SBI and SPPL join hands to finance stuck slum rehabilitation projects in Mumbai

The State Bank of India (SBI) and Shivshahi Punervasan Prakalp Ltd (SPPL), a special purpose vehicle set up by the state government to push for slum rehabilitation, have joined hands to finance stuck building projects in the city. The SPPL will finance the rehabilitation component of the project and SBI will finance the sales part. SPPL will finance the project only if the realtor agrees to build a minimum of 35% of flats in his freesale component, which are classified as affordable homes, that is flats with an area of 30 sqmt to 60 sqmt. The builder will also have to agree to predetermined rates set by the SPPL to sell the affordable homes. SPPL will be providing loan to developer at around 8.5% or the rate at which the central government’s undertaking, Housing and Urban Development Corporation, gives loan to government agencies engaged in housing development. There were around 250 slum rehabilitation projects that are stuck at various stages of development due to financial inability of developers to complete the projects, affecting nearly 50,000 people, the official records said.