Eco booster continues: Package for realty soon

September 24, 2012

P-Chidambaram

New Delhi, September 24: The government is readying a package to boost real estate activity by easing lending and provisioning norms for banks as part of a strategy to prop up the sector that provides significant employment in the country after developers expressed their inability to cut prices to increase demand.

The steps follow an interaction that finance minister P Chidambaram had with public sector bank chiefs last month, where he also asked the Indian Banks' Association (IBA) to prepare a simplified education loan scheme, backed by a credit guarantee fund.

While a new education loan code is a work in progress, bankers said a funding boost for real estate was discussed by financial services secretary D K Mittal with bankers and industry representatives in Mumbai last week and the government will seek simplification in norms by the Reserve Bank of India (RBI).

On education loans, while IBA is still working out the norms, a bank chief said the FM's suggestion to provide loans to students getting admission under the management quota was virtually accepted. Similarly, banks will change the service area approach for these loans and students will be able to avail of the facility from any branch.

At the meeting, Chidambaram sought feedback from banks on various sectors and has already taken up the issue of clearing infrastructure projects that are held up in the absence of land, fuel or environment clearances. Besides, he has asked state-run banks to devise schemes to push consumer durables sales, which was seen as a message to cut rates on auto loans.

Chidambaram said there were nearly five lakh apartments lying vacant in Mumbai alone and asked IBA to look at ways to prop up demand, get builders to complete projects and sell unoccupied dwellings.

A banker said developers had argued that it was tough to cut prices given the high labour and land cost as well as inputs such as cement and steel. Besides, they said the profit margin was not very significant to justify a reduction in prices. As a result, the government is now looking at ways to help the sector that can have a rub-off effect on sectors such as cement and steel besides creating jobs.

At the meeting, lenders demanded a change in approach by real estate developers, asking them to move to a project-specific borrowing model, which will make it easier for lenders to track funding. "We do not lend to a corporate house which is in the cement or power sector. We lend to a project that is being developed, which also provides us comfort," said a public sector bank chief.

Another bank chief said that for these projects, an escrow amount will be opened, where buyers would deposit their money and lenders would be able to take charge of those funds. "But when it comes to builders, it is easier said than done," the chairman added.

A key area where lenders are seeking a change in norms is to get the regulator to simplify norms so that the loans extended for residential projects to the builders are not treated at par with those for commercial real estate. Currently, all exposure to developers requires higher charge on capital, which means banks have to set aside more funds if they lend to companies.

RBI has traditionally been wary of bank lending to real estate and even has a cap of 5% on loans to the sector. Although home loans are treated separately, the regulator has often discouraged banks from lending to individuals as well.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
June 3,2020

Jammu, Jun 3: A mob on Tuesday disrupted the last rites of a coronavirus victim in Jammu and Kashmir and forced his family members to flee with the half-burnt body, prompting intervention by the administration which later ensured the cremation at another place as per protocol.

A 72-year-old man, hailing from Doda district, became the fourth victim of the novel coronavirus to die in Jammu region. He breathed his last at the Government Medical College (GMC) hospital on Monday.

"We had set out for the funeral along with a revenue official and a medical team, and had lit the pyre at a cremation ground in Domana area when a large group of local residents appeared at the scene and disrupted the last rites," son of the deceased said.

Only close relatives of the deceased, including his wife and two sons, were present during the cremation. They had to flee with the half-burnt body in an ambulance to save their skin from the mob which pelted stones and attacked them with sticks.

"We had sought permission from the government to take the body to our home district for the last rites, but we were told that all necessary arrangements were in place, and that we would not face any trouble during the cremation," the victim's son said.

He also alleged that the security officials present at the scene were of no help.

Two policemen who were present there failed to act against the unruly crowd, while the accompanying revenue official went missing, he said.

"The ambulance driver and other staff from the hospital helped us a lot and managed to take us back to the GMC hospital with the body the government should have come out with a better plan to conduct the last rites of coronavirus victims, taking into consideration the past experience and problems encountered during the funeral of such victims," the victim's son said.

Later, the body was taken to a cremation ground at Bhagwati Nagar area of the city, where it was consigned to flames in the afternoon in presence of senior civil officials, including additional deputy commissioner and sub-divisional magistrate under tight security.

"My uncle was admitted in the hospital last week and died on Monday afternoon. He was suffering from various ailments, especially lungs and heart diseases. Before shifting him to GMC hospital Jammu, he underwent a coronavirus test in Doda which came negative," nephew of the deceased said.

However, he said, the victim's second test after his admission in the GMC hospital came positive on Sunday.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
June 24,2020

New Delhi, Jun 24: Over 1,500 urban and multi-state cooperative banks will be brought under the supervisory power of the Reserve Bank of India (RBI), said Union Minister Prakash Javadekar on Wednesday.

"Government banks, including 1,482 urban cooperative banks and 58 multi-state cooperative banks, are now being brought under supervisory powers of Reserve Bank of India (RBI); RBI's powers as they apply to scheduled banks will apply for cooperative banks as well," Javadekar said at a press conference, through video conferencing.

"The decision to bring 1,540 cooperative banks under RBI's supervision will give an assurance to more than 8.6 crore depositors in these banks that their money amounting to Rs 4.84 lakh crore will stay safe," he added.

The Minister of Information and Broadcasting further said that the Union Cabinet has approved a scheme "for interest subvention of 2 per cent to Shishu loan category borrowers under Pradhan Mantri Mudra Yojana, outstanding as on March 31, 2020, for one year to eligible borrowers."

The Minister also said that the Union Cabinet has approved the declaration of Kushinagar Airport in Uttar Pradesh as an international airport.

Comments

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.
News Network
April 23,2020

New Delhi, Apr 23: Union Information and Broadcasting Minister, Prakash Javadekar, on Thursday condemned the attack on Republic TV editor-in-chief Arnab Goswami saying that this is "against democracy".

"We condemn the attempt to attack renowned journalist Arnab Goswami. Essentially, we condemn every attack on any journalist. Because this is against democracy," the Union Minister said.

"It is really ironical that those who preach tolerance have become so intolerant. Therefore, we condemn this attempt. We appeal to the collective wisdom that this is undemocratic. As per present law, definitely, police takes action, if there is a complaint," said Javadekar.

Two persons were arrested on Thursday morning for allegedly attacking Republic TV editor-in-chief Arnab Goswami and his wife Samyabrata Ray in Mumbai.

Comments

fairman
 - 
Thursday, 23 Apr 2020

Javedkar is blind not to accept Arnab's venomous statement in deciding the nation. He is another shameless 

 

Add new comment

  • Coastaldigest.com reserves the right to delete or block any comments.
  • Coastaldigset.com is not responsible for its readers’ comments.
  • Comments that are abusive, incendiary or irrelevant are strictly prohibited.
  • Please use a genuine email ID and provide your name to avoid reject.