RBI announcement a major relief for real estate

Repo rates remained unchanged by RBI
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RBI announcement of Rs 10,000 crore to National Housing Bank is expected to help the real estate industry.

By Varun Singh

In a major move to boost liquidity in the market, the RBI today announced several additional measures to accelerate the economy and facilitate bank credit flows in Lockdown 2.0.

Among the various measures announced, commendably its allotment of Rs 10,000 crore to National Housing Bank is a big move for the real estate sector reeling under the liquidity crisis.

This move of the RBI is expected to help provide capital to HFCs and eventually provide major relief to developers battling liquidity issues in COVID-19 times.

Anuj Puri, Chairman, Anarock Property Consultants said, “Further, RBI has reduced the reverse repo rates by 25 bps – it now stands at 3.75%. This is another big step as the rate cut will definitely send out positive signals in the current times, and will enable banks to lend even more.”

Kaushal Agarwal, Chairman Director, The Guardians Real Estate Advisory  “The RBI’s decision to reduce the reverse repo rate further by 25 bps and reduction in LCR, will help bring liquidity in the market place with banks lending further. “

He further added, “The extension of realty loans by a year and NPA Classification relief for SMA accounts will go a long way in helping developers and MSME’s tide over the ongoing crisis.”  

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Also, in another major relief to developers, the RBI has further extended the date of commencement of commercial operations (DCCO) of project loans for commercial real estate projects which are delayed for reasons beyond the control of promoters.

“This is indeed a big move and will bring much-needed relief to cash-starved developers. It will help in easing out time for maintaining and managing cash flows for these developers,” said Puri.

Deo Shankar Tripathi, MD & CEO of Aadhar Housing Finance.

“The RBI announcement today is constructive, commendable and is in favour to support the financial system and at the same time the Indian real estate sector.

Prevailing confusion on asset classification of loans has been put to an end with the announcement. Now standard classification status of loans as of 1st March will exclude the 90 days moratorium period from 1st March to 31st May, which means status of loans shall remain at a standstill till 31st May. This comes as a big relief to borrowers and lenders.”

Also Read: RBI finally takes steps to counter coronavirus lockdown

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