The Mumbai District Central Co-operative Bank has sought the state housing ministry's help to push the delayed self-redevelopment projects in the city.
The bank officials held a meeting in this regard with state housing minister Jitendra Awhad recently.
Bank director, Abhishek Ghosalkar said that the then BJP-Shiv Sena government had issued a government resolution (GR) in 2019 to push self redevelopment projects in the city in the wake of a number of redevelopment projects undertaken by developers were incomplete, abandoned or stuck for various reasons.
As a relief and to encourage tenants to go ahead with the redevelopment of their old-dilapidated buildings, concession on taxes on self redevelopment was given besides making the district bank as a nodal agency to provide funds.
However, with the new norms that came into force in 2020,the Reserve Bank of India (RBI) put some restrictions asking the district bank not to disburse loans to housing societies for self redevelopment projects.
This has hit several redevelopment schemes adversely. Ghosalkar said, “Over 1,000 applications are with the bank seeking funds for self redevelopment. Of which, 200 have already obtained pre-approved loan permission. However, the loan amount cannot be disbursed following the RBI's restrictions.”
He added that currently only private finance agencies are allowed to provide loans. But,the interest rates of these companies are too high therefore no housing society is seeking loans from them.
Whereas the district bank provided loans at 10 per cent rate of interest. Besides, no other private bank gives loans to societies except developers carrying out redevelopment, he informed. “We have urged the state housing ministry to talk to the RBI to get the restrictions lifted,” he said.
Ghosalkar said that since there is no agriculture production in this district, the Munbai bank is catering to the financial needs of non agricultural co-operative societies like urban co-operative banks, urban co-operative credit societies, employees co-operative credit societies, housing co-operative societies, co-operative consumers stores, industrial, fisheries and labour co-operative societies.
“Nearly 19,000 cooperative housing societies have their society accounts with us. Therefore,if Mumbai bank is allowed to lend money to societies for self redevelopment it is easier since we have all mechanisms in place like scrutinising the applicationsof loan among others,” Ghosalkar added.