Real Estate

Realty developers welcome rate cuts, but concerns over liquidity remain

Amrita Nair-Ghaswalla Mumbai | Updated on May 23, 2020 Published on May 23, 2020

The real estate sector has welcomed the Reserve Bank of India’s announcement, though most developers say they continue to be concerned about liquidity issues.

Dhruv Agarwala, Group CEO of realty websites, and, said the RBI’s move will not only help developers but also homebuyers who have been under extreme pressure due to the prolonged lockdown. “What needs to be seen is how quickly the banks reflect this change in their respective rates,” he added.

Amit Modi, President-Elect Credai Western UP and Director ABA Corp, said banks need to ensure there is quick transmission of the announced rate cuts to the end consumer. “The RBI and the government should proactively make sure that the benefits reach the end consumer,” he said.

Supply-side bottlenecks

Ankit Kansal, CEO, 360 Realtors, said the RBI measures will help in managing supply-side bottlenecks by providing better and easier credit to developers and boost demand in the form of cheaper home loans.

Anuj Puri, Chairman, Anarock Property Consultants, said the rate cut will not only send out positive signals, but also enable banks to lend more.

Raj Sharma, spokesperson for Chandigarh-headquartered GBP Group, said the recent reduction in repo rates and reverse repo rates will improve liquidity. “The real estate sector has always been struggling with liquidity. This comes as a breather for borrowers and developers. We have been waiting for a timely transmission of these benefits to borrowers. The extension in EMI moratorium for three months also provides sufficient time to end-users and businesses to plan their altered financial structure.”

Penalty exemptions

Realty majors opined the regulator’s support to NBFCs to improve their liquidity would mean better access to capital for developers, but many were also looking ahead to penalty exemptions for the delay in project completion.

Prateek Mittal, Executive Director at Sushma Group, said the extended term loan moratorium period will provide relief towards liquidity for developers, who could now focus on the faster execution of projects.

Published on May 23, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.