In a much-needed move to relieve the real estate sector battling liquidity issues in COVID-19 times, the Reserve Bank of India (RBI) Governor Shaktikanta Das on August 6 announced an additional special liquidity facility of Rs 5,000 crore for National Housing Bank.
Rs 5,000 crore will be provided to NHB and the facility will be for a period of one year to be charged at the repo rate. In the conference, RBI MPC unanimously voted to retain the policy repo rate at 4 percent to keep inflation target in mind. A loan resolution plan, which allows for payment moratorium up to two years for corporate and personal borrowers, should also provide a breather to stressed real estate developers and individual borrowers in the housing segment alike.
Liquidity of Rs 5,000 crore announced to be infused into NHB is being welcomed by the real estate segment’s leaders and stakeholders alike as the enhanced finance flow is expected to help developers in need of last mile funding so as to be able to complete their stalled projects.
Niranjan Hiranandani, President- Naredco, Assocham, told Realty Buzz IN:
“A Positive step by Reserve Bank of India to pay heed to India Inc’s long pending demand of One time restructuring of loans without classifying them as NPAs, by setting up an expert committee steered by KV Kamath.
Opening up the window for restructuring of loans to companies, individuals and MSME under mandated safeguards grants breather to the liquidity strapped industry. A flexible repayment scheme under the new resolution framework shall bring in the much-needed relief to resume operations smoothly.
It is noteworthy here that the fact accorded by the RBI governor of maximum transmission of rate cut benefits percolating down the banking stream, which shall be reflected in easing the credit supply to meet working capital needs of the Industry across the board.
Additionally, liquidity of Rs 10,000crores announced to be infused in NABARD and NHB will definitely aid the reeling sector to tide over the liquidity crisis. This indicates that the fiscal measures by RBI have started showing the positive outcomes on the economy.”
Mr. Anshuman Magazine, Chairman & CEO – India, South East Asia, Middle East & Africa, CBRE told Realty Buzz IN:
“The RBI’s decision to provide additional liquidity to National Housing, even though it kept the repo rate unchanged at 4 percent, is a positive step towards infusing liquidity and help NBFCs and housing sector tide over the liquidity crisis.
The additional funding will ease the cash flow burden, improving the overall sentiments and market performance. In addition to this, RBI also allowed a one-time restructuring of loans without classifying them as NPAs, enabling lenders to implement a resolution plan, without a change in ownership.
We welcome these announcements as they are directed towards preserving financial stability and strengthening consumption, thereby giving a push to economic recovery.”
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