The Union Minister of Housing has made a plea along with Finance Minister to the RBI for restructuring of loans for affordable housing in case the project is delayed due to extraneous reasons beyond the control of the developer.
This was stated by Union Minister for Housing and Poverty Alleviation Ajay Maken on the sidelines of the international conference on ‘Governance of Megacity Regions’ organised by CII and Centre for Policy Research.
“Currently, if the environment department doesn’t give clearance in time or plans do not get sanctioned in time, banks don’t allow restructuring of loans for affordable housing projects. So we along with the Finance Ministry have written to the RBI for allowing affordable housing loans to be restructured if the loan payback gets delayed due to reasons outside the control of the developer. All these things will take place once affordable housing gets infrastructure status and that is why we are pushing for it,” added Maken.
Earlier on Monday, Maken had made a pitch for granting of infrastructure status to affordable housing segment and also asked for a need to review the FSI (Floor Space Index) norms in Mumbai to encourage affordable housing projects in the city.
On the fate of the Real Estate Regulation Bill, the Housing Minister said that he would push for its passage in the upcoming Budget session of Parliament to address the need of bringing much needed transparency into the sector.
“Under the Bill the buyers would know exactly what they are getting as developers would have to put out details such as carpet area on the Web site of the regulatory authority besides the money developers get would have to be spent on the development of the particular projects only,” he said.
The Union Minister is pushing for grant of ‘Infrastructure sector’ status to the affordable housing segment which will enable banks to come forward to provide loans to urban poor and give a boost to the realty industry as well.
“The banks will be able to provide long-term loans and also with the change in industry status, the ratio of Non-Performing Asset (NPA) from this category will reduce,” added Maken.