Real estate sector needs quick assistance to stay afloat: Developers

RBI’s restructuring circular, where a borrower can approach the lender and request a loan restructure will help in maintaining confidence in the market, according to real estate developers.

“The second wave of the Covid-19 outbreaks has affected the individual borrowers immensely. Many of the borrowers will not be able to begin paying their EMIs on schedule. Now they can approach the lender and request a loan restructure without affecting their credit rating based on the RBI‘s restructuring 2.0 circular,” said Uddhav Poddar, MD, Bhumika Group.

Akshay Taneja, MD, TDI Infratech said that RBI’s steps are unlikely to provide a significant lift to the market, but they are expected to provide downside support and enhance investor confidence.

“It would have been useful to implement broader relief efforts directed at mid-corporate and big borrowers and businesses highly affected by the pandemic, such as real estate and hospitality,” said Taneja.

Real estate developers are expecting a sector specific relief from the government.

“The RBI has taken a pragmatic approach to deal with the Covid situation. While the RBI did not issue a blanket moratorium, stressed borrowers were given the option of seeking settlement if necessary. As a result of this, only those who genuinely need their loans restructured will approach the banks. At the same time, it will aid in the system’s financial stress management,” said Pradeep Aggarwal, Founder & Chairman – Signature Global Group.

Sagar Saxena, Project Head, Spectrum Metro said that in comparison to last year’s moratorium, the new measures are mild.

“The sector needs quick assistance to stay afloat. Lending institutions must be ordered to allow six-month interest-free moratorium periods on term loans and to defer payment of loan instalments until the situation from Covid-19 returns to normal,” said Saxena.

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