Realty players, who are struggling to stay afloat during the economic downturn and Coronavirus pandemic, have said that 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," said Niranjan Hiranadani, President of NAREDCO.
He additionally acknowledged 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 10,000 crore 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, he concluded," he noted.
ANAROCK Chairman Anuj Puri said much along the expected lines, the RBI kept repo rate untouched at 4% and reverse repo rate at 3.35% amid a recent rise in retail consumer prices. The RBI was expected to do all it can to keep the inflation rates reined in for the duration.
"However, the RBI announced several additional measures that will go on to accelerate the economy, enhance liquidity, improve flow of credit and deepen digital payment facilities, among others. Commendably, its allotment of INR 5,000 crore each to National Housing Bank and NABARD is a much-needed step for sectors including real estate reeling under the liquidity crisis. It will help infuse capital into the HFCs and eventually provide relief to developers battling liquidity issues in COVID-19 times," he viewed.
Further, Manju Yagnik, Vice Chairperson, Nahar Group observed that additional liquidity support of Rs 10,000 cr, especially Rs 5,000 cr via National Housing Bank will make funding easy for housing finance companies and boost demand. Ample system liquidity and lower rates are necessary to boost demand and credit offtake. Allowing restructuring of loans for stressed MSMEs will help small businesses which are huge employment generators.
However, she said the industry was expecting a further extension for loan moratorium to help recovery as a large part of the country is opening up for business and need liquidity support. "An extension in the Loan moratorium would have helped lower and middle-income groups to better manage their finances. Growth recovery in rural areas has been robust as per RBI's estimates, would expect a similar recovery Pan-India," Yagnik added.
According to Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory, the RBI was expected to announce a status quo on rates after multiple and significant repo rate reductions over the past few months. The move to offer a further Rs.10,000 crores to NABARD & NHB will help bring liquidity to the sector. The 90% lending against gold will make it easier for the middle class to avail liquidity.
"It is important now for the RBI to further reduce the reverse repo to help banks lend further and let go of the cautious approach that has been adopted currently. Importantly, the move to form an expert committee to examine the one-time restructuring of loans will significantly help borrowers mitigate the impact of COVID-19 and the subsequent lockdowns," he said.