- The central bank also announces measures to boost consumer loans for cars and homes.
- The government had also announced measures to boost the real estate sector
Reserve Bank of India today announced a number of measures to boost the real estate sector. It was decided to allow the extension of the business start date (DCCO) of project loans for commercial real estate, delayed for reasons beyond the control of the developers, by another year without reducing the classification of assets, in accordance with the treatment accorded to other project loans for the non-infrastructure sector.
Also, in order to boost consumer home loans and auto loans, RBI stated that from the end of the fortnight ended 31 January 2020, banks will be allowed to deduct the equivalent of incremental credit disbursed by them as retail loans from their net demand and time liabilities (NDTL) for the maintenance of the cash reserve ratio.”In addition to sustained In Reserve Bank is actively engaged in revitalizing the flow of bank credit to productive sectors with multiplier effects that stimulate growth, in an effort to improve monetary transmission.
As part of this, it has now been agreed that scheduled commercial banks will be allowed to deduct the number of incremental loans disbursed as retail loans.
Meanwhile, the Nifty Realty Index traded more than half a percent higher at 328 points, led by gains in Brigade, Sobha, Indiabulls Real Estate, Godrej Properties, and Oberoi Realty. In its policy, RBI said ‘ no downgrade of commercial real estate loans if there is a genuine delay. ‘
However, the industry is unhappy after the RBI has maintained its interest rate status quo by keeping it unchanged for the second time in a row. “In contrast to the expectations of the industry, this is the second time repo rates are unchanged. The belief is that the credit take-off will resume, which is why the policies are being pursued by this firm, but this has not happened.