Real Estate

RBI relief measures to benefit key real estate service providers

Anil Urs Bengaluru | Updated on May 05, 2021

Will help SME stakeholders such as labour/service contractors and suppliers of construction materials

The Reserve Bank of India’s additional Covid relief measures announced on Wednesday are expected to help real estate linked small and medium (SME) stakeholders like labour/service contractors and suppliers of construction materials.

Samantak Das, Chief Economist and Head of Research & REIS, JLL India said “In addition to healthcare sector, RBI has also recognised the hardships faced by individuals, small businesses, medium and small enterprises due to the lockdown and provided Resolution 2.0 measures for restructuring loans to small borrowers up to ₹25 crore.”

“Other than individual borrowers, this will provide major relief to real estate linked SME players especially suppliers of input material for the sector. The working capital review will also help these stakeholders to tide over their liquidity issues as their cash flows have been partly impacted due to the recent lockdown restrictions in various States,” he added.

Piyush Gupta, Capital Markets & Investment Services (India) at Colliers said “An initiative like Special Long-Term Repo Operations for Small Finance Banks for on-lending to individual borrowers shall help the smaller entrepreneurs, and Resolution Framework 2.0 for Covid Related Stressed Assets of Individuals, small businesses, and MSMEs for borrowers below ₹25 crore. The most vulnerable shall benefit from restructuring the loans impacted by Covid-19.”

‘Proactive move’

Rajani Sinha, Chief Economist & National Director – Research, Knight Frank India said “the proactive measures by the RBI are welcome and reassuring. Expansion of the liquidity window particularly to the healthcare sector is a need of the hour. Besides, additional liquidity window and resolution mechanism for loan restructuring for small and medium business will enable them to cope up with the adverse demand conditions created by this more severe wave of pandemic..”

Published on May 05, 2021

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