Realty Sector Lauds RBI’s Monetary Policy Announcement

Economic experts have welcomed the monetary policy of the Reserve Bank of India (RBI) announced. The Monetary Policy Committee (MPC) has chosen inflation as its priority and kept the key lending rates unchanged at four per cent and reverse repo rate unchanged at 3.35 per cent. Dr Niranjan Hiranandani President – Assocham and Naredco stated, “A Positive step by Reserve Bank of India to pay heed to India Inc’s long pending demand of Onetime restructuring of loans without classifying them as NPAs, by setting up an expert committee steered by KV Kamath. Opening up the window for restructuring of loans to companies, individuals and MSME under mandated safeguards grants breather to the liquidity strapped industry. A flexible repayment scheme under the new resolution framework shall bring in the much-needed relief to resume operations smoothly.” Satish Magar’s President, CREDAI National said, “CREDAI welcomes RBIs announcement of infusing additional liquidity of Rs 10,000 crore through NABARD and NHB as this will increase the access and availability of funds for the cash starved real estate sector. Extending timeline for restructuring the stressed MSME loans till 31st March 2021 is an encouraging step as MSME sector is a backbone of our economy and forms a large part of real estate development industry.  However these measures are not enough for revival of the economy and there is an  urgent need for restructuring of stressed loans in all sectors, specifically  the real estate  industry as  it is in dire straits.” Rajan Bandelkar, President, NAREDCO West expressed, ''The RBI has approved a long pending demand of the real estate sector to allow one-time restructuring of loans. This will boost the much-needed liquidity and streamline stressed assets in the real estate sector. But this restructuring comes with a stipulation and It will be implemented by March 31, 2021. It would have been an icing on the cake, had the RBI considered the net worth positive projects and allowed one-time restructuring for all the projects, which were held up.” Sanjay Dutt, MD & CEO, Tata Realty and Infrastructure Limited shared, “While we are grateful that the government is maintaining the accommodative stance by letting the repo rate remain unchanged at 4 per cent, we were expecting some more support during these troubled times. Although the recent RBI monetary policy continues to provide some short term relief to the real estate sector, the introduction of some special initiatives for developers and homebuyers would have been ideal.” Manju Yagnik, Vice Chairperson, Nahar Group and Vice President NAREDCO (Maharashtra) added, “Allowing restructuring of loans for stressed MSMEs will help small businesses which are huge employment generators. The industry was expecting a further extension for loan moratorium to help recovery as a large part of the country is opening up for business and need liquidity support. An extension in the Loan moratorium would have helped lower and middle-income groups to better manage their finances.” “While the sector was looking at a further revision in policy rate, to boost demand, we appreciate the accommodative stance by the RBI, in the wake of high rate of inflation which may have necessitated keeping policy rates unchanged.  The Governor revealed that real GDP of India will trend in the negative territory for majority of FY 20 – 21, which causes concern for the real estate sector as economic growth and stability is a key ingredient for its long-term growth,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India ''The RBI has retained the benchmark rates unchanged in light of the outlook on inflation. In order to transmit earlier reductions, banks and HFIs must be pushed to lower mortgage rates for home buyers. This will provide an impetus to the housing industry'' shared Rohit Gera, Managing Director, Gera Developments Pvt Ltd. “Allowing One Restructuring of Corporate Loans is a significant policy decision and would help Banking and Corporate sector to navigate through impact of Covid19 on Business Cash Flows. In continuation of liquidity windows to Real Estate Sector provided earlier in past four months, further Window of INR10,000 cr. to NHB would infuse further liquidity to Housing Finance and Non-Banking Companies. Interest rates have remained unchanged however, home loan rates have been on a downward trend and given respite to the Home Buyers in past few months”, expressed Piyush Gupta, Managing Director, Capital Markets & Investment Services, Colliers International India. “With RBI maintaining status quo on policy rate front, it is also important to focus on improving the transmission of the past rate cuts as the repo rate is still at a historical low. An amount of Rs 10,000 crore of additional liquidity provided to NABARD and National Housing Bank is a welcome move as it will help the NBFCs and housing sector to tide over the liquidity crisis. Going forward, the real estate sector requires additional support at this stage as it can act as a catalyst in resurrecting the economy, backed by stringent fiscal and non-fiscal measures,” added  Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani