The Reserve Bank of India (RBI) and the government have been considering ways to implement a one-time loan waiver for real estate companies on loan repayments. The move facilitates real estate companies to complete last-mile funding for the unfinished projects.
Massive non-performing assets (NPAs) have put these companies under pressure. Increasing NPAs have made the sector struggle to raise funds, and has indirectly affected the homebuyers as their projects remain stagnant without any progress.
As a result, the industry experts are requesting for a one-time loan waiver. The situation seems similar to that of the Lehman crisis in 2008. The waiver is speculated to prevent further NPAs and access funding.
In another case, the government has announced an Rs.25,000-crore exclusive window for stalled real estate projects on 6 November 2019. Further, Finance Minister Nirmala Sitharaman said that the government will allocate Rs.10,000 crore to the Alternative Investment Fund (AIF) and the remaining amount will be contributed jointly by State Bank of India and Life Insurance Corporation.
The exclusive window will reinstate 1,600 stalled housing projects that comprise 4.58 lakh housing units across the country.
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