The RBI has barred banks from giving upfront loans for under-construction projects through schemes like 80:20. Providing such loans help a bank as they are classified as mortgage and not construction finance, which is considered a risky business by the RBI and requires higher provisioning. The builder too gains, as home loans are far cheaper than construction loans.
Some feel the RBI’s decision will bring down prices. “It is a good decision as the government has sought to warn buyers who are tempted by the attractive 80:20 scheme, thinking they are getting a good discount. In reality, this scheme is quite complicated and does not clarify how much discount the developer is giving the buyer. The RBI’s decision will force developers and banks to be more transparent in explaining the benefits of the scheme to buyers. It will force developers to give a prospective buyer a discount upfront instead of spreading it across 2 to 3 years as in the 80:20 scheme,” said
Builders are greatly upset by the move. “It’s ironic that the government believes the middleclass, which avails of loans to buy its dream home, to be a risk, but not the five major industrial houses who, between them, have an exposure of Rs 5 lakh crore of public money. The RBI obviously thinks it is extremely important for it to stifle the economic growth of a company by taking such decisions
Sanjay Chhabria, MD, Wadhwa Group, said, “The RBI’s decision is in no way helping the real estate industry. On the one hand, the bank says it wants to fund the end user, and make the property affordable to them. On the other, it is taking every step that increases the cost of property by not granting approvals quickly and charging high interest.”
Some feel the RBI’s decision will bring down prices. “It is a good decision as the government has sought to warn buyers who are tempted by the attractive 80:20 scheme, thinking they are getting a good discount. In reality, this scheme is quite complicated and does not clarify how much discount the developer is giving the buyer. The RBI’s decision will force developers and banks to be more transparent in explaining the benefits of the scheme to buyers. It will force developers to give a prospective buyer a discount upfront instead of spreading it across 2 to 3 years as in the 80:20 scheme,” said
Builders are greatly upset by the move. “It’s ironic that the government believes the middleclass, which avails of loans to buy its dream home, to be a risk, but not the five major industrial houses who, between them, have an exposure of Rs 5 lakh crore of public money. The RBI obviously thinks it is extremely important for it to stifle the economic growth of a company by taking such decisions
Sanjay Chhabria, MD, Wadhwa Group, said, “The RBI’s decision is in no way helping the real estate industry. On the one hand, the bank says it wants to fund the end user, and make the property affordable to them. On the other, it is taking every step that increases the cost of property by not granting approvals quickly and charging high interest.”
0 comments:
Post a Comment