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Last updated: 24 Aug, 2019  

Nirmala Sitharaman THMB Solution for stalled home projects next week: FM

Nirmala Sitharaman
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SME Times News Bureau | 24 Aug, 2019

In a relief to home buyers, Finance Minister Nirmala Sitharaman Friday said that the government is working on a solution to get the stalled housing projects completed.

Announcing steps to boost the economy in a press meet, the minister said that the measures for the distressed home buyers would be announced next week along with other steps.

The announcement comes days after the minister and Finance Ministry officials met stakeholders of the country's real estate market, including developers, realty associations and home buyers.

In the meeting on August 11, liquidity problems and completion of stalled projects were discussed whereby the developers suggested the creation a stress fund for completion of stalled projects.

The home buyers' association, Forum For People's Collective Efforts (FPCE), in its letter to Sitharaman had said that the stalled projects can be solved with a stress fund of at least Rs 10,000 crore.

At the same time, the minister added that National Housing Bank (NHB) would provide additional Rs 20,000 crore to HFCs, taking up the total liquidity support to Rs 30,000 crore.

She also said that partial credit guarantee scheme announced in the budget for purchase pooled assets of non-banking financial companies (NBFCs) and HFCs upto Rs 1 lakh crore will be monitored at the highest level in each bank.

Further, in a move which would ease home loan interests, she said that banks would come with repo rate linked loan products.

Commenting on the development, Shishir Baijal, Chairman and Managing Director, Knight Frank India said: "The release of funds for the PSUs and the credit support HFCs as well as the NBFCs will provide some relief to the financial sector currently under pressure on account of NPAs. We expect these measures to have impact on the stressed assets that are awaiting completion."

For the real estate sector specifically, the alignment of the bank lending rates to the repo rate will have significant impact, he added.


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