Mumbai: BMC breather for realty players, extends time limit for instalment in payment of various charges

Mumbai: BrihanMumbai Municipal Corporation (BMC), during the present coronavirus pandemic, has continued the facility of instalments in payments for grant of Intimation of Disapproval (IOD) and Commencement Certificate (CC) for various fees, charges, deposits and premiums in respect of building permissions.

This is the response to a representation by the realty players not to charge any interest or penalty for delay in payments as directed by the Government of India and the state government because of Covid-19 crisis and the nationwide lockdown.

BMC Commissioner Iqbal Chahal has issued a circular on July 31 wherein the validity of all permissions is extended automatically up to December 31, 2020 subject to recovery of revalidation charges without any penalty.

Leading engineer Yomesh Rao told Free Press Journal, hence the due dates of installment in payments with requisite interest falling between March 25, 2020 to December 24, 2020 as per the circular shall be shifted to December 26, 2020. ‘’Interest will be levied only till March 22, 2020. No interest will be levied from March 25 till December 24, 2020. Payments shall have to be made on or before January 10, 2021 failing which regular interest will be levied as per prevailing policy. Also for new proposals put up now after the first instalment, no Interest will be levied till December 24, 2020,’’ he said.

BMC sources said the facility of instalment payments was first introduced on September 6, 2017 by the then Municipal Commissioner Ajoy Mehta. It was a policy circular to allow instalments in payments with a nominal levy of 12% interest. This Policy was brought in at the time when banks did not grant loans to real estate developers even at 18% and NBFCs were granted loans from banks at 7-8% and they, in turn, were granting loan to developers at 18-24%. This policy gave BMC more Interest than they received from their deposits in banks.

Thereafter, the same policy was continued by Mehta’s successor Praveen Pardeshi. It was continued as BMC’s falling number of development premium revenue reduced due to the slack market. Considering the BMC’s deposits getting 7.5%, it reduced the instalment interest to 8.5% interest from September 2019 because of the market slowdown. This Policy was sanctioned for a period of 2 years only.

Meanwhile, the Union Ministry of Housing & Urban Affairs through its order issued on May 28, 2020 considering the Force Majeure asked the states to extend the validity of all kinds of approvals, CC, payment schedule of charges including development charges, NOC from various agencies by nine months due to lockdown. The state Urban Development Department issued notifications on June 4 and 8, 2020 extending the validity in Maharashtra to boost the economic revival without levy of any penalty or Interest during the period.

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal