Mumbai: After two years, the Reserve Bank of India (RBI) on Wednesday, through a fresh notification, removed restrictions from the state and district co-operatives banks relating to issuing loans for carrying out self-redevelopment. In October 2020, the RBI had restricted these banks to finance such projects.
Abhishek Ghosalkar, the director of Mumbai District Central Cooperative (MDCC) Bank, said that the relief for funding self-redevelopment could be achieved due to constant follow-up by the Mumbai Bank, Maharashtra Societies Welfare Association (MahaSEWA), and him. “Now the district centre co-operative bank and state co-operative banks are allowed to grant finance to commercial real estate residential housing within the existing aggregate housing finance limit of five per cent of the total asset. The notification will largely benefit cooperative housing societies, which opt for self-redevelopment,” he said.
Ghosalkar said self-redevelopment is the best alternative for housing societies where the projects are stalled after default by number of developers. “It provides maximum security to members, less litigation and provides additional benefits in the form of additional area, additional corpus over and above what a developer offers,” he said.
In fact, the Mumbai Suburban District Federation has constituted a separate free advisory cell to guide housing societies looking for self-redevelopment till the OC is obtained.
The Free Press Journal has previously reported how the restriction on lending to such projects by state and district cooperative banks stalled over 1,000 projects in Mumbai. Now with the revised permission, they will get a major push.
The previous BJP-Shiv Sena government had issued a government resolution on September 13, 2019 to promote self- redevelopment of cooperative housing societies in a big way. It had appointed Maharashtra State Co-operative Bank as the nodal bank to work through the MDCC. Following this, in October 2019, the MSC Bank wrote to the RBI and the National Bank for Agriculture and Rural Development (NABARD) seeking permission to fund self-redevelopment projects of registered cooperative housing societies by keeping such loans outside the purview of the “commercial real estate”, which was disallowed.
