 % and the authority has imposed 1 % additional charge as administrative expenses on it and the interest rate has been fixed at the round figure of 8.5%, said the order issued by the authority.
“It is quite a big relief to allottees old and new, who have outstanding dues to pay. Earlier the interest rate was not as per the existing MCLR,” said Surendra Nahta, president of Micro Small Medium Enterprise Association (Noida).
“The step is taken to encourage the allottees to pay dues so that we can recover our revenue. We hope allottees will take benefit of this order,” said Maheshwari.
The authority, however, is yet to order a lower interest rate on payments against group housing land.
On June 10, the Supreme Court had ordered the Noida and Greater Noida authorities to charge only 8% interest on due payments against group housing land. The interest rates on group housing rates would often go up to 15-23% after the authorities levied more interest on late payments. Developers had moved the apex court demanding lower interest rates claiming that high rate of interest would render their realty projects non-profitable. Noida authority officials said they are still examining the court order and are yet to take a call on revising interest levied on payments against group housing land.
The authority allots land for residential, institutional (school, college or other educational projects or MNCs), industrial projects and among others on instalment basis. After accepting 30% of the land cost, it allots the land and also gives possession of the same to the successful allottee. The allottee can pay the remaining 70% in instalments within three years time at an interest of 8.5% (earlier 9.5%). If an allottee defaults on the instalments, then a 3% compound interest is added to base simple interest, said officials.