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“The reduction of the reverse repo rate to 3.75 per cent from the recent 4 per cent by the Reserve Bank of India (RBI) will make lending attractive for financial institutions, which will hugely benefit homebuyers and the real estate sector,” said JC Sharma, VC & MD, Sobha Limited.
Reacting to RBI’s announcement, Sharma further said, “We believe that ₹50,000 crore of infusion into the financial system will ease liquidity issues faced by the NBFCs and the MFIs which will result in more funding to the corporate sectors. More importantly, the loans given by the NBFCs to real estate sector will avail similar benefits as given by commercial banks. This was a required step towards both the NBFC and the real estate sector.”
Additionally, the RBI has provided for one year of project completion extension on asset classification for NBFC loans to the CRE segment, which is laudable keeping the lockdown and migrant labour workforce issues in mind. “The focused measures to keep credit flowing into critical areas of the economy will help revive the economy. The fact that the projected India’s GDP growth of 1.9 per cent by IMF is highest in G20, shows the country’s resilience in challenging times. We believe India will make a turnaround in times to come,” Sharma said.
Ashish R Puravankara, MD, Puravankara Limited, said: “But it is also essential that these measures should be implemented in a time bound manner to improve the overall operations (of the industry) and boost customer sentiments. Realty industry will have to revolutionise the way it operates to gain momentum, as it still remains the second largest employer and is an essential cog in India Inc.”
He further added, “Of course we hope, that all banks will incorporate these new rules, and we eagerly await the detailed guidelines on the same. The sector, together with the various industry bodies, has to devise a long-term systematic plan to ensure safe and prosperous work cultures. The spirit of the RBI with these sops is in the right direction to help a capital-intensive sector like construction, but the entire economic machinery needs to work in tandem to ensure the nation recuperates fast.”
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